Form 6k 4.13 Loan Agreement


    


    CONFORMED
      COPY

    


    


    DATED
      2nd
      October 2006

    


    TEEKAY
      OFFSHORE OPERATING L.P.

    (as
      Borrower)

    


    -
      and -

    


    DNB
      NOR BANK ASA

    NORDEA
      BANK NORGE ASA

    FORTIS
      CAPITAL CORP.

     

    and
      others

    (as
      Lenders)

    


    -
      and -

    


    DNB
      NOR BANK ASA

    (as
      Agent)

    


    -
      and -

    


    DEUTSCHE
      SCHIFFSBANK AKTIENGESELLSCHAFT

    (as
      Security Agent)

    


    -
      and -

    


    DNB
      NOR BANK ASA

    NORDEA
      BANK NORGE ASA

    FORTIS
      CAPITAL CORP.

    (as
      Mandated Lead Arrangers)

    



      -
        and -


    


    DNB
      NOR BANK ASA

    NORDEA
      BANK NORGE ASA

    (as
      Bookrunners)

    


     

    ___________________________________

    


    US$940,000,000
      SECURED

    LOAN
      AGREEMENT

    ___________________________________

    


     

    STEPHENSON
      HARWOOD

    One
      St. Paul's Churchyard

    London
      EC4M 8SH

    Tel:
      020 7329 4422 

    Fax:
      020 7329 7100

    Ref:
      819/1138

     

     

    
      
        
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        1

        
          

        

      

      
        
        

      

       

      
         

        
          	 	
                  CONTENTS

                   

                	
                  Page

                   

                
	
                  1

                   

                	
                  Definitions
                    and Interpretation...................................................................

                   

                	
                   

                
	
                  2

                   

                	
                  The
                    Loan
                    and its Purposes.......................................................................

                   

                	
                  21

                   

                
	
                  3

                   

                	
                  Conditions
                    of Utilisation.........................................................................

                   

                	
                  21

                   

                
	
                  4

                   

                	
                  Advance.............................................................................................

                   

                	
                  26

                   

                
	
                  5

                   

                	
                  Repayment..........................................................................................

                   

                	
                  26

                   

                
	
                  6

                   

                	
                  Prepayment.........................................................................................

                   

                	
                  26

                   

                
	
                  7

                   

                	
                  Interest..............................................................................................

                   

                	
                  28

                   

                
	
                  8

                   

                	
                  Indemnities.........................................................................................

                   

                	
                  30

                   

                
	
                  9

                   

                	
                  Fees.................................................................................................

                   

                	
                  34

                   

                
	
                  10

                   

                	
                  Security
                    and Application of Moneys...........................................................

                   

                	
                  35

                   

                
	
                  11

                   

                	
                  Representations
                    and Warranties.................................................................

                   

                	
                  36

                   

                
	
                  12

                   

                	
                  Undertakings
                    and Covenants....................................................................

                   

                	
                  41

                   

                
	
                  13

                   

                	
                  Events
                    of Default..................................................................................

                   

                	
                  47

                   

                
	
                  14

                   

                	
                  Assignment
                    and Sub-Participation..............................................................

                   

                	
                  53

                   

                
	
                  15

                   

                	
                  The
                    Agent, the Security Agent and the Lenders..............................................

                   

                	
                  56

                   

                
	
                  16

                   

                	
                  Set-Off..............................................................................................

                   

                	
                  65

                   

                
	
                  17

                   

                	
                  Payments...........................................................................................

                   

                	
                  65

                   

                
	
                  18

                   

                	
                  Notices.............................................................................................

                   

                	
                  67

                   

                
	
                  19

                   

                	
                  Partial
                    Invalidity...................................................................................

                   

                	
                  70

                   

                
	
                  20

                   

                	
                  Remedies
                    and Waivers...........................................................................

                   

                	
                  70

                


        

      

    

    


    
      
        
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        2

        
          

        

      

      
        
        

      

       

    

    
      	
              21

               

            	
              Miscellaneous......................................................................................

               

            	
              70

               

            
	
              22

               

            	
              Law
                and Jurisdiction..............................................................................

               

            	
              71

               

            
	
              SCHEDULE
                1: The Lenders and the Commitments.................................................

               

            	
              73

               

            
	
              SCHEDULE
                2: Conditions Precedent and Subsequent.............................................

            	
              74

               

            
	
              Part
                I: Conditions precedent to the First Drawdown Date..............................

               

            	
              74

               

            
	
              Part
                II: Conditions subsequent to the First Drawdown Date...........................

               

            	
              77

               

            
	
              Part
                III: Conditions precedent to the Step-up Date......................................

               

            	
              78

               

            
	
              Part
                IV: Conditions subsequent to the Step-up Date.....................................

               

            	
              80

               

            
	
              SCHEDULE
                3: Calculation of Mandatory Cost......................................................

               

            	
              81

               

            
	
              SCHEDULE
                4: Form of Drawdown Notice..........................................................

               

            	
              83

               

            
	
              SCHEDULE
                5: Form of Transfer Certificate.........................................................

               

            	
              84

               

            
	
              SCHEDULE
                6: Form of Compliance Certificate.....................................................

               

            	
              87

               

            
	
              SCHEDULE
                7: The Vessels.............................................................................

               

            	
              88

               

            
	
              Part
                I: The Initial Vessels...................................................................

               

            	
              88

               

            
	
              Part
                II: The Step-up Vessels................................................................

               

            	
              89

               

            
	
              SCHEDULE
                8: Reductions..............................................................................

               

            	
              90

            


    

     

    


    
      
        
          
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    LOAN
      AGREEMENT

     

    Dated:  2nd
      October 2006

     

    BETWEEN:

     

    
      	
              (1)

            	
              TEEKAY
                OFFSHORE OPERATING L.P.,
                a
                limited partnership formed and existing under the laws of the Republic
                of
                the Marshall Islands whose registered office is at The Trust Company
                Complex, Ajeltake Island, PO Box 1405 Majuro, The Marshall Islands,
                MH96960 (the "Borrower");
                and

            


    

     

    
      	
              (2)

            	
              the
                banks listed in Schedule 1, each acting through its office at the
                address
                indicated against its name in Schedule 1 (together the "Lenders"
                and each a "Lender");
                and

            


    

     

    
      	
              (3)

            	
              DNB
                NOR BANK ASA,
                acting as agent (in that capacity the "Agent");
                

            


    

     

    
      	
              (4)

            	
              DNB
                NOR BANK ASA, NORDEA BANK NORGE ASA, New York Branch and
                FORTIS CAPITAL CORP. acting
                as mandated lead arrangers (in that capacity each an "MLA"
                and together the "MLAs");

            


    

     

    
      	
              (5)

            	
              DNB
                NOR BANK ASA
                and NORDEA
                BANK NORGE ASA,
                New
                York Branch
                acting as bookrunners (in that capacity each a "Bookrunner"
                and together the "Bookrunners");
                and

            


    

     

    
      	
              (6)

            	
              DEUTSCHE
                SCHIFFSBANK AKTIENGESELLSCHAFT
                acting as security agent (in that capacity the "Security
                Agent").
                

            


    

     

    WHEREAS:

     


      Each
        of
        the Lenders has agreed to advance to the Borrower its Commitment (aggregating,
        with all the other Commitments,
        a
        revolving credit facility of up to nine hundred and forty million Dollars
        $940,000,000) for
        the
        general corporate purposes of the Borrower (including but not limited to
        the
        making of intercompany loans to its shareholders and/or unitholders and
        Subsidiaries).


     

    IT
      IS AGREED
      as
      follows:

    
       

      
        	
                1

              	
                
                  Definitions
                    and Interpretation

                

              


      

       

    

    
      
        
          	 	
                  1.1  

                	
                   In
                    this Agreement:  

                


        

         

        
          
            
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            4

            
              

            

          

          
            
            

          

        

      

    

    "Administration"
      has
      the
      meaning given to it in paragraph 1.1.3 of the ISM Code.

     

    "Affiliate"
      means,
      in relation to any entity, a Subsidiary of that entity, a Holding Company of
      that entity or any other Subsidiary of that Holding Company.

     

    "Approved
      Brokers"
      means
      H. Clarkson & Co. Ltd, Simpson Spence & Young Shipbrokers Ltd, Fearnley
      AS, R.S. Platou AS and P.F. Bassoe AS.

     

    "Assignments"
      means
      the deeds of assignment of Insurances, Earnings and Requisition Compensation,
      the Charter Rights (if applicable) and of the benefit of any relevant
      Charterer's Assignment, in respect of each of the Vessels referred to in Clause
      10.1.2 (each an "Assignment").

     

    "Authorisation" means
      an
      authorisation, consent, approval, resolution, licence, exemption, filing,
      notarisation or registration.

     

    "Bareboat
      Charters"
      means
      the bareboat charters identified in Schedule 7 for certain of the Vessels
      only on the terms and subject to the conditions of which the relevant Charterer
      will bareboat charter its Vessel to the Bareboat Charterer.

     

    "Bareboat
      Charterer"
      means
      in respect of certain Vessels either (i) FIC and Transpetro or (ii) Petrojarl
      Production as identified against the names of the relevant Vessels in Schedule
      7.

     

    "Borrower's
      Accounts"
      means
      the consolidated financial accounts of the Borrower to be provided to the Agent
      pursuant to Clause 12.1.

     

    "Break
      Costs"
      means
      all sums payable by the Borrower from time to time under Clause
      8.3.

     

    "Business
      Day"
      means a
      day on which banks are open for business of a nature contemplated by this
      Agreement (and not authorised by law to close) in New York, London and any
      other
      financial centre which the Agent may reasonably consider appropriate for the
      operation of the provisions of this Agreement.

     


      "Charter
        Rights"
        in
        relation to a Vessel means all rights and benefits accruing to the Charterer
        of
        that Vessel under or pursuant to the relevant Bareboat Charter and not forming
        part of the Earnings.


     

    
      
        
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    "Charterer"
      in
      respect of certain Vessels only means either UNS or TKN as identified against
      the names of the relevant Vessels in Schedule 7.

     

    "Charterer's
      Assignments"
      means,
      in respect of NORDIC STAVANGER, NORDIC BRASILIA and NORDIC SPIRIT only,
      assignments by the relevant Charterer to the Owner of the Earnings and Charter
      Rights.

     


      "Commitment"
        means,
        in relation to a Lender, the aggregate amount of the
        Loan
        which
        that
        Lender agrees to advance to the Borrower as its several liability as indicated
        against the name of that Lender in Schedule 1 and/or, where the context permits,
        the amount of
        the
        Loan advanced
        by that Lender and remaining outstanding and "Commitments"
        means
        more than one of them.


     

    "Commitment
      Commission"
      means
      the commitment commission to be paid by the Borrower to the Agent on behalf
      of
      the Lenders pursuant to Clause 9.1.

     

    "Commitment
      Termination Date"
      means
      the date being one (1) month before the Maturity Date or such later date as
      the
      Lenders may in their discretion agree.

     

    "Completion
      of Syndication"
      means
      that the Commitments have been fully syndicated in a manner acceptable to the
      MLAs, as conclusively certified in writing by the Agent.

     

    "Compliance
      Certificate"
      means a
      certificate substantially in the form set out in Schedule 6.

     

    "Currency
      of Account"
      means,
      in relation to any payment to be made to a Finance Party under a Finance
      Document, the currency in which that payment is required to be made by the
      terms
      of that Finance Document.

     

    "Deeds
      of Covenants"
      means
      the deeds of covenants referred to in Clause 10.1.1. (each a "Deed
      of Covenant").

     

    "Default"
      means
      an Event of Default or any event or circumstance specified in Clause 13.1 which
      would (with the expiry of a grace period, the giving of notice, the making
      of
      any determination under the Finance Documents or any combination of any of
      the
      foregoing) be an Event of Default.

     

    
      
        
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        6

        
          

        

      

      
        
        

      

    

    "DOC"
      means,
      in relation to the ISM Company, a valid Document of Compliance issued for the
      ISM Company by the Administration under paragraph 13.2 of the ISM
      Code.

     

    "Dollars",
      "US$"
      and
      "$"
      each
      means available and freely transferable and convertible funds in lawful currency
      of the United States of America.

     


      "Drawdown
        Date"
        means
        the date on which
        a
        Drawing
        is
        advanced under Clause 4.


     

    "Drawdown
      Notice"
      means a
      notice substantially in the form set out in Schedule 4.

     


      "Drawing"
        means
        any one amount advanced or to be advanced pursuant to a Drawdown Notice or,
        where the context permits, the amount advanced and for the time being
        outstanding and "Drawings"
        means
        more than one of them.


     

    "Earnings"
      in
      relation to a Vessel means all hires, freights, pool income and other sums
      payable to or for the account of the Owner or the relevant Charterer in respect
      of that Vessel including (without limitation) all remuneration for salvage
      and
      towage services, demurrage and detention moneys, contributions in general
      average, compensation in respect of any requisition for hire, and damages and
      other payments (whether awarded by any court or arbitral tribunal or by
      agreement or otherwise) for breach, termination or variation of any contract
      for
      the operation, employment or use of that Vessel.

     

    "Encumbrance"
      means a
      mortgage, charge, assignment, pledge, lien, or other security interest securing
      any obligation of any person or any other agreement or arrangement having a
      similar effect.

     

    "Environmental
      Affiliate"
      means
      an agent or employee of the Owner or a person in a contractual relationship
      with
      the Owner in respect of the Vessel owned by it (including without limitation,
      the operation of or the carriage of cargo of such Vessel).

     

    "Environmental
      Approvals"
      means
      any present or future permit, licence, approval, ruling, variance, exemption
      or
      other authorisation required under the applicable Environmental
      Laws.

     

    
      
        
          \P1\3549672.7

        

      

      
        7

        
          

        

      

      
        
        

      

    

    "Environmental
      Claim"
      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.

     

    "Environmental
      Incident"
      means:

     

    
      	 	
              (a)

            	
              any
                release of Environmentally Sensitive Material from a Vessel;
                or

            


    

     

    
      	 	
              (b)

            	
              any
                incident in which Environmentally Sensitive Material is released
                from a
                vessel other than a Vessel and which involves a collision between
                a Vessel
                and such other vessel or some other incident of navigation or operation,
                in either case, in connection with which the relevant 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
                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

            


    

     

    
      	 	
              (c)

            	
              any
                other incident in which Environmentally Sensitive Material is released
                otherwise than from such Vessel and in connection with which that
                Vessel
                is actually or potentially liable to be arrested and/or where any
                guarantor, any manager (or any sub-manager of the relevant 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.

            


    

     

    "Environmental
      Laws"
      means
      all present and future laws, regulations, treaties and conventions of any
      applicable jurisdiction which:

     

    
      	 	
              (a)

            	
              have
                as a purpose or effect the protection of, and/or prevention of harm
                or
                damage to, the environment;

            


    

     

    
      	 	
              (b)

            	
              relate
                to the carriage of Environmentally Sensitive Material or to actual
                or
                threatened releases of Environmentally Sensitive
                Material;

            


    

     

    
      
        
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        8

        
          

        

      

      
        
        

      

    

    
      	 	
              (c)

            	
              provide
                remedies or compensation for harm or damage to the environment;
                or

            


    

     

    
      	 	
              (d)

            	
              relate
                to Environmentally Sensitive Materials or health or safety
                matters.

            


    

     

    "Environmentally
      Sensitive Material"
      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.

     

    
      	 	 	
              "Event
                of Default"
                means any of the events or circumstances set out in
                Clause 13.1.

            


    

     

    "Execution
      Date"
      means
      the date on which this Agreement is executed by each of the parties
      hereto.

     

    "Facility"
      means
      the reducing revolving credit facility made available by the Lenders to the
      Borrower pursuant to this Agreement.

     

    "Facility
      Outstandings"
      means
      the total of all Drawings made at that time, to the extent not reduced by
      repayments, prepayments and voluntary reductions.

     

    "Facility
      Period"
      means
      the period beginning on the date of this Agreement and ending on the date when
      the whole of the Indebtedness has been repaid in full and the Security Parties
      have ceased to be under any further actual or contingent liability to the
      Finance Parties under or in connection with the Finance Documents.

     

    "Fee
      Letter"
      means
      the letters dated 30 August 2006 between the Borrower and the Agent and/or
      the
      Bookrunners and/or the MLAs as applicable setting out any of the fees referred
      to in Clause 9.

     

    "FIC"
      means
      Fronape International Company of P.O. Box 714, Georgetown, Grand Cayman, Cayman
      Islands.

     

    
      
        
          \P1\3549672.7

        

      

      
        9

        
          

        

      

      
        
        

      

    

    "Finance
      Documents"
      means
      this Agreement, the Security Documents, any Fee Letter and any other document
      designated as such by the Agent and the Borrower and "Finance
      Document"
      means
      any one of them.

     

    "Finance
      Parties"
      means
      the Agent, the Security Agent, the MLAs, the Bookrunners and the Lenders and
      "Finance
      Party"
      means
      any one of them.

     

    "First
      Drawdown Date"
      means
      the date on which the first Drawing is advanced under Clause 4.

     

    "Free
      Liquidity"
      means
      cash, cash equivalents and marketable securities of maturities less than one
      (1)
      year to which the Group shall have free, immediate and direct access each as
      reflected in the Borrower's most recent quarterly management accounts forming
      part of the Borrower's Accounts.

     

    "GAAP"
      means
      generally accepted accounting principles in the United States of
      America.

     

    "Group"
      means
      the Borrower and each of its Subsidiaries.

     

    "Guarantee"
      means
      the guarantee and indemnity referred to in Clause 10.1.3.

     

    "Guarantor"
      means
      the Owner and/or (where the context permits) any other person who shall at
      any
      time during the Facility Period give to the Lenders or to the Security Agent
      on
      their behalf a guarantee and/or indemnity for the repayment of all or part
      of
      the Indebtedness.

     

    "Head
      Charter",
      in
      respect of NORDIC STAVANGER, NORDIC BRASILIA and NORDIC SPIRIT only, means
      the
      charter between the Owner and the relevant Charterer.

     

    "Holding
      Company"
      means,
      in relation to any entity, any other entity in respect of which it is a
      Subsidiary.

     

    "Indebtedness"
      means
      the aggregate from time to time of: the amount of the Loan
      outstanding; all accrued and unpaid interest on the Loan;
      and all
      other sums of any nature (together with all accrued and unpaid interest on
      any
      of those sums) which from time to time may be payable by the Borrower to any
      of
      the Finance Parties under all or any of the Finance Documents.

     

    
      
        
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        10

        
          

        

      

      
        
        

      

    

    "Initial
      Vessels"
      means
      the Vessels listed in Schedule 7 Part 1 and everything now or in the future
      belonging to them on board and ashore (each an "Initial
      Vessel").

     

    "Insurances"
      in
      relation to a Vessel means all policies and contracts of insurance (including
      all entries in protection and indemnity or war risks associations) which are
      from time to time taken out or entered into in respect of or
      in
      connection with that
      Vessel
      or her increased value and (where the context permits) all benefits under such
      contracts and policies, including all claims of any nature and returns of
      premium.

     


      "Interest
        Payment Date"
        means
        each date for the payment of interest in accordance with Clause 7.7.


     

    "Interest
      Period"
      means
      each period for the payment of interest selected by the Borrower or agreed
      by
      the Agent pursuant to Clause 7.

     

    "ISM
      Code"
      means
      the International Management Code for the Safe Operation of Ships and for
      Pollution Prevention.

     

    "ISM
      Company"
      means,
      at any given time, the company responsible for a Vessel's compliance with the
      ISM Code under paragraph 1.1.2 of the ISM Code.

     

    "ISPS"
      Code"
      means
      the International Ship and Port Facility Security Code.

     

    "ISPS
      Company"
      means,
      at any given time, the company responsible for a Vessel's compliance with the
      ISPS Code.

     

    "ISSC"
      means a
      valid international ship security certificate for a Vessel issued under the
      ISPS
      Code.

     

    "law"
      or
      "Law"
      means
      any law, statute, treaty, convention, regulation, instrument or other
      subordinate legislation or other legislative or quasi-legislative rule or
      measure, or any order or decree of any government, judicial or public or other
      body or authority, or any directive, code of practice, circular, guidance note
      or other direction issued by any competent authority or agency (whether or
      not
      having the force of law).

     

    "LIBOR"
      means:

     

    
      
        
          \P1\3549672.7

        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      
        	 	
                (a)

              	
                the
                  applicable Screen Rate; or

              


      

       

    

     

    
      	 	
              (b)

            	
              (if
                no Screen Rate is available for any Interest Period) the arithmetic
                mean
                of the rates (rounded upwards to four decimal places) as supplied
                to the
                Agent at its request quoted by the Reference Banks (or by two of
                them if
                one is unable to quote) to leading banks in the London interbank
                market,

            


    

     

    at
      11.00
      a.m. London time two (2) Business Days before the first day of the relevant
      Interest Period for the offering of deposits in Dollars in an amount comparable
      to the
      Loan (or
      any relevant part of the Loan)
      and
      for a period comparable to the relevant Interest Period.

     


      "Loan"
        means
        the aggregate amount advanced or to be advanced by the Lenders to the Borrower
        under Clause 4 or, where the context permits, the amount advanced and for
        the
        time being outstanding.


     

    "Majority
      Lenders"
      means a
      Lender or Lenders whose Commitments aggregate more than sixty six and two thirds
      per cent (66 2/3%) of the aggregate of all the Commitments.

     

    "Management
      Agreement"
      means
      any agreement(s) for the commercial and/or technical management of the Vessels
      entered into between the Owner and a company which is not controlled either
      by
      Teekay Shipping Corporation or the Borrower.

     

    "Managers"
      in
      relation to each Vessel means a management company which is controlled by Teekay
      Shipping Corporation or such other commercial and/or technical managers of
      the
      Vessels nominated by the Borrower as the Agent acting on the instructions of
      the
      Majority Lenders may approve such approval not to be unreasonably withheld
      or
      delayed.

     

    "Mandatory
      Cost"
      means
      the percentage rate per annum calculated by the Agent in accordance with
      Schedule 3.

     

    "Margin"
      means
      nought point six two five per cent (0.625%) per annum.

     


      "Material
        Adverse Effect"
        means a
        material adverse change in, or a material adverse effect on:


     

    
      
        
          \P1\3549672.7

        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	 	
              (a)

            	
              the
                financial condition, assets, prospects or business of any Security
                Party
                or on the consolidated financial condition, assets, prospects or
                business
                of the Group;

            


    

     

    
      	 	
              (b)

            	
              the
                ability of any Security Party to perform and comply with its obligations
                under any Security Document or to avoid any Event of
                Default;

            


    

     

    
      	 	
              (c)

            	
              the
                validity, legality or enforceability of any Security Document;
                or

            


    

     

    
      	 	
              (d)

            	
              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,

            


    

     

    provided
      that, in determining whether any of the forgoing 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 Borrower
      and the Guarantor to perform each of their obligations under the Security
      Documents.

     

    "Maturity
      Date"
      means
the
      earlier of (i) the date falling ninety six (96) months after the First Drawdown
      Date and (ii) 31 October 2014.

     

    "Material
      Subsidiary"
      means:

     

    any
      Subsidiary of the Borrower whose assets, as determined in accordance with GAAP
      and as shown from the most recent financial statements available to the 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 as determined in accordance with GAAP and as shown from the most recently
      available financial statements of the Group,

     

    provided
      that:

    
       

      
        	 	
                (i)

              	
                in
                  respect of any Subsidiary of the Borrower, 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; 

              


      

       

      
        
          
            \P1\3549672.7

          

        

        
          13

          
            

          

        

        
          
          

        

      

      
         

        
          	 	
                  (ii)

                	
                   a
                    statement by the auditors of the Borrower to the effect that,
                    in their
                    opinion, a Subsidiary of the Borrower 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.
                    

                


        

         

      

    

    "Maximum
      Amount"
      means


     

    
      	 	
              (i)

            	
              prior
                to the Step-up Date, five hundred and twenty million Dollars
                ($520,000,000); and 

            


    

     

    
      	 	
              (ii)

            	
              on
                or after the Step-up Date, nine hundred and forty million Dollars
                ($940,000,000), 

            


    

     

    as
      reduced from time to time in accordance with Clause 3.4 and/or Clause
      7.9.5.

     

    the
      "MLP"
      means
      Teekay Offshore Partners L.P.

     

    "Mortgages"
      means
      the statutory mortgages referred to in Clause 10.1.1 together with the Deeds
      of
      Covenants.

     

    "Necessary
      Authorisations" means
      all
      Authorisations of any person including any government or other regulatory
      authority required by applicable Law to enable it to:

     

    
      	 	
              (a)

            	
              lawfully
                enter into and perform its obligations under the Security Documents
                to
                which it is party;

            


    

     

    
      	 	
              (b)

            	
              ensure
                the legality, validity, enforceability or admissibility in evidence
                in
                England and, if different, its jurisdiction of incorporation, of
                such
                Security Documents to which it is party;
                and

            


    

     

    
      	 	
              (c)

            	
              carry
                on its business from time to time.

            


    

     

    "Owner"
      means
      Teekay Navion Offshore Loading Pte Ltd, a company incorporated according to
      the
      law of Singapore with company registration no. 20041820N whose registered office
      is at 8 Shenton Way, #44-04 Temasek Tower, Singapore 068811 at all times to
      be a
      Subsidiary of the Borrower.

     

    
      
        
          \P1\3549672.7

        

      

      
        14

        
          

        

      

      
        
        

      

    

    "Petroatlantic"
      means
      Petroatlantic L.L.C. of Trust Company Complex, Ajeltake Road, Ajeltake Island,
      Majuro, The Marshall Islands, MH96960.

     

    "Petrol
      Geo"
      means
      Petroleum Geo Services ASA of Strandveien 50, Postboks 89, N-1324
      Lysaker.

     

    "Petrojarl
      Production"
      means
      Petrojarl Production AS of Beddingen 16, 7405 Trondheim, Norway (formerly known
      as Golar-Nor Offshore AS).

     

    "Petrojarl"
      means
      Petrojarl ASA of Beddingen 16, 7405 Trondheim, Norway.

     

    "Petronordic"
      means
      Petronordic LLC of Trust Company Complex, Ajelktake Road, Ajeltake Island,
      Majuro, The Marshall Islands, MH96960.

     

    "Permitted
      Encumbrance"
      means
      (i) any Encumbrance which has the prior written approval of the Agent acting
      on
      the instructions of all the Lenders or (ii), or any liens for current crews'
      wages and salvage and liens incurred in the ordinary course of trading a Vessel
      up to an aggregate amount at any time not exceeding ten million Dollars
      ($10,000,000). 

     

    "Pre-Approved
      Classification Society"
      means
      any of Det norske Veritas, Lloyds Register, American Bureau of Shipping (ABS),
      Germanischer Lloyd or Bureau Veritas or such other classification society
      acceptable to the Majority Lenders.

     

    "Pre-Approved
      Flag"
      means
      Marshall Islands, Norwegian International Ship Registry, Liberia, Panama, Isle
      of Man, Cayman Islands, Bermuda, Bahamas, Singapore or (in the case of "NAVION
      STAVANGER", "NORDIC BRASILIA", "NORDIC SPIRIT" and any other Vessels on charter
      to Transpetro) Registro Especial Brasileiro

     

    "Proportionate
      Share"
      means,
      at any time, the proportion which a Lender’s Commitment (whether
      or not advanced) then bears to the aggregate Commitments of all the Lenders
      (whether
      or not advanced) being on the Execution Date the percentage indicated against
      the name of that Lender in Schedule 1.

     

    
      
        
          \P1\3549672.7

        

      

      
        15

        
          

        

      

      
        
        

      

    


      "Quiet
        Enjoyment Letters"
        means
        those letters between the Agent and the Bareboat Charterer relating to those
        Vessels subject to Bareboat Charters.


     

    "Reduction
      Date"
      means
      each date falling at consecutive six monthly intervals after the earlier to
      occur of (i) the First Drawdown Date and (ii) 31 October 2006.

     

    "Reference
      Banks"
      means,
      in relation to LIBOR, the principal London offices of each of the MLAs or such
      other banks as may be appointed by the Agent in consultation with the
      Borrower.

     

    "Relevant
      Documents"
      means
      the Finance Documents, the Bareboat Charters, the Charterer's Assignments,
      the
      Quiet Enjoyment Letters and the Management Agreements.

     

    "Relevant
      Percentage"
      means,
      in respect of any Subsidiary of the Borrower 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 Borrower
      at such time.

     

    "Relevant
      Reduction Amount"
      means,
      in respect of each Vessel, a figure equal to (x) a fraction in which (i) the
      numerator is the market value of such Vessel (based on the most recent
      Valuation) and (ii) the denominator is the aggregate market value of all the
      Vessels (based on the most recent Valuations) multiplied by (y) the Maximum
      Amount.

     

    "Replacement
      Vessel"
      means a
      vessel acceptable to the Agent acting on the instructions of the Majority
      Lenders.

     

    "Requisition
      Compensation"
      in
      relation to a Vessel means all compensation or other money which may from time
      to time be payable to the Owner as a result of that Vessel being requisitioned
      for title or in any other way compulsorily acquired (other than by way of
      requisition for hire). 

     

    "Same
      Day Drawing",
      means,
      in respect of the first drawing only, a Drawing requested by the Borrower prior
      to 1600 hours (New York time) on the day before the First Drawdown Date and
      made
      by the Lenders on the First Drawdown Date. 

     

    "Screen
      Rate"
      means
      in relation to LIBOR, the British Bankers' Association Interest Settlement
      Rate
      for the relevant currency and period  displayed
      on the appropriate page of the Reuters page
      LIBOR 01 (or such other page or pages which replace(s) such page for the
      purposes of displaying offered rates of leading banks, for deposits in Dollars
      of amounts equal to the amount of the relevant Drawing for a period equal in
      length to the relevant Interest Period.

     

    
      
        
          \P1\3549672.7

        

      

      
        16

        
          

        

      

      
        
        

      

    

    "Security
      Documents"
      means
      the Mortgages, the Deeds of Covenants, the Assignments, the Guarantee, or (where
      the context permits) any one or more of them and any other agreement or document
      which may at any time be executed by any person as security for the payment
      of
      all or any part of the Indebtedness and "Security
      Document"
      means
      any one of them.

     

    "Security
      Parties"
      means
      at any relevant time, the Borrower, the Guarantor and any other person who
      may
      at any time during the Facility Period be liable for, or provide security for,
      all or any part of the Indebtedness (but for the avoidance of doubt shall not
      include the Charterer or Bareboat Charterer), and "Security
      Party"
      means
      any one of them.

     

    "SMC"
      means a
      valid safety management certificate issued for a Vessel by or on behalf of
      the
      Administration under paragraph 13.7 of the ISM Code.

     

    "SMS"
      means a
      safety management system for a Vessel developed and implemented in accordance
      with the ISM Code.

     

    "Step-up
      Date"
      means
      the date on which the Agent confirms that both (i) all of the conditions set
      out
      in Part III of Schedule 2 have been satisfied and (ii) Completion of Syndication
      has occurred.

     

    "Step-up
      Vessels"
      means
      the Vessels listed in Schedule 7 Part II and everything now or in the future
      belonging to them on board and ashore (each a "Step-up
      Vessel").

     

    "Subsidiary"
      means a
      subsidiary undertaking, as defined in section 736 Companies Act 1985 or any
      analogous definition under any other relevant system of law.

     

    "Tax"
      means
      any tax, levy, impost, duty or other charge or withholding of a similar nature
      (including any penalty or interest payable in connection with any failure to
      pay
      or any delay in paying any of the same) and "Taxation"
      shall
      be interpreted accordingly.

     

    
      
        
          \P1\3549672.7

        

      

      
        17

        
          

        

      

      
        
        

      

    

    "TKN"
      means
      Teekay Norway AS of Verven 4, N-4014, P.O. Box 8035, N-4068, Stavanger,
      Norway.

     

    "Total
      Debt"
      means
      the aggregate of:-

     

    
      
        	 	
                
                  (a)

                

              	
                the
                  amount calculated in accordance with GAAP shown as each of "long
                  term
                  debt", "short term debt" and "current portion of long term debt"
                  on the
                  latest consolidated balance sheet of the Borrower;
                  and

              


      

       

    

    
      	 	
              (b)

            	
              the
                amount of any liability in respect of any lease or hire purchase
                contract
                entered into by the Borrower or any of its Subsidiaries which would,
                in
                accordance with GAAP, be treated as a finance or capital lease (excluding
                any amounts applicable to leases to the extent that the lease obligations
                are secured by a security deposit which is held on the balance sheet
                under
                "Restricted
                Cash").

            


    

     

    "Total
      Loss"
      in
      relation to a Vessel means: 

     

    
      	 	
              (a)

            	
              an
                actual, constructive, arranged, agreed or compromised total loss
                of that
                Vessel; or 

            


    

     

    
      	 	
              (b)

            	
              the
                requisition for title or compulsory acquisition, nationalisation
                or
                expropriation of that Vessel by or on behalf of any government or
                other
                authority (other than by way of requisition for hire);
                or

            


    

     

    
      	 	
              (c)

            	
              the
                capture, seizure, arrest, detention or confiscation of that Vessel
                unless
                the Vessel is released and returned to the possession of the Owner
                within
                ninety (90) days after the capture, seizure, arrest, detention or
                confiscation in question.

            


    

     

    "Transfer
      Certificate"
      means a
      certificate substantially in the form set out in Schedule 5 or any other form
      agreed between the Agent and the Borrower.

     

    "Transfer
      Date"
      means,
      in relation to any Transfer Certificate, the
      date
      for the making of the Transfer specified in the schedule to such Transfer
      Certificate.

     

    
      
        
          \P1\3549672.7

        

      

      
        18

        
          

        

      

      
        
        

      

    

    "Transpetro"
      means
      Petrobras Transporte S.A. - Transpetro of Av Presidente Vargas, 328, 20091-060
      Rio de Janeiro, R.J. Brazil.

     

    "Trust
      Property"
      means:

     

    
      	 	
              (a)

            	
              all
                benefits derived by the Security Agent from Clause 10;
                and

            


    

     

    
      	 	
              (b)

            	
              all
                benefits arising under (including, without limitation, all proceeds
                of the
                enforcement of) each of the Security
                Documents,

            


    

     

    with
      the
      exception of any benefits arising solely for the benefit of the Security
      Agent.

     

    "UNS"
      means
      Ugland Nordic Shipping AS of P.O. Box 54, 3201 Sandefjord, Norway a company
      formed by the merger under Norwegian law of Ugland Nordic Investment AS and
      Ugland Nordic Shipping AS.

     

    "Valuation"
      means
      in relation to a Vessel or a Replacement Vessel, the written valuation of that
      Vessel or Replacement Vessel expressed in Dollars prepared by one of the
      Approved Brokers (or such other firm of reputable independent shipbrokers as
      may
      be acceptable to the Majority Lenders) to be nominated by the Borrower, such
      nomination to be subject to the approval of the Agent. Such valuations shall
      be
      prepared at the Borrower's expense, without a physical inspection, on the basis
      of a sale for prompt delivery for cash at arm's length between a willing buyer
      and a willing seller without the benefit of any charterparty or other
      engagement.

     

    "Vessels"
      means
      the
      vessels listed in Schedule 7 (comprising the Initial Vessels and the Step-up
      Vessels and including any Replacement Vessel) and everything now or in the
      future belonging to them on board and ashore (each a "Vessel)".

     

    "WSJ
      Prime Rate"
      means
      the "Prime Rate" as published in the printed copy of the Wall Street Journal
      on
      any particular day as the same may be adjusted from time to time..

     

    
      
        	 	
                1.2 

              	
                 In
                  this Agreement: 

              


      

       

    

    
      	 	
              1.2.1

            	
              words
                denoting the plural number include the singular and vice
                versa;

            


    

     

    
      
        
          \P1\3549672.7

        

      

      
        19

        
          

        

      

      
        
        

      

    

    
      	 	
              1.2.2

            	
              words
                denoting persons include corporations, partnerships, associations
                of
                persons (whether incorporated or not) or governmental or
                quasi-governmental bodies or authorities and vice
                versa;

            


    

     

    
      	 	
              1.2.3

            	
              references
                to Recitals, Clauses and Schedules are references to recitals, clauses
                and
                schedules to or of this Agreement; 

            


    

     

    
      	 	
              1.2.4

            	
              references
                to this Agreement include the Recitals and the
                Schedules;

            


    

     

    
      	 	
              1.2.5

            	
              the
                headings and contents page(s) are for the purpose of reference only,
                have
                no legal or other significance, and shall be ignored in the interpretation
                of this Agreement;

            


    

     

    
      	 	
              1.2.6

            	
              references
                to any document (including, without limitation, to all or any of
                the
                Relevant Documents) are, unless the context otherwise requires, references
                to that document as amended, supplemented, novated or replaced from
                time
                to time;

            


    

     

    
      	 	
              1.2.7

            	
              references
                to statutes or provisions of statutes are references to those statutes,
                or
                those provisions, as from time to time amended, replaced or
                re-enacted;

            


    

     

    
      	 	
              1.2.8

            	
              references
                to any Finance Party include its successors, transferees and assignees;
                

            


    

     

    
      	 	
              1.2.9

            	
              a
                time of day (unless otherwise specified) is a reference to New York
                time.

            


    

     

    
      
        	 	
                1.3

              	
                Offer
                  letter 

              


      

       

    

    This
      Agreement supersedes the terms and conditions contained in any correspondence
      relating to the subject matter of this Agreement exchanged between any Finance
      Party and the Borrower or their representatives prior to the date of this
      Agreement. 

     

    
      
        
          \P1\3549672.7

        

      

      
        20

        
          

        

      

      
        
        

      

    

    
      
        
          	
                  2

                	
                  
                    
                      The
                        Loan
                        and its
                        Purposes

                    

                  

                


        

         

      

    


      
        	 	
                2.1

              	
                Amount
                  Subject to the terms of this Agreement, each of the Lenders agrees
                  to make
                  available to the Borrower its
                  Commitment of a
                  revolving credit in an aggregate amount not exceeding the Maximum
                  Amount
                  at any one time.

              


      


     

    
      	 	
              2.2

            	
              Finance
                Parties' obligations The
                obligations of each Finance Party under the Finance Documents are
                several.
                Failure by a Finance Party to perform its obligations under the Finance
                Documents does not affect the obligations of any other party to the
                Finance Documents. No Finance Party is responsible for the obligations
                of
                any other Finance Party under the Finance
                Documents.

            


    

     


      
        	 	
                2.3

              	
                Purposes The
                  Borrower shall apply the
                  Loan for the purpose referred to in the Recital.

              


      


     

    
      	 	
              2.4

            	
              Monitoring
                No
                Finance Party is bound to monitor or verify the application of any
                amount
                borrowed under this Agreement.

            


    

     

    
      
        
          
            	
                    3

                  	
                    
                      
                        Conditions
                          of Utilisation

                      

                    

                  


          

           

        

      

    

    
      	 	
              3.1

            	
              Conditions
                precedent Before
                any Lender shall have any obligation to advance any Drawing under
                the
                Facility the Borrower shall deliver or cause to be delivered to or
                to the
                order of the Agent all
                of the documents and other
                evidence listed in Part I of Schedule
                2.

            


    

     


      
        	 	
                3.2

              	
                Further
                  conditions precedent The
                  Lenders will only be obliged to advance a
                  Drawing
                  if
                  on the date of the Drawdown Notice and on the proposed Drawdown
                  Date:

              


      


     


      
        	 	
                3.2.1

              	
                no
                  Default is continuing or would result from the advance of that
                  Drawing;
                  and

              


      


     

    
      	 	
              3.2.2

            	
              the
                representations
                made by the Borrower under Clause 11 are true in all material
                respects.

            


    

     

    
      	
            	
              3.3

            	
              Drawing
                limit The
                Lenders will only be obliged to advance a Drawing
                if:

            


    

     
    

        
          	 	
                  3.3.1 

                	no other Drawing has been made on the same Business
                  Day;


        


       

      
        
          
            \P1\3549672.7

          

        

        
          21

          
            

          

        

        
          
          

        

      

    


      
        	 	
                3.3.2

              	
                that
                  Drawing will not result in there being more than seven Drawings
                  outstanding at any one time;

              


      


    
       


        
          	 	
                  3.3.3

                	
                  that
                    Drawing is not less than five million Dollars ($5,000,000) and
                    in an
                    integral multiple of one million Dollars ($1,000,000);
                    and

                


        


      
         


          
            	 	
                    3.3.4

                  	
                    that
                      Drawing will not increase the outstanding amount of the Loan
                      to a sum in
                      excess of the Maximum Amount. 

                  


          


          

      

    

    The
      First
      Drawdown Date must occur on or before 31 October 2006 or such later date as
      the
      Majority Lenders shall agree.

     

    
      
        	 	
                3.4

              	
                Facility
                  Reduction 

              


      

       

      
        
          	 	
                  3.4.1

                	
                  The
                    amount of the Facility available to the Borrower for drawing
                    under this
                    Agreement shall, subject to the provisions of Clause 3.4.5, be
                    five
                    hundred and twenty million Dollars ($520,000,000) prior to the
                    Step-up
                    Date and nine hundred and forty million Dollars ($940,000,000)
                    during the
                    period from the Step-up Date until the first Reduction Date.
                    On the
                    Reduction Dates the amount of the Facility available for drawing
                    shall be
                    reduced by the amounts set out in Schedule 8 (the "Initial
                    Reduction Amounts").
                    On the Maturity Date the Facility available shall be reduced
                    to zero.
                    Subject to the proviso hereto, the mandatory reductions in the
                    amount of
                    the Facility available for drawing required pursuant to this
                    Clause will
                    be made in the amounts and at the times specified whether or
                    not the
                    Maximum Amount is reduced pursuant to Clause 3.4.2, Clause 3.4.3,
                    Clause
                    3.4.4, Clause 6.1 or Clause 7.9. PROVIDED ALWAYS THAT any reductions
                    pursuant to Clause 3.4.2 (voluntary reductions), Clause 3.4.3
                    (sale) or
                    Clause 3.4.4 (Total Loss) shall be applied to the remaining mandatory
                    reductions hereunder on a pro rata
                    basis.

                


        

         

        
          
            
              	 	
                      3.4.2

                    	
                      The
                        Borrower may voluntarily cancel the Maximum Amount in whole
                        or in part in
                        an amount of not less than five million Dollars ($5,000,000)
                        such amount
                        to be in integral multiples of one million Dollars ($1,000,000)
                        (or as
                        otherwise may be agreed by the Agent), provided that it has
                        first given to
                        the Agent not fewer than five (5) Business Days' prior written
                        notice
                        expiring on a Business Day (the "Cancellation
                        Date")
                        of its desire to reduce the Maximum Amount; such notice once
                        received by
                        the Agent shall be irrevocable and shall oblige the Borrower
                        to make
                        payment of all interest and Commitment Commission accrued
                        on the amount so
                        cancelled up to and including the Cancellation Date together
                        with any
                        Break Costs in respect of such cancelled amount if the Cancellation
                        Date
                        is not the final day of an Interest Period. Any such reduction
                        in the
                        Maximum Amount shall not be reversed. If, as a result of
                        any such
                        cancellation, the Loan outstanding would exceed the Maximum
                        Amount, the
                        Borrower shall, on the Cancellation Date, prepay such amount
                        of the Loan
                        as will ensure that the Loan outstanding is not greater than
                        the Maximum
                        Amount.

                    


            

             

            
              
                
                  \P1\3549672.7

                

              

              
                22

                
                  

                

              

              
                
                

              

            

            
              
                
                  	 	
                          3.4.3

                        	
                          In
                            the event of a sale or disposal of a Vessel or the Agent
                            having received
                            not less than 5 Business Days' notice from the Borrower
                            requesting that
                            the security relating to a Vessel be released and discharged
                            (a "Released
                            Vessel"),
                            the Maximum Amount shall be reduced by the Relevant Reduction
                            Amount
                            applicable to that Vessel, such reduction to be applied
                            on a pro rata
                            basis against the Initial Reduction Amounts as reduced
                            from time to time
                            in accordance with this clause 3.4. Such reduction shall
                            be made in the
                            case of a sale or disposal of such Vessel on the date
                            of such sale or
                            disposal and in the case of a Released Vessel on the
                            date proposed by the
                            Borrower for release and discharge of the security relating
                            to that Vessel
                            unless the Vessel or Released Vessel in question is replaced
                            on or prior
                            to the sale, disposal or release with a Replacement Vessel
                            and in such
                            case of replacement any security held by the Agent (whether
                            directly or
                            indirectly) from the Owner and over such Vessel or Released
                            Vessel is
                            reconstituted immediately after the sale to the new owner
                            or after the
                            release and discharge of security (as the case may be)
                            or over the
                            Replacement Vessel in substantially identical form, and
                            the Agent obtains
                            favourable legal opinions in respect of such reconstituted
                            security. If,
                            as a result of any reduction in the Maximum Amount pursuant
                            to this
                            Clause, the Loan outstanding would exceed the Maximum
                            Amount, the Borrower
                            shall, on the date of the sale, disposal or replacement,
                            prepay such
                            amount of the Loan as will ensure that the Loan outstanding
                            is not greater
                            than the Maximum Amount. Any such prepayment shall oblige
                            the Borrower to
                            make payment of all interest and Commitment Commission
                            accrued on the
                            amount so reduced up to and including the date of reduction
                            together with
                            any Break Costs in respect of such reduced amount if
                            the date of such
                            reduction is not the final day of an Interest Period.
                            Any such reduction
                            in the Maximum Amount shall not be
                            reversed.

                        


                

                
                  
                     

                    
                      
                        
                          \P1\3549672.7

                        

                      

                      
                        23

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    
                      	 	
                              3.4.4

                            	
                              In
                                the event that any Vessel becomes a Total Loss, on
                                the earlier to occur of
                                (a) the date of receipt of the proceeds of the Total
                                Loss and (b) the date
                                falling one hundred and eighty (180) days after the
                                occurrence of the
                                Total Loss (the "Reduction
                                Date"),
                                the Maximum Amount shall (subject to the proviso
                                hereto) be reduced by the
                                Relevant Reduction Amount in respect of such Vessel.
                                Any such reductions
                                in the Maximum Amount shall not be reversed. If,
                                as a result of any
                                reduction in the Maximum Amount pursuant to this
                                Clause the Loan
                                outstanding would exceed the Maximum Amount, the
                                Borrower shall, on the
                                earlier to occur of (i) the date on which the Owner
                                receives the proceeds
                                of such Total Loss and (ii) the one hundred and eightieth
                                day after the
                                date of such Total Loss occurring, prepay such amount
                                of the Loan as will
                                ensure that the Loan outstanding is equal to or less
                                than the Maximum
                                Amount. Any such prepayment shall not be reborrowed
                                and Clause 8.3 shall
                                apply to any such prepayment. PROVIDED ALWAYS that
                                if there is an
                                investment in a Replacement Vessel on or prior to
                                the Reduction Date, and
                                a guarantee from the owner of the Replacement Vessel
                                (in substantially the
                                same form as the Guarantee or such other form as
                                the Majority Lenders may
                                require at that time) and security over such Replacement
                                Vessel acceptable
                                to the Majority Lenders in their absolute discretion
                                is also executed and
                                delivered either prior to or on the Reduction Date,
                                then the reduction in
                                the Maximum Amount shall not
                                apply.

                            


                    

                    
                      
                         

                        
                          	 	
                                  3.4.5

                                	
                                  To
                                    the extent that repayments or prepayments made
                                    by the Borrower to the
                                    Agent in accordance with this Agreement reduce
                                    the Loan outstanding to
                                    less than the Maximum Amount, the Borrower shall
                                    again be entitled to make
                                    Drawings up to the Commitment Termination Date
                                    in accordance with and
                                    subject to the terms of this Agreement. Any part
                                    of the Facility which is
                                    undrawn on the Commitment Termination Date shall
                                    be automatically
                                    cancelled.

                                


                        

                        
                          
                             

                            
                              
                                
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                                24

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                            
                              	 	
                                      3.4.6

                                    	
                                      Simultaneously
                                        with each reduction of the Maximum Amount
                                        in accordance with Clause 3.4.1,
                                        Clause 3.4.2, Clause 3.4.3 or Clause 3.4.4
                                        (as the case may be), the
                                        Commitment of each Lender will reduce so
                                        that the Commitments of the
                                        Lenders in respect of the reduced Maximum
                                        Amount remain in accordance with
                                        their respective Proportionate
                                        Shares.

                                    


                            

                            
                               

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          	 	
                  3.5 

                	
                  Termination
                    Date No
                    Lender shall be under any obligation to advance all or any part
                    of its
                    Commitment after the Commitment Termination
                    Date.

                


        

         

      

    


      
        	 	
                3.6

              	
                Conditions
                  subsequent
                  The Borrower undertakes to deliver or to cause to be delivered
                  to the
                  Agent:

              


      


     


      
        	 	
                3.6.1

              	
                on,
                  or as soon as practicable after, the First
                  Drawdown
                  Date the additional documents and other evidence listed in Part
                  II of
                  Schedule 2; and 

              


      


     

    
      	 	
              3.6.2

            	
              on,
                or as soon as practicable after, the Step-up Date the additional
                documents
                and other evidence listed in Part IV of Schedule
                2.

            


    

     


      
        	 	
                3.7

              	
                No
                  Waiver
                  If
                  the Lenders in their sole discretion agree to advance a
                  Drawing
                  to
                  the Borrower before all of the documents and evidence required
                  by Clause
                  3.1 have been delivered to or to the order of the Agent, the Borrower
                  undertakes to deliver all outstanding documents and evidence to
                  or to the
                  order of the Agent no later than the date specified by the
                  Agent.

              


      


     

    The
      advance of all or any part of the Loan
      under
      this Clause 3.7
      shall
      not be taken as a waiver of the Lenders' right to require production of all
      the
      documents and evidence required by Clause 3.1.

     


      
        	 	
                3.8

              	
                Form
                  and content
                  All documents and evidence delivered to the Agent under this Clause
                  3
                  shall:

              


      


     

    

        
          	 	
                  3.8.1

                	
                  be
                    in form and substance reasonably acceptable to the Agent;
                    and

                


        


       

    


      
        	 	
                3.8.2

              	
                if
                  reasonably required by the Agent, be certified, notarised, legalised
                  or
                  attested in a manner acceptable to the
                  Agent.

              


      


    
      
         

        
          
            
              \P1\3549672.7

            

          

          
            25

            
              

            

          

          
            
            

          

        

        
          
            
              
                	
                        4

                      	
                        
                          
                            Advance 

                          

                        

                      


              

               

            

          

        

      

    


      
        	 	
                4.1

              	
                Drawdown
                  Request The
                  Borrower may request a Drawing to be advanced in one amount on
                  any
                  Business Day prior to the Commitment Termination Date by delivering
                  to the
                  Agent a duly completed Drawdown Notice not more than ten (10) and
                  not
                  fewer than three (3) Business Days before the proposed Drawdown
                  Date save
                  in respect of a Same Day
                  Drawing.

              


      


     


      
        	 	
                4.2

              	
                Lenders'
                  participation Subject
                  to Clauses 2 and 3, the Agent shall promptly notify each Lender
                  of the
                  receipt of a
                  Drawdown Notice, following which each Lender shall advance its
                  Proportionate
                  Share of the relevant Drawing
                  to
                  the Borrower through the Agent on the
                  relevant
                  Drawdown Date.

              


      


    
      
         

        
          
            
              
                	
                        5

                      	
                        
                          
                            Repayment 

                          

                        

                      


              

               

            

          

        

      

    


      
        	 	
                5.1

              	
                Repayment
                  of each Drawing The
                  Borrower agrees to repay each Drawing to the Agent for the account
                  of the
                  Lenders on the last day of the Interest Period in respect of that
                  Drawing
                  unless the Borrower selects a further Interest Period for that
                  Drawing in
                  accordance with Clause 7 provided that the Borrower shall not be
                  permitted
                  to select such a further Interest Period if a Default has occurred
                  and
                  shall then be obliged to repay such Drawing on the last day of
                  its then
                  current Interest Period. The Borrower shall on the Maturity Date repay to
                  the Agent as agent for the Lenders all Facility
                  Outstandings.

              


      


     


      
        	 	
                5.2

              	
                Reborrowing
                  Amounts
                  of the Loan which are repaid or prepaid shall be available for
                  reborrowing
                  in accordance with Clause 3 prior to the Commitment Termination
                  Date.

              


      


    
       

      
        
          
            
              
                	
                        6

                      	
                        
                          
                            
                              Prepayment

                            

                          

                        

                      


              

               

            

          

        

      

    

    
      	 	
              6.1

            	
              Illegality
                If
                it becomes unlawful in any jurisdiction for a Lender to fund or maintain
                its Commitment as contemplated by this Agreement or to fund or maintain
                the Loan:

            


    

     

    
      	 	
              6.1.1

            	
              that
                Lender shall promptly notify the Agent of that event;
                

            


    

     


      
        	 	
                6.1.2

              	
                upon
                  the Agent notifying the Borrower, the
                  Commitment of that Lender (to the extent not already advanced)
                  will be
                  immediately cancelled;
                  and 

              


      


     

    
      
        
          \P1\3549672.7

        

      

      
        26

        
          

        

      

      
        
        

      

    


      
        	 	
                6.1.3

              	
                the
                  Borrower shall repay that Lender's Proportionate Share of any Drawing
                  on
                  the last day of its current Interest Period or, if earlier, the
                  date
                  specified by that Lender in the notice delivered to the Agent and
                  notified
                  by the Agent to the Borrower (being no earlier than the last day
                  of any
                  applicable grace period permitted by law) and the Maximum Amount
                  shall be
                  reduced by the amount of that Lender's Commitment in the Loan.
                  Prior to the date on which repayment is required to be made under
                  this
                  Clause 6.1.3 the affected Lender shall negotiate in good faith
                  with the
                  Borrower to find an alternative method or lending base in order
                  to
                  maintain the Facility.

              


      


     


      
        	 	
                6.2

              	
                Voluntary
                  prepayment of Loan
                  The Borrower may prepay the whole or any part of a Drawing (but,
                  if in
                  part, being an amount that reduces that Drawing by a minimum amount
                  of
                  five million Dollars ($5,000,000)) provided that
                  it
                  gives the Agent not less than three (3) Business Days' prior
                  notice.

              


      


     


      
        	 	
                6.3

              	
                Restrictions
                  Any
                  notice of prepayment given under this Clause 6 shall be irrevocable
                  and,
                  unless a contrary indication appears in this Agreement, shall specify
                  the
                  date or dates upon which the relevant prepayment is to be made
                  and the
                  amount of that prepayment.

              


      


     

    Any
      prepayment under this Agreement shall be made together with accrued interest
      on
      the amount prepaid and, subject to any Break Costs, without premium or penalty.
      

     

    If
      the
      Agent receives a notice under this Clause 6 it shall promptly forward a copy
      of
      that notice to the Borrower or the Lenders, as appropriate.

     

    
      	 	
              6.4

            	
              Mandatory
                Prepayment If
                at any time the Facility Outstandings shall exceed the Maximum Amount
                the
                Borrower shall immediately prepay to the Agent on behalf of the Lenders
                such amounts as will ensure that the Facility Outstandings do not
                exceed
                the Maximum Amount and shall pay to the Lenders all interest accrued
                on
                the amount prepaid up to and including the date on which such prepayment
                occurred.

            


    

    
      
         

        
          
            
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            27

            
              

            

          

          
            
            

          

        

        
          
            
              
                	
                        7

                      	
                        
                          
                            Interest 

                          

                        

                      


              

               

            

          

        

      

    


      
        	 	
                7.1

              	
                Interest
                  Periods
                  The period during which each Drawing shall be outstanding under
                  this
                  Agreement shall be an Interest Period of one, three or six months'
                  duration, as selected by the Borrower in the Drawdown Notice in
                  respect of
                  the Drawing in question, or such other duration as may be agreed
                  by the
                  Agent (acting on the instructions of all the Lenders).
                  Not more than five one (1) month Interest Periods may be selected
                  by the
                  Borrower in each twelve (12) month
                  period.

              


      


     


      
        	 	
                7.2

              	
                Beginning
                  and end of Interest Periods The
                  first Interest Period in respect of each Drawing shall begin on
                  the
                  Drawdown Date of that Drawing and shall end on the last day of
                  the
                  Interest Period selected in accordance with Clause 7.1. Any subsequent
                  Interest Period selected in respect of each Drawing shall commence
                  on the
                  day following the last day of its previous Interest Period and
                  shall end
                  on the last day of its current Interest Period selected in accordance
                  with
                  Clause 7.1. 

              


      


     


      
        	 	
                7.3

              	
                Interest
                  Periods to meet Maturity Date
                  If
                  an Interest Period for a Drawing would otherwise expire after the
                  Maturity
                  Date, the Interest Period for that Drawing shall expire on the
                  Maturity
                  Date.

              


      


     


      
        	 	
                7.4

              	
                Non-Business
                  Days
                  If
                  an Interest Period would otherwise end on a day which is not a
                  Business
                  Day, that Interest Period will instead end on the next Business
                  Day in
                  that calendar month (if there is one) or the preceding Business
                  Day (if
                  there is not).

              


      


     


      
        	 	
                7.5

              	
                Interest
                  rate
                  During each Interest Period interest shall accrue on the
                  relevant Drawing at
                  the rate determined by the Agent to
                  be

              


      


     

    
      
        	 	
                (i)

              	
                the
                  WSJ Prime Rate in the case of a Same Day
                  Drawing; or

              


      

      
         

        
          	 	
                  (ii) 

                	
                  in
                    all other cases the aggregate of (a) the Margin,
                    (b) LIBOR and (c) the Mandatory Cost, if
                    applicable.

                


        

         

      

    


      
        	 	
                7.6

              	
                Failure
                  to select Interest Period If
                  the Borrower at any time fails to select or agree an Interest Period
                  in
                  accordance with Clause 7.1,
                  the interest rate applicable shall be three (3)
                  months.

              


      


     

    
      
        
          \P1\3549672.7

        

      

      
        28

        
          

        

      

      
        
        

      

    


      
        	 	
                7.7

              	
                Accrual
                  and payment of interest Interest
                  shall accrue from day to day, shall be calculated on the basis
                  of a 360
                  day year and the actual number of days elapsed (or, in any circumstance
                  where market practice differs, in accordance with the prevailing
                  market
                  practice) and shall be paid by the Borrower to the Agent for the
                  account
                  of the Lenders on the last day of each Interest Period and, if
                  the
                  Interest Period is longer than three months, on the dates falling
                  at three
                  monthly intervals after the first day of that Interest
                  Period.

              


      


     

    
      
        
          
            	 	
                    7.8 

                  	Default interest If
                    the Borrower fails to pay any amount payable by it under a Finance
                    Document on its due date, interest shall accrue on the overdue
                    amount from
                    the due date, subject to any applicable grace period, up to the
                    date of
                    actual payment (both before and after judgment) at a rate which
                    is one
                    point five per cent (1.5%) higher than the rate which would have
                    been
                    payable if the overdue amount had, during the period of non-payment,
                    constituted a Drawing for successive Interest Periods, each selected
                    by
                    the Agent (acting reasonably). Any interest accruing under this
                    Clause
                    7.8
                    shall be immediately payable by the Borrower on demand by the
                    Agent. If
                    unpaid, any such interest will be compounded with the overdue
                    amount at
                    the end of each Interest Period applicable to that overdue amount
                    but will
                    remain immediately due and
                    payable.


          

           

        

      

    


      
        	 	
                7.9

              	
                Changes
                  in market circumstances If
                  at any time the Agent determines (which determination shall be
                  final and
                  conclusive and binding on the Borrower) that, by reason of changes
                  affecting the London interbank market, adequate and fair means
                  do not
                  exist for determining the rate of interest on a
                  Drawing
                  for any Interest Period:

              


      


     


      
        	 	
                7.9.1

              	
                the
                  Agent shall give notice to the Lenders and the Borrower of the
                  occurrence
                  of such event; and

              


      


     


      
        	 	
                7.9.2

              	
                the
                  rate of interest on each Lender's Commitment
                  in
                  the relevant Drawing
                  for that Interest Period shall be the rate per annum which is the
                  sum
                  of:

              


      


     

    
      	 	
              (a)

            	
              the
                Margin; and

            


    

     


      
        	 	
                (b)

              	
                the
                  rate notified to the Agent by that Lender as soon as practicable,
                  and in
                  any event before interest is due to be paid in respect of that
                  Interest
                  Period, to be that which expresses as a percentage rate per annum
                  the cost
                  to that Lender of funding its Commitment
                  in
                  the relevant Drawing
                  from whatever source it may reasonably select;
                  and

              


      


     

    
      
        
          \P1\3549672.7

        

      

      
        29

        
          

        

      

      
        
        

      

    


      
        	 	
                (c)

              	
                the
                  Mandatory Cost, if any, applicable to that Lender's Commitment,

              


      


     

    PROVIDED
      THAT if the resulting rate of interest on any Commitment is not acceptable
      to
      the Borrower:

     


      
        	 	
                7.9.3

              	
                the
                  Agent on behalf of the Lenders will negotiate with the Borrower
                  in good
                  faith with a view to modifying this Agreement to provide a substitute
                  basis for determining the rate of interest which is financially
                  a
                  substantial equivalent to the basis provided for in this
                  Agreement;

              


      


     


      
        	 	
                7.9.4

              	
                any
                  substitute basis agreed pursuant to Clause 7.9.3
                  shall be binding on all the parties to this Agreement and shall
                  apply to
                  all Commitments
                  in
                  the relevant Drawing;
                  and

              


      


     


      
        	 	
                7.9.5

              	
                if,
                  within thirty (30) days of the giving of the notice referred to
                  in Clause
                  7.9.1, the Borrower and the Agent fail to agree in writing on a
                  substitute
                  basis for determining the rate of interest in respect of the relevant
                  Drawing, the relevant Lender shall cease to be obliged to advance
                  its
                  Proportionate Share of that Drawing, but, if it has already been
                  advanced,
                  the Borrower will immediately prepay that Proportionate Share of
                  that
                  Drawing, together with any Break Costs, and the Maximum Amount
                  shall be
                  reduced by the amount of that Lender's Proportionate Share of that
                  Drawing.

              


      


     


      
        	 	
                7.10

              	
                Determinations
                  conclusive The
                  Agent shall promptly notify the Borrower of the determination of
                  a rate of
                  interest under this Clause 7 and each such determination shall
                  (save in
                  the case of manifest error) be final and
                  conclusive.

              


      


     

    
      
        
          
            
              
                
                  
                    	
                            8

                          	
                            
                              
                                
                                  Indemnities

                                

                              

                            

                          


                  

                   

                

              

            

          

        

      

    

    
      	 	
              8.1

            	
              Transaction
                expenses The
                Borrower will, within fourteen (14) days of the Agent's written demand,
                pay the Agent (for the account of the Finance Parties) the amount
                of all
                reasonable out of pocket costs and expenses (including legal fees
                and
                Value Added Tax or any similar or replacement tax if applicable)
                reasonably incurred by the Finance Parties or any of them in connection
                with:

            


    

     

    
      
        
          \P1\3549672.7

        

      

      
        30

        
          

        

      

      
        
        

      

    


      
        	 	
                8.1.1

              	
                the
                  negotiation, preparation, printing, execution and registration
                  of the
                  Finance Documents (whether or not any Finance Document is actually
                  executed or registered and whether or
                  not a
                  Drawing
                  is
                  advanced);
                  

              


      


     

    
      	 	
              8.1.2

            	
              any
                amendment, addendum or supplement to any Finance Document (whether
                or not
                completed); and

            


    

     

    
      	 	
              8.1.3

            	
              any
                other document which may at any time be required by a Finance Party
                to
                give effect to any Finance Document or which a Finance Party is entitled
                to call for or obtain under any Finance
                Document.

            


    

     


      
        	 	
                8.2

              	
                Funding
                  costs
                  The Borrower shall indemnify each Finance Party, by payment to
                  the Agent
                  (for the account of that Finance Party) on the Agent's written
                  demand,
                  against all losses and costs incurred or sustained by that Finance
                  Party
                  if, for any reason due to a default or other action by the
                  Borrower,
                  a
                  Drawing
                  is
                  not advanced
                  to the Borrower after the relevant Drawdown Notice has been given
                  to the
                  Agent, or is advanced on a date other than that requested in the
                  Drawdown
                  Notice.

              


      


     


      
        	 	
                8.3

              	
                Break
                  Costs
                  The Borrower shall indemnify each Finance Party, by payment to
                  the Agent
                  (for the account of that Finance Party) on the Agent's written
                  demand,
                  against all documented costs, losses, premiums or penalties incurred
                  by
                  that Finance Party as a result of its receiving any prepayment
                  of all or
                  any part of a
                  Drawing
                  (whether pursuant to Clause 6 or otherwise) on a day other than
                  the last
                  day of an Interest Period for that
                  Drawing,
                  or any other payment under or in relation to the Finance Documents
                  on a
                  day other than the due date for payment of the sum in question,
                  including
                  (without limitation) any losses or costs incurred in liquidating
                  or
                  re-employing deposits from third parties acquired to effect or
                  maintain
                  all or any part of a
                  Drawing,
                  and any liabilities, expenses or losses incurred by that Finance
                  Party in
                  terminating or reversing, or otherwise in connection with, any
                  interest
                  rate and/or currency swap, transaction or arrangement entered into
                  by that
                  Finance Party with any member of the Group to hedge any exposure
                  arising
                  under this Agreement, or in terminating or reversing, or otherwise
                  in
                  connection with, any open position arising under this
                  Agreement.

              


      


     

    
      
        
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        31

        
          

        

      

      
        
        

      

    

    
      	 	
              8.4

            	
              Currency
                indemnity In
                the event of a Finance Party receiving or recovering any amount payable
                under a Finance Document in a currency other than the Currency of
                Account,
                and if the amount received or recovered is insufficient when converted
                into the Currency of Account at the date of receipt to satisfy in
                full the
                amount due, the Borrower shall, on the Agent's written demand, pay
                to the
                Agent for the account of the relevant Finance Party such further
                amount in
                the Currency of Account as is sufficient to satisfy in full the amount
                due
                and that further amount shall be due to the Agent on behalf of the
                relevant Finance Party as a separate debt under this
                Agreement.

            


    

     

    
      	 	
              8.5

            	
              Increased
                costs (subject to Clause 8.6) If,
                by reason of the introduction of any law, or any change in any law,
                or any
                change in the interpretation or administration of any law, or compliance
                with any request or requirement from any central bank or any fiscal,
                monetary or other authority occurring after the date of this
                Agreement:

            


    

     

    
      	 	
              8.5.1

            	
              a
                Finance Party (or the holding company of a Finance Party) shall be
                subject
                to any Tax with respect to payment of all or any part of the Indebtedness
                (other than Tax on overall net income);
                or

            


    

     

    
      	 	
              8.5.2

            	
              the
                basis of Taxation of payments to a Finance Party in respect of all
                or any
                part of the Indebtedness shall be changed;
                or

            


    

     

    
      	 	
              8.5.3

            	
              any
                reserve requirements shall be imposed, modified or deemed applicable
                against assets held by or deposits in or for the account of or loans
                by
                any branch of a Finance Party; or

            


    

     

    
      	 	
              8.5.4

            	
              the
                manner in which a Finance Party allocates capital resources to its
                obligations under this Agreement or any ratio (whether cash, capital
                adequacy, liquidity or otherwise) which a Finance Party is required
                or
                requested to maintain shall be affected;
                or

            


    

     

    
      	 	
              8.5.5

            	
              there
                is imposed on a Finance Party (or on the holding company of a Finance
                Party) any other condition in relation to the Indebtedness or the
                Finance
                Documents; 

            


    

     

    
      
        
          \P1\3549672.7

        

      

      
        32

        
          

        

      

      
        
        

      

    


      and
        the
        result of any of the above shall be to increase the cost to a Finance Party
        (or
        to the holding company of a Finance Party) of that Finance Party making or
        maintaining its
        Commitment, or to cause a Finance Party to suffer (in its opinion) a material
        reduction in the rate of return on its overall capital below the level which
        it
        reasonably anticipated at the date of this Agreement and which it would have
        been able to achieve but for its entering into this Agreement and/or performing
        its obligations under this Agreement, then, subject to Clause 8.6, the Finance
        Party affected shall notify the Agent and the Borrower shall from time to
        time
        pay to the Agent on demand for the account of that Finance Party the amount
        which shall compensate that Finance Party (or the relevant holding company)
        for
        such additional cost or reduced return. A certificate signed by an authorised
        signatory of that Finance Party setting out the amount of that payment and
        the
        basis of its calculation shall be submitted to the Borrower and shall be
        conclusive evidence of such amount save for manifest error or on any question
        of
        law.


     

    
      	 	
              8.6

            	
              Exceptions
                to increased costs Clause
                8.5 does not apply to the extent any additional cost or reduced return
                referred to in that Clause is:

            


    

     

    
      
        	 	
                8.6.1

              	compensated for by a payment made under Clause
                8.10;
                or


      

       

      
        
          
            	 	
                    8.6.2 

                  	compensated for by a payment made under Clause
                    17.3;
                    or 


          

           

          
            
              
                	 	
                        8.6.3

                      	compensated for by the payment of the
                        Mandatory Cost;
                        or 


              

              
                 

              

            

          

        

      

    

    
      	 	
              8.6.4

            	
              attributable
                to the wilful breach by the relevant Finance Party (or the holding
                company
                of that Finance Party) of any law or
                regulation.

            


    

     

    
      	 	
              8.7

            	
              Events
                of Default The
                Borrower shall indemnify each Finance Party from time to time, by
                payment
                to the Agent (for the account of that Finance Party) on the Agent's
                written demand, against all losses and costs incurred or sustained
                by that
                Finance Party as a consequence of any Event of Default.
                

            


    

     

    
      	 	
              8.8

            	
              Enforcement
                costs
                The Borrower shall pay to the Agent (for the account of each Finance
                Party) on the Agent's written demand the amount of all costs and
                expenses
                (including legal fees) incurred by a Finance Party in connection
                with the
                enforcement of, or the preservation of any rights under, any Finance
                Document including (without limitation) any losses, costs and expenses
                which that Finance Party may from time to time sustain, incur or
                become
                liable for by reason of that Finance Party being mortgagee of a Vessel
                and/or a lender to the Borrower, or by reason of that Finance Party
                being
                deemed by any court or authority to be an operator or controller,
                or in
                any way concerned in the operation or control, of a Vessel. No such
                indemnity will be given where any such loss or cost has occurred
                due to
                gross negligence or wilful misconduct on the part of that Finance
                Party;
                however, this shall not effect the right of any other Finance Party
                to
                receive such indemnity.

            


    

     

    
      
        
          \P1\3549672.7

        

      

      
        33

        
          

        

      

      
        
        

      

    

    
      	 	
              8.9

            	
              Other
                costs
                The Borrower shall pay to the Agent (for the account of each Finance
                Party) on the Agent's written demand the amount of all sums which
                a
                Finance Party may pay or become actually or contingently liable for
                on
                account of the Borrower in connection with a Vessel (whether alone
                or
                jointly or jointly and severally with any other person) including
                (without
                limitation) all sums which that Finance Party may pay or guarantees
                which
                it may give in respect of the Insurances, any expenses incurred by
                that
                Finance Party in connection with the maintenance or repair of a Vessel
                or
                in discharging any lien, bond or other claim relating in any way
                to a
                Vessel, and any sums which that Finance Party may pay or guarantees
                which
                it may give to procure the release of a Vessel from arrest or
                detention.

            


    

     

    
      	 	
              8.10

            	
              Taxes
                The
                Borrower shall pay all Taxes to which all or any part of the Indebtedness
                or any Finance Document may be at any time subject (other than Tax
                on a
                Finance Party's overall net income) and shall indemnify the Finance
                Parties, by payment to the Agent (for the account of the Finance
                Parties)
                on the Agent's written demand, against all liabilities, costs, claims
                and
                expenses resulting from any omission to pay or delay in paying any
                such
                Taxes.

            


    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              9

                            	
                              
                                
                                  
                                    
                                      Fees

                                    

                                  

                                

                              

                            


                    

                     

                  

                

              

            

          

        

      

    


      
        	 	
                9.1

              	
                Commitment
                  fee
                  The Borrower shall pay to the Agent (for the account of the Lenders
                  in
                  proportion to their Commitments) a fee computed at the rate of
                  thirty two
                  point five per cent (32.5%) of the Margin on the undrawn and uncancelled
                  amount of the Maximum Amount from time to time from the date of
                  this
                  Agreement until the Commitment Termination Date. The accrued commitment
                  fee is payable on the last day of each successive period of three
                  months
                  from the Execution Date and on the Commitment Termination
                  Date.

              


      


     


      
        	 	
                9.2

              	
                Other
                  fees
                  The Borrower shall pay to the Agent the fees
                  in
                  the amount and at the times agreed in a Fee
                  Letter.

              


      


     

    
      
        
          \P1\3549672.7

        

      

      
        34

        
          

        

      

      
        
        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                10

                              	
                                
                                  
                                    
                                      
                                        
                                          Security
                                            and Application of
                                            Moneys

                                        

                                      

                                    

                                  

                                

                              


                      

                       

                    

                  

                

              

            

          

        

      

    

    
      	 	
              10.1

            	
              Security
                Documents
                As
                security for the payment of the Indebtedness, the Borrower shall
                execute
                and deliver to the Security Agent or cause to be executed and delivered
                to
                the Security Agent the following documents in such forms and containing
                such terms and conditions as the Security Agent shall
                require:

            


    

     

    
      	 	
              10.1.1

            	
              a
                first priority statutory mortgage over each of the Vessels together
                with a
                collateral deed of covenants;

            


    

     

    
      	 	
              10.1.2

            	
              a
                first priority deed or deeds of assignment of the Insurances, Earnings,
                Charter Rights (if applicable)
                and Requisition Compensation of each of the Vessels, and of the benefit
                of
                any relevant Charterer's Assignment;
                and

            


    

     

    
      	 	
              10.1.3

            	
              an
                on demand guarantee and indemnity from the
                Guarantor;

            


    

     

    
      	 	
              10.2

            	
              Remittance
                of Earnings Immediately
                upon the occurrence of an Event of Default the Borrower shall procure
                that
                all Earnings are paid to such account(s) as the Agent shall from
                time to
                time specify by notice in writing to the
                Borrower.

            


    

     

    
      	 	
              10.3

            	
              General
                application of moneys
                Whilst an Event of Default is continuing unremedied and unwaived
                the
                Borrower irrevocably authorises the Agent and the Security Agent
                to apply
                all sums which either of them may
                receive:

            


    

     

    
      	 	
              10.3.1

            	
              pursuant
                to a sale or other disposition of a Vessel or any right, title or
                interest
                in the Vessel; or

            


    

     

    
      	 	
              10.3.2

            	
              by
                way of payment of any sum in respect of the Insurances, Earnings,
                Charter
                Rights or Requisition Compensation;
                or

            


    

     

    
      	 	
              10.3.3

            	
              otherwise
                arising under or in connection with any Security
                Document,

            


    

     

    in
      accordance with Clause 3.4.3 or Clause 3.4.4 (if relevant) or
      otherwise in or towards satisfaction, or by way of retention on account, of
      the
      Indebtedness, as follows:-

    
       

      
        	 	
                (i)

              	first in payment of all outstanding fees and expenses
                of
                the Agent and the Security Agent;


      

       

      
        
          
            \P1\3549672.7

          

        

        
          35

          
            

          

        

        
          
          

        

      

      
        
          	 	(ii)	secondly in or towards payment of all outstanding
                  interest hereunder;


        

        
           

          
            
              	 	
                      
                        (iii)

                      

                    	
                      thirdly
                        in or towards payment of all outstanding principal
                        hereunder;

                    


            

            
               

              
                	 	(iv)	
                        fourthly
                          in or towards payment of all other
                          Indebtedness hereunder;

                      


              

               

              
                
                  
                    	 	 (v) 	
                            fifthly
                              the balance, if any, shall be remitted
                              to the Borrower or whoever may be entitled
                              thereto.

                          


                  

                              

                

              

            

          

        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  11

                                	
                                  
                                    
                                      
                                        
                                          
                                            
                                              Representations
                                                and
                                                Warranties

                                            

                                          

                                        

                                      

                                    

                                  

                                


                        

                         

                      

                    

                  

                

              

            

          

        

      

    

    The
      Borrower represents and warrants to each of the Finance Parties at the Execution
      Date and (by reference to the facts and circumstances then pertaining) at the
      date of each Drawdown Notice, at each Drawdown Date and at each Interest Payment
      Date as follows (except that the representation and warranty contained at Clause
      11.6 shall only be made on the First Drawdown Date and that the representations
      and warranties contained at Clause 11.2 and 11.21 shall only be made on the
      Execution Date) :-

     

    
      	 	
              11.1

            	
              Status
                and Due Authorisation Each
                of the Security Parties is a corporation or limited partnership duly
                incorporated or formed under the laws of its jurisdiction of
                incorporation, organisation or formation (as the case may be) with
                power
                to enter into the Security Documents and to exercise its rights and
                perform its obligations under the Security Documents and all corporate
                and
                other action required to authorise its execution of the Security
                Documents
                and its performance of its obligations thereunder has been duly
                taken.

            


    

     

    
      	 	
              11.2

            	
              No
                Deductions or Withholding
                Under the laws of the Security Parties' respective jurisdictions
                of
                incorporation or formation in force at the date hereof, none of the
                Security Parties will be required to make any deduction or withholding
                from any payment it may make under any of the Security
                Documents.

            


    

     

    
      	 	
              11.3

            	
              Claims
                Pari Passu
                Under the laws of the Security Parties' respective jurisdictions
                of
                incorporation or formation in force at the date hereof, the Indebtedness
                will, to the extent that it exceeds the realised value of any security
                granted in respect of the Indebtedness, rank at least pari
                passu
                with all the Security Parties' other unsecured indebtedness save
                that
                which is preferred solely by any bankruptcy, insolvency or other
                similar
                laws of general application.

            


    

     

    
      
        
          \P1\3549672.7

        

      

      
        36

        
          

        

      

      
        
        

      

    

    
      	 	
              11.4

            	
              No
                Immunity
                In
                any proceedings taken in any of the Security Parties' respective
                jurisdictions of incorporation or formation in relation to any of
                the
                Security Documents, none of the Security Parties will be entitled
                to claim
                for itself or any of its assets immunity from suit, execution, attachment
                or other legal process.

            


    

     

    
      	 	
              11.5

            	
              Governing
                Law and Judgments
                In
                any proceedings taken in any of the Security Parties' jurisdiction
                of
                incorporation or formation in relation to any of the Security 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.

            


    

     

    
      	 	
              11.6

            	
              Validity
                and Admissibility in Evidence
                As
                at the date hereof, all acts, conditions and things required to be
                done,
                fulfilled and performed in order (a) to enable each of the Security
                Parties lawfully to enter into, exercise its rights under and perform
                and
                comply with the obligations expressed to be assumed by it in the
                Security
                Documents, (b) to ensure that the obligations expressed to be assumed
                by
                each of the Security Parties in the Security Documents are legal,
                valid
                and binding and (c) to make the Security Documents admissible in
                evidence
                in the jurisdictions of incorporation or formation of each of the
                Security
                Parties, have been done, fulfilled and
                performed.

            


    

     

    
      	 	
              11.7

            	
              No
                Filing or Stamp Taxes Under
                the laws of the Security Parties' respective jurisdictions of
                incorporation or formation in force at the date hereof, it is not
                necessary that any of the Security Documents be filed, recorded or
                enrolled with any court or other authority in its jurisdiction of
                incorporation or formation (other than the Registrar of Companies
                for
                England and Wales or the relevant maritime registry, to the extent
                applicable) or that any stamp, registration or similar tax be paid
                on or
                in relation to any of the Security
                Documents.

            


    

     

    
      	 	
              11.8

            	
              Binding
                Obligations
                The obligations expressed to be assumed by each of the Security Parties
                in
                the Security Documents are legal and valid obligations, binding on
                each of
                them in accordance with the terms of the Security Documents and no
                limit
                on any of their powers will be exceeded as a result of the borrowings,
                granting of security or giving of guarantees contemplated by the
                Security
                Documents or the performance by any of them of any of their obligations
                thereunder.

            


    

     

    
      
        
          \P1\3549672.7

        

      

      
        37

        
          

        

      

      
        
        

      

    

    
      	 	
              11.9

            	
              No
                Winding-up Neither
                the Borrower, the Guarantor nor any Material Subsidiary have taken
                any
                corporate or limited partnership action nor have any other steps
                been
                taken or legal proceedings been started or (to the best of the Borrower's
                knowledge and belief) threatened against the Borrower, the Guarantor
                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 taken as a
                whole.

            


    

     

    
      	 	
              11.10

            	
              Solvency

            


    

     

    
      
        
          	 	
                  
                    11.10.1

                  

                	
                  Neither
                    the Borrower, the Guarantor nor the Group taken as a whole 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.

                


        

         

      

      
        	 	
                11.10.2

              	Neither the Borrower, the Guarantor 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.


      

       

      
        
          	 	
                  11.10.3

                	The value of the assets of each of the Borrower,
                  the
                  Guarantor and the Group taken as a whole is not less than the liabilities
                  of such entity or the Group taken as a whole (as the case may be)
                  (taking
                  into account contingent and prospective
                  liabilities).


        

        
           

          
            
              	 	
                      11.10.4

                    	No moratorium has been, or may, in the reasonably
                      foreseeable future be, declared in respet of any indebtedness
                      of the
                      Borrower, the Guarantor or any Material Subsidiary.



            

             

          

        

      

    

    
      	 	
              11.11

            	
              No
                Material Defaults

            


    

     

    
      
        
          	 	
                  11.11.1

                	Without prejudice to Clause 11.11.2, neither
                  the
                  Borrower, the Guarantor 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 taken as a whole.


        

        
          
             

            
              
                
                  \P1\3549672.7

                

              

              
                38

                
                  

                

              

              
                
                

              

            

            
              
                
                  	 	
                          11.11.2

                        	No Event of Default is continuing or might
                          reasonably be expected to result from the advance of any
                          Drawing.


                

                
                   

                

              

            

          

        

      

    

    
      	 	
              11.12

            	
              No
                Material Proceedings
                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 taken as a whole has been started or is reasonably likely to
                be
                started.

            


    

     

    
      	 	
              11.13

            	
              Borrower's
                Accounts All
                financial statements relating to the Group required to be delivered
                under
                Clause 12.1, were each prepared in accordance with GAAP, 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 accounts) the financial condition of the Group at the date
                as of
                which they were prepared and the results of the Group’s operations during
                the financial period then ended.

            


    

     

    
      
        	 	
                11.14 

              	
                No
                  Material Adverse Change 
                  Since the publication of the last financial statements relating
                  to the
                  Group delivered pursuant to Clause 12.1, there has been no change
                  that has
                  a Material Adverse Effect. 

              


      

       

    

    
      	 	
              11.15

            	
              No
                Undisclosed Liabilities
                As
                at the date to which the Borrower's Accounts were prepared neither
                the
                Borrower, the Guarantor 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.

            


    

     

    
      	 	
              11.16

            	
              No
                Obligation to Create Security The
                execution of the Security Documents by the Security Parties and their
                exercise of their rights and performance of their obligations thereunder
                will not result in the existence of nor oblige the Borrower or the
                Guarantor to create any Encumbrance over all or any of their present
                or
                future revenues or assets, other than pursuant to the Security
                Documents.

            


    

     

    
      	 	
              11.17

            	
              No
                Breach The
                execution of the Security Documents by each of the Security Parties
                and
                their exercise of their rights and performance of their obligations
                under
                any of the Security Documents do not constitute and will not result
                in any
                breach of any agreement or treaty to which any of them is a
                party.

            


    

     

    
      
        
          \P1\3549672.7

        

      

      
        39

        
          

        

      

      
        
        

      

    

    
      	 	
              11.18

            	
              Security
                Each of the Security Parties 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.

            


    

     

    
      	 	
              11.19

            	
              Necessary
                Authorisations
                The Necessary Authorisations required by each Security Party, are
                in full
                force and effect, and each Security Party 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.

            


    

     

    
      
        
          	 	
                  11.20 

                	
                  Money
                    Laundering Any
                    amount borrowed hereunder, and the performance of the obligations
                    of the
                    Security Parties under the Security Documents, will be for the
                    account of
                    members of the Group and will not involve any breach by any of
                    them of any
                    law or regulatory measure relating to "money laundering" as defined
                    in
                    Article 1 of the Directive (91/308/EEC) of the Council of the
                    European
                    Communities. 

                


        

         

      

    

    
      	 	
              11.21

            	
              Disclosure
                of material facts The
                Borrower is not aware of any material facts or circumstances which
                have
                not been disclosed to the Agent and which might, if disclosed, have
                reasonably been expected to adversely affect the decision of a person
                considering whether or not to make loan facilities of the nature
                contemplated by this Agreement available to the
                Borrower.

            


    

     

    
      	 	
              11.22

            	
              Use
                of Facility
                The Facility will be used for the purposes specified in the
                Recital.

            


    

     

    
      	 	
              11.23

            	
              Representations
                Limited
                The representation and warranties of the Borrower in this Clause
                11 are
                subject to:

            


    

     

    
      
        	 	
                11.23.1

              	the principle that equitable remedies are remedies
                which
                may be granted or refused at the discretion of the
                court;


      

      
         

        
          	 	
                  11.23.2

                	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;


        

        
           

          
            
              
                \P1\3549672.7

              

            

            
              40

              
                

              

            

            
              
              

            

          

          
            	 	11.23.3	the time barring of claims under any applicable
                    limitation acts;


          

          
             

            
              	 	11.23.4	the possibility that a court may strike
                      out provisions
                      for a contract as being invalid for reasons of oppression,
                      undue influence
                      or similar; and


            

            
               

              
                	 	11.23.5	any other reservations or qualifications
                        of law expressed
                        in any legal opinions obtained by the Agent in connection
                        with the
                        Facility.


              

               

            

          

        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    12

                                  	
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  Undertakings
                                                    and
                                                    Covenants

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  


                          

                           

                        

                      

                    

                  

                

              

            

          

        

      

    

    The
      undertakings and covenants in this Clause 12 remain in force for the duration
      of
      the Facility Period.

    
       

      
        	 	
                12.1

              	
                General
                  Undertakings 

              


      

       

    

    
      	 	
              12.1.1

            	
              Financial
                statements The
                Borrower shall supply to the Agent as soon as the same become available,
                but in any event within one hundred and fifty (150) days after the
                end of
                each of its financial years, its audited consolidated financial statements
                for that financial year, together with a Compliance Certificate,
                signed by
                a duly authorised representative of the Borrower, setting out computations
                as to compliance with Clause 12.2 as at the date as at which those
                financial statements were drawn up.

            


    

     

    
      	 	
              12.1.2

            	
              Requirements
                as to financial statements Each
                set of financial statements delivered by the Borrower under Clause
                12.1.1:

            


    

     

    
      	 	
              (a)

            	
              shall
                be certified by an authorised signatory of the Borrower as fairly
                representing its financial condition as at the date as at which those
                financial statements were drawn up;
                and

            


    

    
       

      
        	 	
                (b)

              	
                shall
                  be prepared in accordance with
                  GAAP.

              


      

       

    

    
      	 	
              12.1.3

            	
              Interim
                financial statements
                The Borrower shall supply to the Agent as soon as the same become
                available, but in any event within ninety (90) days after the end
                of each
                quarter during each of its financial years, its unaudited consolidated
                quarterly financial statements for that quarter together with a Compliance
                Certificate, signed by a duly authorised representative of the Borrower,
                setting out computations as to compliance with Clause 12.2 as at
                the date
                such financial statements were drawn
                up.

            


    

     

    
      
        
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        41

        
          

        

      

      
        
        

      

    

    
      	 	
              12.1.4

            	
              Maintenance
                of Legal Validity
                The Borrower 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 formation and all other applicable
                jurisdictions, to enable it lawfully to enter into and perform its
                obligations under the Security Documents and to ensure the legality,
                validity, enforceability or admissibility in evidence of the Security
                Documents in its jurisdiction of incorporation or organisation and
                all
                other applicable jurisdictions.

            


    

     

    
      	 	
              12.1.5

            	
              Notification
                of Default
                The Borrower shall promptly, upon becoming aware of the same, inform
                the
                Agent in writing of the occurrence of any Event of Default and, upon
                receipt of a written request to that effect from the Agent, confirm
                to the
                Agent that, save as previously notified to the Agent or as notified
                in
                such confirmation, no Event of Default has
                occurred.

            


    

     

    
      	 	
              12.1.6

            	
              Claims
                Pari Passu
                The Borrower shall ensure that at all times the claims of the Finance
                Parties against it under the Security Documents rank at least pari
                passu
                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.

            


    

     

    
      	 	
              12.1.7

            	
              Management
                of Vessels
                The Borrower shall procure that the Owner shall ensure that each
                of the
                Vessels is at all times technically and commercially managed by a
                management company controlled by Teekay Shipping Corporation or the
                Borrower or such other management company as may be acceptable to
                the
                Agent acting on the instructions of the Majority
                Lenders.

            


    

     

    
      	 	
              12.1.8

            	
              Classification
                The Borrower shall procure that the Owner shall ensure that each
                of the
                Vessels maintains the highest classification required for the purpose
                of
                the relevant trade of such Vessel which shall be with a Pre-Approved
                Classification Society, in each case, free from any overdue
                recommendations and conditions affecting that Vessel’s
                class.

            


    

     

    
      
        
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        42

        
          

        

      

      
        
        

      

    

    
      	 	
              12.1.9

            	
              Certificate
                of Financial Responsibility
                The Borrower shall procure that the Owner shall obtain and maintain
                a
                certificate of financial responsibility in relation to any Vessel
                which is
                to call at the United States of
                America.

            


    

     

    
      
        	 	
                12.1.10

              	Negative Pledge
                The Borrower shall procure that the Owner does not create, or permit
                to
                subsist, any Encumbrance (other than pursuant to the Security Documents)
                over all or any part of the Vessels or the Insurances other than
                a
                Permitted Encumbrance.


      

       

    

    
      	 	
              12.1.11

            	
              Registration
                The Borrower shall procure that for the duration of the Facility
                Period
                the Owner shall not change or permit a change to the flag of the
                Vessels
                other than to a Pre-Approved Flag or under such other flag as may
                be
                approved by the Agent acting on the instructions of the Majority
                Lenders,
                such approval not to be unreasonably withheld or
                delayed.

            


    

     

    
      	 	
              12.1.12

            	
              ISM
                and ISPS Compliance
                The Borrower shall procure that the Owner shall ensure that the relevant
                Company complies in all material respects with the ISM Code and the
                ISPS
                Code or any replacements thereof and in particular (without prejudice
                to
                the generality of the foregoing) shall procure that the Owner shall
                ensure
                that the Company holds (i) a valid and current Document of Compliance
                issued pursuant to the ISM Code, (ii) a valid and current SMC issued
                in
                respect of each Vessel pursuant to the ISM Code, and (iii) an ISSC
                in
                respect of each Vessel, and the Borrower shall promptly, upon request,
                supply the Agent with copies of the
                same.

            


    

     

    
      	 	
              12.1.13

            	
              Necessary
                Authorisations
                Without prejudice to Clause 12.1.12 or any other specific provision
                of the
                Security Documents relating to an Authorisation, the Borrower shall
                (i)
                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 (ii) promptly upon request,
                supply
                certified copies to the Agent of all Necessary Authorisations.
                

            


    

     

    
      
        
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              12.1.14

            	
              Compliance
                with Applicable Laws
                The Borrower 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.

            


    

     

    
      
        
          	 	
                  12.1.15

                	
                  Loans
                    and Guarantees
                    The Borrower shall be permitted to make loans and grant credit
                    upon such
                    terms as it may determine to any other member of the Group or
                    to any of
                    the Borrower's shareholders or unitholders and may otherwise
                    give any
                    guarantee or indemnity to procure financing for other members
                    of the
                    Group, but shall not otherwise make any loans or grant any credit
                    (save in
                    the ordinary course of business) or give any guarantee or indemnity
                    (except pursuant to the Security Documents); Provided that the
                    Borrower
                    shall not make any such loans following the occurrence of an
                    Event of
                    Default which is continuing unremedied or unwaived.
                    

                


        

         

      

    

    
      	 	
              12.1.16

            	
              Further
                Assurance
                The Borrower shall at its own expense, promptly take all such action
                as
                the Agent may reasonably require for the purpose of perfecting or
                protecting any Finance Party’s rights with respect to the security created
                or evidenced (or intended to be created or evidenced) by the Security
                Documents.

            


    

     

    
      	 	
              12.1.17

            	
              Other
                information
                The Borrower will promptly supply to the Agent such information and
                explanations as the Majority Lenders may from time to time reasonably
                require in connection with the operation of the Vessels and any reasonable
                financial information in connection with the Borrower, and will procure
                that the Agent be given the like information and explanations relating
                to
                all other Security Parties.

            


    

     

    
      	 	
              12.1.18

            	
              Inspection
                of records
                The Borrower will permit the inspection of its financial records
                and
                accounts on reasonable notice from time to time during business hours
                by
                the Agent or its nominee. 

            


    

     

    
      	 	
              12.1.19

            	
              Valuations
                The Borrower will deliver to the Agent a Valuation of each of the
                Vessels
                (i) on the due date for delivery of the annual Borrower's Accounts
                pursuant to Clause 12.1 (ii) on a sale or Total Loss of any Vessel
                to
                determine the Relevant Reduction Amount for the purposes of clauses
                3.4.3
                and 3.4.4 respectively and (iii) following the occurrence of an Event
                of
                Default which is continuing unremedied and unwaived on such other
                occasions as the Agent may request.

            


    

     

    
      
        
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              12.1.20

            	
              Insurance
                The
                Borrower shall procure that the Owner shall ensure at its own expense
                throughout the Facility Period that the Vessels are insured and operated
                in accordance with the provisions set out in the relevant Security
                Documents.

            


    

     

    
      	 	
              12.1.21

            	
              Change
                of Control
                The Borrower shall procure that throughout the Facility
                Period:

            


    

     

    
      	 	
              (a)

            	
              Teekay
                Shipping Corporation owns a minimum of fifty one percent (51%) of
                the
                voting rights in Teekay Offshore GP L.L.C, the general partner in
                the
                MLP;

            


    

     

    
      	 	
              (b)

            	
              Teekay
                Shipping Corporation or the MLP owns a minimum of fifty one percent
                (51%)
                of the voting rights in Teekay Offshore Operating GP L.L.C., the
                general
                partner in the Borrower;

            


    

     

    
      	 	
              (c)

            	
              there
                is no change in the legal or beneficial ownership of the Guarantor
                from
                that advised to the Agent at the date of this Agreement without the
                Agent's prior written consent provided that the Agent's consent shall
                not
                be required if the change of Guarantor shareholding arises from a
                corporate reorganisation of the Group and the legal and beneficial
                ownership of the Guarantor remains wholly owned within the Group
                following
                such re-organisation.

            


    

    
       

      
        	 	
                12.1.22

              	
                "Know
                  your customer" checks If:

              


      

       

    

    
      	 	
              (a)

            	
              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;

            


    

     

    
      	 	
              (b)

            	
              any
                change in the status of the Borrower after the date of this Agreement;
                or

            


    

     

    
      
        
          \P1\3549672.7

        

      

      
        45

        
          

        

      

      
        
        

      

    

    
      	 	
              (c)

            	
              a
                proposed assignment or transfer by a Lender of any of its rights
                and
                obligations under this Agreement to a party that is not a Lender
                prior to
                such assignment or transfer,

            


    

     

    obliges
      the Agent or any Lender (or, in the case of (c) above, any prospective new
      Lender) to comply with "know your customer" or similar identification procedures
      in circumstances where the necessary information is not already available to
      it,
      the Borrower shall promptly upon the request of the Agent or any Lender supply,
      or procure the supply of, such documentation and other evidence as is reasonably
      requested by the Agent (for itself or on behalf of any Lender) or any Lender
      for
      itself (or, in the case of (c) above, on behalf of any prospective new Lender)
      in order for the Agent or that Lender (or, in the case of (c) above, any
      prospective new Lender) to carry out and be satisfied it has complied with
      all
      necessary "know your customer" or other similar checks under all applicable
      laws
      and regulations pursuant to the transactions contemplated in the Finance
      Documents.

     

    
      	 	
              12.1.23

            	
              Intercompany
                borrowings
                The Borrower will only borrow from other members of the Group on
                a
                subordinated and unsecured basis.

            


    

     

    
      	 	
              12.2

            	
              Financial
                covenants

            


    

     

    Throughout
      the Facility Period the Group shall:-

    
       

      
        	 	
                12.2.1

              	maintain a Free Liquidity together with undrawn
                committed
                revolving credit lines available to the Group (including under this
                Agreement but excluding undrawn committed revolving credit lines
                with less
                than six (6) months to maturity) of not less than seventy five million
                Dollars ($75,000,000); and


      

      
         

        
          	 	
                  12.2.2

                	ensure that the aggregate of the Free Liquidity
                  and
                  undrawn committed revolving credit lines available to be drawn
                  by members
                  of the Group (including under this Agreement, but excluding undrawn
                  committed revolving credit lines with less than six (6) months
                  to
                  maturity) will not be less than five per cent (5%) of the Total
                  Debt of
                  the Group.


        

         

        
          
            
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            46

            
              

            

          

          
            
            

          

        

      

    

    PROVIDED
      THAT following any change in the applicable accounting policies for the Borrower
      from GAAP the Agent (acting on the instructions of the Majority Lenders and
      in
      consultation with the Borrower) may require an amendment to this Clause 12.2
      as
      the Agent deems logical and necessary having regard to the nature of such
      changes in policy and the intended substance of this Clause 12.2.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      13

                                    	
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      Events
                                                        of
                                                        Default

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    


                            

                             

                            
                              
                                
                                  	 	
                                          
                                            13.1

                                          

                                        	
                                          
                                            Events
                                              of Default
                                              Each of the events or circumstances
                                              set out in this Clause 13.1 is an
                                              Event of Default.

                                          

                                        


                                

                                 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        	 	
                
                  13.1.1

                

              	
                Borrower's Failure
                  to Pay under this Agreement The
                  Borrower 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 the Borrower can demonstrate
                  to the
                  reasonable satisfaction of the Agent that all necessary instructions
                  were
                  given 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, within
                  three
                  (3) Business Days of the date on which it actually fell due under
                  this
                  Agreement (if a payment of principal), five (5) Business Days (if
                  a
                  payment of interest) or ten (10) Business Days (if a sum payable
                  on
                  demand); or

              


      

      
         

        
          	 	
                  13.1.2

                	
                  Misrepresentation
                    Any
                    representation or statement made by any Security Party in any
                    Security
                    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 in
                    any
                    material respect, where the circumstances causing the same give
                    rise to a
                    Material Adverse Effect; or 

                


        

        
           

          
            	 	
                    13.1.3

                  	
                    
                      Specific
                        Covenants A
                        Security Party fails duly to perform or comply with any of
                        the obligations
                        expressed to be assumed by or procured by the Borrower under
                        Clauses
                        12.1.4, 12.1.6, 12.1.10 or 12.1.21; or


                    

                  


          

          
             

            
              
                
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                47

                
                  

                

              

              
                
                

              

            

            
              	 	
                      13.1.4

                    	
                      
                        Financial
                          Covenants The
                          Borrower is in breach of the Borrower's financial covenants
                          set out in
                          Clause 12.2 at any time; or

                      

                    


            

            
               

              
                	 	
                        13.1.5

                      	
                        
                          Other
                            Obligations A
                            Security Party fails duly to perform or comply with any
                            of the obligations
                            expressed to be assumed by it in any Security Document
                            (other than those
                            referred to in Clause 13.1.3 or Clause 13.1.4) and such
                            failure is not
                            remedied within 30 days after the Agent has given notice
                            thereof to the
                            Borrower; or

                        

                      


              

              
                
                   

                  
                    	 	
                            13.1.6

                          	
                            Cross
                              Default Any
                              indebtedness of any Security Party or any Material
                              Subsidiary is not paid
                              when due (or within any applicable grace period) or
                              any indebtedness of
                              any Security Party or any Material Subsidiary 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 (i) of the Borrower is equal to or greater
                              than fifty million
                              Dollars ($50,000,000) or its equivalent in any other
                              currency; or (ii) of
                              the Guarantor, or any Material Subsidiary is equal
                              to or greater than
                              twenty five million Dollars ($25,000,000) or its equivalent
                              in any other
                              currency; or

                          


                  

                  
                    
                       

                      
                        	 	
                                13.1.7

                              	
                                Insolvency
                                  and Rescheduling A
                                  Security Party or a Material Subsidiary 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;
                                  or

                              


                      

                      
                        
                           

                          
                            	 	
                                    13.1.8

                                  	
                                    
                                      Winding-up
                                        A
                                        Security Party or a Material Subsidiary 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; or

                                    

                                  


                          

                          
                            
                              
                                 

                                
                                  
                                    
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                                    48

                                    
                                      

                                    

                                  

                                  
                                    
                                    

                                  

                                

                                
                                  	 	
                                          13.1.9

                                        	
                                          
                                            Execution
                                              or Distress

                                          

                                        


                                

                                 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        	 	
                (a)

              	
                Any
                  Security Party or a Material Subsidiary 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 (i) in
                  respect
                  of the Borrower equal to or greater than fifty million Dollars
                  ($50,000,000) or its equivalent in any other currency; or (ii)
                  in respect
                  of the Guarantor or a Material Subsidiary equal to or greater than
                  twenty
                  five million Dollars ($25,000,000) 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. 

              


      

      
         

        
          
            	 	
                    (b)

                  	
                    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 a Security Party or a Material Subsidiary in an aggregate
                      amount
                      (i) in respect of the Borrower equal to or greater than fifty
                      million
                      Dollars ($50,000,000) or its equivalent in any other currency;
                      or (ii) in
                      respect of the Guarantor or a Material Subsidiary equal to
                      or greater than
                      twenty five million Dollars ($25,000,000) 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.

                  


          

          
             

            
              
                	 	
                        (c)

                      	
                        Notwithstanding
                          the foregoing paragraphs of this Clause 13.1.9, any levy
                          of any distress
                          on or any arrest, condemnation, confiscation, requisition
                          for title or
                          use, compulsory acquisition, seizure, detention or forfeiture
                          of a Vessel
                          (or any part thereof) or any exercise or purported exercise
                          of any lien or
                          claim on or against a Vessel where the release of or discharge
                          the lien or
                          claim on or against such Vessel has not been procured within
                          30 days;
                          or

                      


              

               

              
                
                  
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                  49

                  
                    

                  

                

                
                  
                  

                

              

              
                
                  
                    	 	
                            13.1.10

                          	
                            
                              
                                Similar
                                  EventAny
                                  event occurs which, under the laws of any jurisdiction,
                                  has a similar or
                                  analogous effect to any of those events mentioned
                                  in Clauses 13.1.7,
                                  13.1.8 and 13.1.9; or

                              

                            

                          


                  

                   

                  
                    
                      
                        	 	
                                13.1.11

                              	
                                
                                  Insurances
                                    Insurance
                                    is not maintained in respect of any Vessel in
                                    accordance with the terms of
                                    the relevant Security Document in respect of
                                    that Vessel; or
                                    

                                

                              


                      

                      
                        
                           

                          
                            	 	
                                    13.1.12

                                  	
                                    
                                      
                                        Class
                                          A
                                          Vessel has its classification withdrawn
                                          by the relevant classification
                                          society PROVIDED THAT if such withdrawal
                                          is (in the opinion of the Agent
                                          in its absolute discretion) capable of
                                          remedy such Event of Default shall
                                          only occur if the Vessel's classification
                                          is not reinstated to the
                                          satisfaction of the Agent within twenty
                                          one (21) days;
                                          or

                                      

                                    

                                  


                          

                          
                            
                               

                              
                                	 	
                                        13.1.13

                                      	
                                        
                                          Environmental
                                            Matters

                                        

                                      


                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          	 	
                  (a)

                	
                  Any
                    Environmental Claim is pending or made against the Owner or any
                    of the
                    Owner's Environmental Affiliates or in connection with a Vessel,
                    where
                    such Environmental Claim has a Material Adverse Effect.
                    

                


        

        
           

          
            
              	 	
                      (b)

                    	
                      Any
                        actual Environmental Incident occurs in connection with a
                        Vessel, where
                        such Environmental Incident has a Material Adverse Effect;
                        or

                    


            

             

            
              
                
                  
                    	 	
                            13.1.14

                          	
                            
                              Repudiation
                                Any
                                Security Party repudiates any Security 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 Security Document;
                                or

                            

                          


                  

                

              

               

              
                
                  
                    
                      	 	
                              13.1.15

                            	
                              
                                
                                  Validity
                                    and Admissibility At
                                    any time any act, condition or thing required
                                    to be done, fulfilled or
                                    performed in
                                    order:

                                

                              

                            


                    

                  

                

              

            

          

        

      

    

    
       

      
        
          
            	 	
                    (a)

                  	
                    to
                      enable any Security Party lawfully to enter into, exercise
                      its rights
                      under and perform the respective obligations expressed to be
                      assumed by it
                      in the Security Documents;

                  


          

          
            
               

              
                
                  
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                  50

                  
                    

                  

                

                
                  
                  

                

              

              
                
                  
                    	 	
                            (b)

                          	
                            to
                              ensure that the obligations expressed to be assumed
                              by each of the
                              Security Parties in the Security Documents are legal,
                              valid and binding;
                              or

                          


                  

                  
                    
                       

                      
                        
                          
                            	 	
                                    (c)

                                  	
                                    to
                                      make the Security Documents admissible in evidence
                                      in any applicable
                                      jurisdiction

                                  


                          

                           

                          
                            is
                              not
                              done, fulfilled or performed within 30 days after notification
                              from the Agent to
                              the relevant Security Party requiring the same to be
                              done, fulfilled or
                              performed;
                              or

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              	 	
                      
                        13.1.16

                      

                    	
                      
                        
                          Illegality
                            At
                            any time it is or becomes unlawful for any Security Party
                            to perform or
                            comply with any or all of its obligations under the Security
                            Documents to
                            which it is a party or any of the obligations of the
                            Borrower hereunder
                            are not or cease to be legal, valid and binding and such
                            illegality is not
                            remedied or mitigated to the satisfaction of the Agent
                            within thirty (30)
                            days after it has given notice thereof to the relevant
                            Security Party;
                            or

                        

                      

                    


            

          

        

      

      
        
          
             

            
              
                
                  
                    
                      
                        
                          	 	
                                  13.1.17

                                	
                                  
                                    
                                      Material
                                        Advers Change At any time there shall occur a
                                        change in the
                                        business or operations of a Security Party
                                        or a change in the financial
                                        condition of any Security
                                        Party which, in the reasonable opinion of
                                        the Majority Lenders, materially
                                        impairs such Security Party's ability
                                        to discharge its obligations under the Security
Documents
                                        in the manner provided therein and such change,
                                        if capable of remedy, is
                                        not
                                        so remedied within 15 days of the delivery
                                        of a notice confirming such
                                        change
                                        by the Agent to the relevant Security
                                        Party; or                                 
                                        

                                    

                                  

                                


                        

                      

                    

                  

                  
                    
                       

                      
                        
                          
                            
                              	 	
                                      13.1.18

                                    	
                                      
                                        Qualifications
                                          of Financial
                                          Statements The
                                          auditors of the Group qualify their report
                                          on any audited consolidated
                                          financial statements of the Group in any
                                          regard which, in the reasonable
                                          opinion of the Agent, has a Material Adverse
                                          Effect;
                                          or

                                      

                                    


                            

                          

                        

                      

                      
                        
                           

                          
                            
                              
                                
                                  	 	
                                          13.1.19

                                        	
                                          
                                            
                                              Conditions
                                                Subsequent if
                                                any of the conditions set out in
                                                Clause 3.6 is not satisfied within
                                                thirty
                                                (30) days or such other time period
                                                specified by the Agent in its
                                                discretion;
                                                or

                                            

                                          

                                        


                                

                              

                            

                          

                          
                            
                               

                              
                                
                                  
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                                  51

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                              
                                
                                  
                                    
                                      	 	
                                              13.1.20

                                            	
                                              
                                                
                                                  Revocation
                                                    or Modification of consents etc.
if
                                                    any Necessary Authorisation which
                                                    is now or which at any time during
                                                    the
                                                    Facility Period becomes necessary
                                                    to enable any of the Security
                                                    Parties to
                                                    comply with any of their obligations
                                                    in or pursuant to any of the
                                                    Security
                                                    Documents is revoked, withdrawn
                                                    or withheld, or modified in a
                                                    manner which
                                                    the Agent reasonably considers
                                                    is, or may be, prejudicial to
                                                    the interests
                                                    of a Finance Party in a material
                                                    manner, or if such Necessary
                                                    Authorisation ceases to remain
                                                    in full force and effect;
                                                    or

                                                

                                              

                                            


                                    

                                  

                                

                              

                              
                                
                                   

                                  
                                    
                                      
                                        
                                          	 	
                                                  13.1.21

                                                	
                                                  
                                                    
                                                      Curtailment
                                                        of Business if
                                                        the business of any of the
                                                        Security Parties is wholly
                                                        or materially
                                                        curtailed by any intervention
                                                        by or under authority of
                                                        any government, or
                                                        if all or a substantial part
                                                        of the undertaking, property
                                                        or assets of any
                                                        of the Security Parties is
                                                        seized, nationalised, expropriated
                                                        or
                                                        compulsorily acquired by
                                                        or under authority of any
                                                        government or any
                                                        Security Party disposes or
                                                        threatens to dispose of a
                                                        substantial part of
                                                        its business or assets;
                                                        or

                                                    

                                                  

                                                


                                        

                                      

                                    

                                  

                                  
                                    
                                      
                                         

                                        
                                          
                                            
                                              
                                                	 	
                                                        13.1.22

                                                      	
                                                        
                                                          
                                                            Reduction
                                                              of Capital if
                                                              the Borrower reduces
                                                              its committed or subscribed
                                                              capital;
                                                              or

                                                          

                                                        

                                                      


                                              

                                            

                                          

                                        

                                        
                                          
                                            
                                               

                                              
                                                
                                                  
                                                    
                                                      	 	
                                                              13.1.23

                                                            	
                                                              Challenge
                                                                to Registration if
                                                                the registration
                                                                of any Vessel or
                                                                any Mortgage becomes
                                                                void or voidable
                                                                or
                                                                liable to cancellation
                                                                or termination;
                                                                or

                                                            


                                                    

                                                  

                                                

                                              

                                              
                                                 

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                        
                          
                            
                              
                                
                                  
                                    	 	
                                            13.1.24

                                          	
                                            War
                                              if
                                              the country of registration of any
                                              Vessel becomes involved in war (whether
                                              or not declared) or civil war or is
                                              occupied by any other power and the
                                              Agent reasonably considers that, as
                                              a result, the security conferred by
                                              the Security Documents is materially
                                              prejudiced;
                                              or

                                          


                                  

                                

                              

                            

                            
                              
                                
                                   

                                  
                                    
                                      
                                        
                                          	 	
                                                  13.1.25

                                                	
                                                  
                                                    
                                                      Notice
                                                        of Termination if
                                                        the Guarantor gives notice
                                                        to the Agent to determine
                                                        its obligations under
                                                        the
                                                        Guarantee.

                                                    

                                                  

                                                


                                        

                                      

                                    

                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    


      
        	 	
                13.2

              	
                Acceleration
                  If
                  an Event
                  of Default is continuing unremedied or unwaived the Agent may (with
                  the
                  consent of the Majority Lenders) and shall (at the request of the
                  Majority
                  Lenders) by notice to the Borrower
                  cancel any part of the Maximum Amount not then advanced and:

              


      


     

    
      
        
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              13.2.1

            	
              declare
                that the Loan,
                together with accrued interest, and all other amounts accrued or
                outstanding under the Finance Documents are immediately due and payable,
                whereupon they shall become immediately due and payable;
                and/or

            


    

     


      
        	 	
                13.2.2

              	
                declare
                  that the Loan
                  is payable
                  on demand, whereupon it
                  shall immediately become payable on demand by the Agent;
                  and/or

              


      


     

    
      	 	
              13.2.3

            	
              declare
                the Commitments terminated and the Maximum Amount reduced to
                zero.

            


    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        14

                                      	
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          Assignment
                                                            and
                                                            Sub-Participation

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      


                              

                               

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    


      
        	 	
                14.1

              	
                Lenders'
                  rights A
                  Lender may assign any of its rights under this Agreement or transfer
                  by
                  novation any of its rights and obligations under this Agreement
                  to any
                  other branch or Affiliate of that
                  Lender or (subject to the prior written consent of the Borrower,
                  such
                  consent not to be unreasonably withheld but not to be required
                  at any time
                  after an Event of Default which is continuing unremedied and unwaived)
                  to
                  any other bank or financial institution, and may grant sub-participations
                  in all or any part of its
                  Commitment.

              


      


     

    
      	 	
              14.2

            	
              Borrower's
                co-operation The
                Borrower will co-operate fully with a Lender in connection with any
                assignment, transfer or sub-participation by that Lender; will execute
                and
                procure the execution of such documents as that Lender may require
                in that
                connection; and irrevocably authorises any Finance Party to disclose
                to
                any proposed assignee, transferee or sub-participant (whether before
                or
                after any assignment, transfer or sub-participation and whether or
                not any
                assignment, transfer or sub-participation shall take place) all
                information relating to the Security Parties, the Loan, the Relevant
                Documents and the Vessels which any Finance Party may in its discretion
                consider necessary or desirable (subject to any duties of confidentiality
                applicable to the Lenders generally). Additionally, (but subject
                to the
                same duties of confidentiality), any Lender may disclose the size
                and term
                of the Facility and the names of each Security Party to any investor
                or
                potential investor in a securitisation (or similar transaction of
                broadly
                equivalent economic effect) of that Lender's rights and obligations
                under
                the Finance Documents.

            


    

     

    
      
        
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              14.3

            	
              Rights
                of assignee Any
                assignee of a Lender shall (unless limited by the express terms of
                the
                assignment) take the full benefit of every provision of the Finance
                Documents benefitting that Lender PROVIDED THAT an assignment will
                only be
                effective on notification by the Agent to that Lender and the assignee
                that the Agent is satisfied it has complied with all necessary "Know
                your
                customer" or other similar checks under all applicable laws and
                regulations in relation to the assignment to the
                assignee.

            


    

     

    
      	 	
              14.4

            	
              Transfer
                Certificates If
                a Lender wishes to transfer any of its rights and obligations under
                or
                pursuant to this Agreement, it may do so by delivering to the Agent
                a duly
                completed Transfer Certificate, in which event on the Transfer
                Date:

            


    

     

    
      	 	
              14.4.1

            	
              to
                the extent that that Lender seeks to transfer its rights and obligations,
                the Borrower (on the one hand) and that Lender (on the other) shall
                be
                released from all further obligations towards the
                other;

            


    

     

    
      	 	
              14.4.2

            	
              the
                Borrower (on the one hand) and the transferee (on the other) shall
                assume
                obligations towards the other identical to those released pursuant
                to
                Clause 14.4.1; and

            


    

     

    
      	 	
              14.4.3

            	
              the
                Agent, each of the Lenders and the transferee shall have the same
                rights
                and obligations between themselves as they would have had if the
                transferee had been an original party to this Agreement as a
                Lender

            


    

     

    PROVIDED
      THAT the
      Agent
      shall only be obliged to execute a Transfer Certificate once:

     

    
      	 	
              (a)

            	
              it
                is satisfied it has complied with all necessary "know your customer"
                or
                other similar checks under all applicable laws and regulations in
                relation
                to the transfer to the transferee;
                and

            


    

     

    
      	 	
              (b)

            	
              the
                transferee has paid to the Agent for its own account a transfer fee
                of
                three thousand Dollars.

            


    

     

    The
      Agent
      shall, as soon as reasonably practicable after it has executed a Transfer
      Certificate, send to the Borrower a copy of that Transfer
      Certificate.

     

    
      
        
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        54

        
          

        

      

      
        
        

      

    

    
      	 	
              14.5

            	
              Finance
                Documents Unless
                otherwise expressly provided in any Finance Document or otherwise
                expressly agreed between a Lender and any proposed transferee and
                notified
                by that Lender to the Agent on or before the relevant Transfer Date,
                there
                shall automatically be assigned to the transferee with any transfer
                of a
                Lender's rights and obligations under or pursuant to this Agreement
                the
                rights of that Lender under or pursuant to the Finance Documents
                (other
                than this Agreement) which relate to the portion of that Lender's
                rights
                and obligations transferred by the relevant Transfer
                Certificate.

            


    

     

    
      	 	
              14.6

            	
              No
                assignment or transfer by the Borrower
                The Borrower may not assign any of its rights or transfer any of
                its
                rights or obligations under the Finance
                Documents.

            


    

     

    
      	 	
              14.7

            	
              Transfer
                of the Loan Agreement by KfW. Notwithstanding
                the provisions of Clause 14.1 KfW may transfer all its rights and
                obligations under this Agreement to a KfW Subsidiary with effect
                from
                1 January 2008 or any later date. By signing this Agreement the
                Borrower consents to such a transfer. KfW or the KfW Subsidiary will
                inform the Borrower of the date on which the transfer of KfW’s rights and
                obligations to the KfW Subsidiary takes effect. In this connection
                the
                following will apply:

            


    

     

    
      	 	
              14.7.1

            	
              Deductions
                and Increased costs. If,
                by reason of circumstances already existing at the transfer date,
                the
                Borrower would be obliged to make a payment to the KfW Subsidiary
                under
                Clauses 8.5, 17.2 or 17.3, it need pay the KfW Subsidiary only such
                an
                amount as it would have been obliged to pay KfW if the transfer had
                not
                occurred.

            


    

     

    
      	 	
              14.7.2

            	
              Costs.
                KfW
                will pay all costs incurred as a result of or in connection with
                such
                transfer.

            


    

     

    For
      the
      purposes of this Clause KfW Subsidiary means a company which within the meaning
      of section 15 ff. German Stock Corporation Act (Aktiengesetz)
      is
      directly or indirectly (i) majority owned (im
      Mehrheitsbesitz)
      by KfW
      or (ii) controlled (abh’ngig)
      by
      KfW.

     

    
      	 	
              14.8

            	
              Disclosure
                of information. In
                connection with any transfer under Clause 14.7 KfW
                may disclose confidential information to the KfW Subsidiary or its
                agents
                or its legal advisors.

            


    

     

    
      
        
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        55

        
          

        

      

      
        
        

      

    

    
      	 	
              14.9

            	
              Mitigation
                If
                a transfer is to take place under Clause 14.7 then, without in any
                way
                limiting the rights of KfW under Clauses 8.5, 17.2 or 17.3, KfW shall
                take
                reasonable steps to mitigate any circumstances which arise and which
                would
                result in any amount becoming payable under or pursuant to Clauses
                8.5,
                17.2 or 17.3 and it shall co-operate in completing any procedural
                formalities necessary for the Borrower to obtain authorisation to
                make any
                payment under Clauses 8.5, 17.2 or 17.3 without a deduction or
                withholding.

            


    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          15

                                        	
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              The
                                                                Agent, the Security
                                                                Agent and the
                                                                Lenders

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        


                                

                                 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              15.1

            	
              Appointment

            


    

     

    
      	 	
              15.1.1

            	
              Each
                Lender appoints the Agent to act as its agent under and in connection
                with
                the Finance Documents and each Lender and the Agent appoints the
                Security
                Agent to act as its security agent for the purpose of the Security
                Documents.

            


    

     

    
      	 	
              15.1.2

            	
              Each
                Lender authorises the Agent and each Lender and the Agent authorises
                the
                Security Agent to exercise the rights, powers, authorities and discretions
                specifically given to the Agent or the Security Agent (as the case
                may be)
                under or in connection with the Finance Documents together with any
                other
                incidental rights, powers, authorities and
                discretions.

            


    

     

    
      	 	
              15.1.3

            	
              Except
                where the context otherwise requires, references in this Clause 15
                to the
                "Agent"
                shall mean the Agent and the Security Agent individually and
                collectively.

            


    

     

    
      	 	
              15.2

            	
              Authority
                Each
                Lender irrevocably authorises the Security Agent (in the case of
                Clause
                15.2.1) and the Agent (in the case of Clauses 15.2.2, 15.2.3 and
                15.2.4)
                (in each case subject to Clauses 15.4 and 15.18):
                

            


    

     

    
      	 	
              15.2.1

            	
              to
                execute any Finance Document (other than this Agreement) on its
                behalf;

            


    

     

    
      	 	
              15.2.2

            	
              to
                collect, receive, release or pay any money on its
                behalf;

            


    

     

    
      	 	
              15.2.3

            	
              acting
                on the instructions from time to time of the Majority Lenders (save
                where
                the terms of any Security Document expressly provide otherwise) to
                give or
                withhold any waivers, consents or approvals under or pursuant to
                any
                Finance Document; and

            


    

     

    
      
        
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        56

        
          

        

      

      
        
        

      

       

    

    
      
        	 	
                15.2.4

              	
                acting
                  on the instructions from time to time of the Majority Lenders (save
                  where
                  the terms of any Security Document expressly provide otherwise)
                  to
                  exercise, or refrain from exercising, any rights, powers, authorities
                  or
                  discretions under or pursuant to any Finance Document. 

              


      

       

    

    The
      Agent
      shall have no duties or responsibilities as agent or as security agent other
      than those expressly conferred on it by the Finance Documents and shall not
      be
      obliged to act on any instructions from the Lenders or the Majority Lenders
      if
      to do so would, in the opinion of the Agent, be contrary to any provision of
      the
      Finance Documents or to any law, or would expose the Agent to any actual or
      potential liability to any third party.

     

    
      	 	
              15.3

            	
              Trust
                The
                Security Agent agrees and declares, and each of the other Finance
                Parties
                acknowledges, that, subject to the terms and conditions of this Clause
                15.3, the Security Agent holds the Trust Property on trust for the
                Finance
                Parties absolutely. Each of the other Finance Parties agrees that
                the
                obligations, rights and benefits vested in the Security Agent shall
                be
                performed and exercised in accordance with this Clause 15.3. The
                Security
                Agent shall have the benefit of all of the provisions of this Agreement
                benefiting it in its capacity as security agent for the Finance Parties,
                and all the powers and discretions conferred on trustees by the Trustee
                Act 1925 (to the extent not inconsistent with this Agreement). In
                addition:

            


    

     

    
      	 	
              15.3.1

            	
              the
                Security Agent and any attorney, agent or delegate of the Security
                Agent
                may indemnify itself or himself out of the Trust Property against
                all
                liabilities, costs, fees, damages, charges, losses and expenses sustained
                or incurred by it or him in relation to the taking or holding of
                any of
                the Trust Property or in connection with the exercise or purported
                exercise of the rights, trusts, powers and discretions vested in
                the
                Security Agent or any other such person by or pursuant to the Security
                Documents or in respect of anything else done or omitted to be done
                in any
                way relating to the Security Documents other than as a result of
                its gross
                negligence or wilful misconduct;

            


    

     

    
      
        
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        57

        
          

        

      

      
        
        

      

    

    
      	 	
              15.3.2

            	
              the
                other Finance Parties acknowledge that the Security Agent shall be
                under
                no obligation to insure any property nor to require any other person
                to
                insure any property and shall not be responsible for any loss which
                may be
                suffered by any person as a result of the lack or insufficiency of
                any
                insurance; and

            


    

     

    
      	 	
              15.3.3

            	
              the
                Finance Parties agree that the perpetuity period applicable to the
                trusts
                declared by this Agreement shall be the period of eighty years from
                the
                date of this Agreement.

            


    

     

    
      
        
          	 	
                  15.4 

                	
                  Limitations
                    on authority Except
                    with the prior written consent of all the Lenders, the Agent
                    shall not be
                    entitled
                    to: 

                


        

         

      

    

    
      	 	
              15.4.1

            	
              release
                or vary any security given for the Borrower's obligations under this
                Agreement; nor

            


    

     

    
      	 	
              15.4.2

            	
              waive
                the payment of any sum of money payable by any Security Party under
                the
                Finance Documents; nor

            


    

     

    
      	 	
              15.4.3

            	
              change
                the meaning of the expressions "Majority
                Lenders",
                "Margin",
                "Commitment
                Commission"
                or "Default
                Rate";
                nor

            


    

     

    
      	 	
              15.4.4

            	
              exercise,
                or refrain from exercising, any right, power, authority or discretion,
                or
                give or withhold any consent, the exercise or giving of which is,
                by the
                terms of this Agreement, expressly reserved to the Lenders;
                nor

            


    

     

    
      	 	
              15.4.5

            	
              extend
                the due date for the payment of any sum of money payable by any Security
                Party under any Finance Document;
                nor

            


    

     

    
      	 	
              15.4.6

            	
              take
                or refrain from taking any step if the effect of such action or inaction
                may lead to the increase of the obligations of a Lender under any
                Finance
                Document; nor

            


    

     

    
      	 	
              15.4.7

            	
              agree
                to change the currency in which any sum is payable under any Finance
                Document (other than in accordance with the terms of the relevant
                Finance
                Document); nor

            


    

     

    
      	 	
              15.4.8

            	
              agree
                to amend this Clause 15.4.

            


    

     

    
      
        
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        58

        
          

        

      

      
        
        

      

    

    
      	 	
              15.5

            	
              Liability
                Neither
                the Agent nor any of its directors, officers, employees or agents
                shall be
                liable to the Lenders for anything done or omitted to be done by
                the Agent
                under or in connection with any of the Relevant Documents unless
                as a
                result of the Agent's gross negligence or wilful
                misconduct.

            


    

     

    
      	 	
              15.6

            	
              Acknowledgement
                Each
                Lender acknowledges that: 

            


    

     

    
      	 	
              15.6.1

            	
              it
                has not relied on any representation made by the Agent or any of
                the
                Agent's directors, officers, employees or agents or by any other
                person
                acting or purporting to act on behalf of the Agent to induce it to
                enter
                into any Finance Document; 

            


    

     

    
      	 	
              15.6.2

            	
              it
                has made and will continue to make without reliance on the Agent,
                and
                based on such documents and other evidence as it considers appropriate,
                its own independent investigation of the financial condition and
                affairs
                of the Security Parties in connection with the making and continuation
                of
                the Loan; 

            


    

     

    
      	 	
              15.6.3

            	
              it
                has made its own appraisal of the creditworthiness of the Security
                Parties; and

            


    

     

    
      	 	
              15.6.4

            	
              the
                Agent shall not have any duty or responsibility at any time to provide
                it
                with any credit or other information relating to any Security Party
                unless
                that information is received by the Agent pursuant to the express
                terms of
                a Finance Document. 

            


    

     

    Each
      Lender agrees that it will not assert nor seek to assert against any director,
      officer, employee or agent of the Agent or against any other person acting
      or
      purporting to act on behalf of the Agent any claim which it might have against
      them in respect of any of the matters referred to in this Clause
      15.6.

     

    
      	 	
              15.7

            	
              Limitations
                on responsibility The
                Agent shall have no responsibility to any Security Party or to any
                Lender
                on account of: 

            


    

     

    
      	 	
              15.7.1

            	
              the
                failure of a Lender or of any Security Party to perform any of its
                obligations under a Finance Document;
                nor

            


    

     

    
      	 	
              15.7.2

            	
              the
                financial condition of any Security Party;
                nor

            


    

     

    
      
        
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        59

        
          

        

      

      
        
        

      

    

    
      	 	
              15.7.3

            	
              the
                completeness or accuracy of any statements, representations or warranties
                made in or pursuant to any Finance Document, or in or pursuant to
                any
                document delivered pursuant to or in connection with any Finance
                Document;
                nor

            


    

     

    
      	 	
              15.7.4

            	
              the
                negotiation, execution, effectiveness, genuineness, validity,
                enforceability, admissibility in evidence or sufficiency of any Finance
                Document or of any document executed or delivered pursuant to or
                in
                connection with any Finance
                Document.

            


    

     

    
      
        
          
            	 	
                    15.8 

                  	
                    The
                      Agent's rights The
                      Agent
                      may:  

                  


          

           

        

      

    

    
      	 	
              15.8.1

            	
              assume
                that all representations or warranties made or deemed repeated by
                any
                Security Party in or pursuant to any Finance Document are true and
                complete, unless, in its capacity as the Agent, it has acquired actual
                knowledge to the contrary; 

            


    

     

    
      	 	
              15.8.2

            	
              assume
                that no Default has occurred unless, in its capacity as the Agent,
                it has
                acquired actual knowledge to the contrary;


            


    

     

    
      	 	
              15.8.3

            	
              rely
                on any document or notice believed by it to be genuine;
                

            


    

     

    
      	 	
              15.8.4

            	
              rely
                as to legal or other professional matters on opinions and statements
                of
                any legal or other professional advisers selected or approved by
                it;

            


    

     

    
      	 	
              15.8.5

            	
              rely
                as to any factual matters which might reasonably be expected to be
                within
                the knowledge of any Security Party on a certificate signed by or
                on
                behalf of that Security Party; and

            


    

     

    
      	 	
              15.8.6

            	
              refrain
                from exercising any right, power, discretion or remedy unless and
                until
                instructed to exercise that right, power, discretion or remedy and
                as to
                the manner of its exercise by the Lenders (or, where applicable,
                by the
                Majority Lenders) and unless and until the Agent has received from
                the
                Lenders any payment which the Agent may require on account of, or
                any
                security which the Agent may require for, any costs, claims, expenses
                (including legal and other professional fees) and liabilities which
                it
                considers it may incur or sustain in complying with those
                instructions.

            


    

     

    
      
        
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                      15.9

                    	
                      The
                        Agent's duties The
                        Agent shall:   

                    


            

             

          

        

      

    

    
      	 	
              15.9.1

            	
              if
                requested in writing to do so by a Lender, make enquiry and advise
                the
                Lenders as to the performance or observance of any of the provisions
                of
                any Finance Document by any Security Party or as to the existence
                of an
                Event of Default; and

            


    

     

    
      	 	
              15.9.2

            	
              inform
                the Lenders promptly of any Event of Default of which the Agent has
                actual
                knowledge.

            


    

     

    
      	 	
              15.10

            	
              No
                deemed knowledge The
                Agent shall not be deemed to have actual knowledge of the falsehood
                or
                incompleteness of any representation or warranty made or deemed repeated
                by any Security Party or actual knowledge of the occurrence of any
                Default
                unless a Lender or a Security Party shall have given written notice
                thereof to the Agent in its capacity as the Agent. Any information
                acquired by the Agent other than specifically in its capacity as
                the Agent
                shall not be deemed to be information acquired by the Agent in its
                capacity as the Agent. 

            


    

     

    
      	 	
              15.11

            	
              Other
                business The
                Agent may, without any liability to account to the Lenders, generally
                engage in any kind of banking or trust business with a Security Party
                or
                with a Security Party's subsidiaries or associated companies or with
                a
                Lender as if it were not the Agent.

            


    

     

    
      	 	
              15.12

            	
              Indemnity
                The
                Lenders shall, promptly on the Agent's request, reimburse the Agent
                in
                their respective Proportionate Shares,
                for, and keep the Agent fully indemnified in respect of all liabilities,
                damages, costs and claims sustained or incurred by the Agent in connection
                with the Finance Documents, or the performance of its duties and
                obligations, or the exercise of its rights, powers, discretions or
                remedies under or pursuant to any Finance Document, to the extent
                not paid
                by the Security Parties and not arising solely from the Agent's gross
                negligence or wilful misconduct.

            


    

     

    
      	 	
              15.13

            	
              Employment
                of agents In
                performing its duties and exercising its rights, powers, discretions
                and
                remedies under or pursuant to the Finance Documents, the Agent shall
                be
                entitled to employ and pay agents to do anything which the Agent
                is
                empowered to do under or pursuant to the Finance Documents (including
                the
                receipt of money and documents and the payment of money) and to act
                or
                refrain from taking action in reliance on the opinion of, or advice
                or
                information obtained from, any lawyer, banker, broker, accountant,
                valuer
                or any other person believed by the Agent in good faith to be competent
                to
                give such opinion, advice or
                information.

            


    

     

    
      
        
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              15.14

            	
              Distribution
                of payments The
                Agent shall pay promptly to the order of each Lender that Lender's
                Proportionate Share of every sum of money received by the Agent pursuant
                to the Finance Documents (with the exception of any amounts payable
                pursuant to Clause 9 and/or any Fee Letter and any amounts which,
                by the
                terms of the Finance Documents, are paid to the Agent for the account
                of
                the Agent alone or specifically for the account of one or more Lenders)
                and until so paid such amount shall be held by the Agent on trust
                absolutely for that Lender.

            


    

     

    
      	 	
              15.15

            	
              Reimbursement
                The
                Agent shall have no liability to pay any sum to a Lender until it
                has
                itself received payment of that sum. If, however, the Agent does
                pay any
                sum to a Lender on account of any amount prospectively due to that
                Lender
                pursuant to Clause 15.14 before it has itself received payment of
                that
                amount, and the Agent does not in fact receive payment within five
                (5)
                Business Days after the date on which that payment was required to
                be made
                by the terms of the Finance Documents, that Lender will, on demand
                by the
                Agent, refund to the Agent an amount equal to the amount received
                by it,
                together with an amount sufficient to reimburse the Agent for any
                amount
                which the Agent may certify that it has been required to pay by way
                of
                interest on money borrowed to fund the amount in question during
                the
                period beginning on the date on which that amount was required to
                be paid
                by the terms of the Finance Documents and ending on the date on which
                the
                Agent receives reimbursement.

            


    

     

    
      	 	
              15.16

            	
              Redistribution
                of payments Unless
                otherwise agreed between the Lenders and the Agent, if at any time
                a
                Lender receives or recovers by way of set-off, the exercise of any
                lien or
                otherwise from any Security Party, an amount greater than that Lender's
                Proportionate Share of any sum due from that Security Party to the
                Lenders
                under the Finance Documents (the amount of the excess being referred
                to in
                this Clause 15.16 and in Clause 15.17 as the "Excess
                Amount")
                then:

            


    

     

    
      
        	 	
                15.16.1

              	
                that
                  Lender shall promptly notify the Agent (which shall promptly notify
                  each
                  other Lender);

              


      

       

      
        
          
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          62

          
            

          

        

        
          
          

        

      

    

    
      	 	
              15.16.2

            	
              that
                Lender shall pay to the Agent an amount equal to the Excess Amount
                within
                ten (10) days of its receipt or recovery of the Excess Amount;
                and

            


    

     

    
      	 	
              15.16.3

            	
              the
                Agent shall treat that payment as if it were a payment by the Security
                Party in question on account of the sum due from that Security Party
                to
                the Lenders and shall account to the Lenders in respect of the Excess
                Amount in accordance with the provisions of this Clause
                15.16.

            


    

     

    However,
      if a Lender has commenced any legal proceedings to recover sums owing to it
      under the Finance Documents and, as a result of, or in connection with, those
      proceedings has received an Excess Amount, the Agent shall not distribute any
      of
      that Excess Amount to any other Lender which had been notified of the
      proceedings and had the legal right to, but did not, join those proceedings
      or
      commence and diligently prosecute separate proceedings to enforce its rights
      in
      the same or another court.

     

    
      
        
          
            
              
                	 	
                        15.17

                      	
                        Rescission
                          of Excess Amount If
                          all or any part of any Excess Amount is rescinded or must
                          otherwise be
                          restored to any Security Party or to any other third party,
                          the Lenders
                          which have received any part of that Excess Amount by way
                          of distribution
                          from the Agent pursuant to Clause 15.16 shall repay to
                          the Agent for the
                          account of the Lender which originally received or recovered
                          the Excess
                          Amount, the amount which shall be necessary to ensure that
                          the Lenders
                          share rateably in accordance with their Proportionate Shares
                          in the amount
                          of the receipt or payment retained, together with interest
                          on that amount
                          at a rate equivalent to that (if any) paid by the Lender
                          receiving or
                          recovering the Excess Amount to the person to whom that
                          Lender is liable
                          to make payment in respect of such amount, and Clause 15.16.3
                          shall apply
                          only to the retained amount.    

                      


              

               

            

          

        

      

    

     

    
      	 	
              15.18

            	
              Instructions
                Where
                the Agent is authorised or directed to act or refrain from acting
                in
                accordance with the instructions of the Lenders or of the Majority
                Lenders
                each of the Lenders shall provide the Agent with instructions within
                three
                (3) Business Days of the Agent's request (which request may be made
                orally
                or in writing). If a Lender does not provide the Agent with instructions
                within that period, that Lender shall be bound by the decision of
                the
                Agent. Nothing in this Clause 15.18 shall limit the right of the
                Agent to
                take, or refrain from taking, any action without obtaining the
                instructions of the Lenders or the Majority Lenders if the Agent
                in its
                discretion considers it necessary or appropriate to take, or refrain
                from
                taking, such action in order to preserve the rights of the Lenders
                under
                or in connection with the Finance Documents. In that event, the Agent
                will
                notify the Lenders of the action taken by it as soon as reasonably
                practicable, and the Lenders agree to ratify any action taken by
                the Agent
                pursuant to this Clause 15.18.

            


    

     

    
      
        
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              15.19

            	
              Payments
                All amounts payable to a Lender under this Clause 15 shall be paid
                to such
                account at such bank as that Lender may from time to time direct
                in
                writing to the Agent.

            


    

     

    
      	 	
              15.20

            	
              "Know
                your customer" checks Each
                Lender shall promptly upon the request of the Agent supply, or procure
                the
                supply of, such documentation and other evidence as is reasonably
                requested by the Agent (for itself) in order for the Agent to carry
                out
                and be satisfied it has complied with all necessary "know your customer"
                or other similar checks under all applicable laws and regulations
                pursuant
                to the transactions contemplated in the Finance
                Documents.

            


    

     

    
      	 	
              15.21

            	
              Resignation
                Subject
                to a successor being appointed in accordance with this Clause 15.21,
                the
                Agent may resign as agent and/or the Security Agent may resign as
                security
                agent at any time without assigning any reason by giving to the Borrower
                and the Lenders notice of its intention to do so, in which event
                the
                following shall apply:

            


    

     

    
      	 	
              15.21.1

            	
              with
                the consent of the Borrower not to be unreasonably withheld (but
                such
                consent not to be required at any time after an Event of Default
                which is
                continuing unremedied and unwaived) the Lenders may within thirty
                (30)
                days after the date of the notice from the Agent or the Security
                Agent (as
                the case may be) appoint a successor to act as agent and/or security
                agent
                or, if they fail to do so with the consent of the Borrower, not to
                be
                unreasonably withheld (but such consent not to be required at any
                time
                after an Event of Default which is continuing unremedied and unwaived),
                the Agent or the Security Agent (as the case may be) may appoint
                any other
                bank or financial institution as its
                successor;

            


    

     

    
      	 	
              15.21.2

            	
              the
                resignation of the Agent or the Security Agent (as the case may be)
                shall
                take effect simultaneously with the appointment of its successor
                on
                written notice of that appointment being given to the Borrower and
                the
                Lenders; 

            


    

     

    
      
        
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              15.21.3

            	
              the
                Agent or the Security Agent (as the case may be) shall thereupon
                be
                discharged from all further obligations as agent and/or security
                agent but
                shall remain entitled to the benefit of the provisions of this Clause
                15;
                and

            


    

     

    
      	 	
              15.21.4

            	
              the
                successor of the Agent or the Security Agent (as the case may be)
                and each
                of the other parties to this Agreement shall have the same rights
                and
                obligations amongst themselves as they would have had if that successor
                had been a party to this Agreement.

            


    

     

    
      	 	
              15.22

            	
              No
                fiduciary relationship Except
                as provided in Clauses 15.3 and 15.14, the Agent shall not have any
                fiduciary relationship with or be deemed to be a trustee of or for
                any
                other person and nothing contained in any Finance Document shall
                constitute a partnership between any two or more Lenders or between
                the
                Agent and any other person.

            


    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            16

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Set-Off

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          


                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    A
      Finance
      Party may set off any matured obligation due from the Borrower under any Finance
      Document (to the extent beneficially owned by that Finance Party) against any
      matured obligation owed by that Finance Party to the Borrower, regardless of
      the
      place of payment, booking branch or currency of either obligation. If the
      obligations are in different currencies, that Finance Party may convert either
      obligation at a market rate of exchange in its usual course of business for
      the
      purpose of the set-off.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            17

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Payments 

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          


                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              17.1

            	
              Payments
                Each
                amount payable by the Borrower under a Finance Document shall be
                paid to
                such account at such bank as the Agent may from time to time direct
                to the
                Borrower in the Currency of Account and in such funds as are customary
                at
                the time for settlement of transactions in the relevant currency
                in the
                place of payment. Payment shall be deemed to have been received by
                the
                Agent on the date on which the Agent receives authenticated advice
                of
                receipt, unless that advice is received by the Agent on a day other
                than a
                Business Day or at a time of day (whether on a Business Day or not)
                when
                the Agent in its reasonable discretion considers that it is impossible
                or
                impracticable for the Agent to utilise the amount received for value
                that
                same day, in which event the payment in question shall be deemed
                to have
                been received by the Agent on the Business Day next following the
                date of
                receipt of advice by the Agent.

            


    

     

    
      
        
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              17.2

            	
              No
                deductions or withholdings Each
                payment (whether of principal or interest or otherwise) to be made
                by the
                Borrower under a Finance Document shall, subject only to Clause 17.3,
                be
                made free and clear of and without deduction for or on account of
                any
                Taxes or other deductions, withholdings, restrictions, conditions
                or
                counterclaims of any nature. 

            


    

     

    
      	 	
              17.3

            	
              Grossing-up
                If
                at any time any law requires (or is interpreted to require) the Borrower
                to make any deduction or withholding from any payment, or to change
                the
                rate or manner in which any required deduction or withholding is
                made, the
                Borrower will promptly notify the Agent and, simultaneously with
                making
                that payment, will pay to the Agent whatever additional amount (after
                taking into account any additional Taxes on, or deductions or withholdings
                from, or restrictions or conditions on, that additional amount) is
                necessary to ensure that, after making the deduction or withholding,
                the
                relevant Finance Parties receive a net sum equal to the sum which
                they
                would have received had no deduction or withholding been made.
                

            


    

     

    
      	 	
              17.4

            	
              Evidence
                of deductions If
                at any time the Borrower is required by law to make any deduction
                or
                withholding from any payment to be made by it under a Finance Document,
                the Borrower will pay the amount required to be deducted or withheld
                to
                the relevant authority within the time allowed under the applicable
                law
                and will, no later than thirty (30) days after making that payment,
                deliver to the Agent an original receipt issued by the relevant authority,
                or other evidence reasonably acceptable to the Agent, evidencing
                the
                payment to that authority of all amounts required to be deducted
                or
                withheld. 

            


    

     

    
      
        
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              17.5

            	
              Rebate
                If
                the Borrower pays any additional amount under Clause 17.3, and a
                Finance
                Party subsequently receives a refund or allowance from any tax authority
                which that Finance Party identifies as being referable to that increased
                amount so paid by the Borrower, that Finance Party shall, as soon
                as
                reasonably practicable, pay to the Borrower an amount equal to the
                amount
                of the refund or allowance received, if and to the extent that it
                may do
                so without prejudicing its right to retain that refund or allowance
                and
                without putting itself in any worse financial position than that
                in which
                it would have been had the relevant deduction or withholding not
                been
                required to have been made. Nothing in this Clause 17.5 shall be
                interpreted as imposing any obligation on any Finance Party to apply
                for
                any refund or allowance nor as restricting in any way the manner
                in which
                any Finance Party organises its tax affairs, nor as imposing on any
                Finance Party any obligation to disclose to the Borrower any information
                regarding its tax affairs or tax
                computations.

            


    

     


      
        	 	
                17.6

              	
                Adjustment
                  of due dates If
                  any payment or transfer of funds to be made under a Finance Document,
                  other than a payment of interest on
                  a
                  Drawing,
                  shall be due on a day which is not a Business Day, that payment
                  shall be
                  made on the next succeeding Business Day (unless the next succeeding
                  Business Day falls in the next calendar month in which event the
                  payment
                  shall be made on the next preceding Business Day). Any such variation
                  of
                  time shall be taken into account in computing any interest in respect
                  of
                  that payment.

              


      


     

    
      	 	
              17.7

            	
              Control
                Account
                The Agent shall open and maintain on its books a control account
                in the
                name of the Borrower showing the advance of the Loan
                and the computation and payment of interest and all other sums due
                under
                this Agreement. The Borrower's obligations to repay the Loan
                and to pay interest and all other sums due under this Agreement shall
                be
                evidenced by the entries from time to time made in the control account
                opened and maintained under this Clause 17.7 and those entries will,
                in
                the absence of manifest error, be conclusive and
                binding.

            


    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            18

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Notices

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          


                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              18.1

            	
              Communications
                in writing Any
                communication to be made under or in connection with this Agreement
                shall
                be made in writing and, unless otherwise stated, may be made by fax
                or
                letter or (subject to Clause 18.6) electronic mail.
                

            


    

     

    
      	 	
              18.2

            	
              Addresses
                The
                address and fax number (and the department or officer, if any, for
                whose
                attention the communication is to be made) of each party to this
                Agreement
                for any communication or document to be made or delivered under or
                in
                connection with this Agreement are:

            


    

     

    
      
        
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        67

        
          

        

      

      
        
        

      

    

    
      	 	
              18.2.1

            	
              in
                the case of the Borrower, c/o Teekay Shipping (Canada) Ltd Suite
                2000,
                Bentall 5, 550 Burrard Street, Vancouver, B.C., Canada V6C 2K2 (fax
                no: +1
                604 681 3011) marked for the attention of Director
                Finance;

            


    

     

    
      	 	
              18.2.2

            	
              in
                the case of each Lender, those appearing opposite its name in
                Schedule 1;

            


    

     

    
      	 	
              18.2.3

            	
              in
                the case of the Agent, 200
                Park Avenue, 31st
                Floor, New York, New York 10166-0396, United States of America
                (fax
                no: +1 212 681 3900) marked for the attention of Credit, Sanjiv
                Nayer/Erlend Bryn; and

            


    

     

    
      	 	
              18.2.4

            	
              in
                the case of the Security Agent, Domshof
                17, 28195 Bremen, Federal Republic of Germany (fax
                no: + 49 421 3609 329) marked for the attention of
                Credit Department;

            


    

     

    or
      any
      substitute address, fax number, department or officer as any party may notify
      to
      the Agent (or the Agent may notify to the other parties, if a change is made
      by
      the Agent) by not less than five (5) Business Days' notice.

     

    
      	 	
              18.3

            	
              Delivery
                Any
                communication or document made or delivered by one party to this
                Agreement
                to another under or in connection this Agreement will only be
                effective:

            


    

     

    
      
        	 	
                18.3.1

              	
                if
                  by way of fax, when received in legible form;
                  or 

              


      

       

    

    
      	 	
              18.3.2

            	
              if
                by way of letter, when it has been left at the relevant address or
                five
                (5) Business Days after being deposited in the post postage prepaid
                in an
                envelope addressed to it at that address;
                or

            


    

     

    
      	 	
              18.3.3

            	
              if
                by way of electronic mail, in accordance with Clause
                18.6;

            


    

     

    and,
      if a
      particular department or officer is specified as part of its address details
      provided under Clause 18.2, if addressed to that department or
      officer.

     

    Any
      communication or document to be made or delivered to the Agent will be effective
      only when actually received by the Agent.

     

    All
      notices from or to the Borrower shall be sent through the Agent.

     

    
      
        
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              18.4

            	
              Notification
                of address and fax number Promptly
                upon receipt of notification of an address, fax number or change
                of
                address, pursuant to Clause 18.2 or changing its own address or fax
                number, the Agent shall notify the other parties to this
                Agreement.

            


    

     

    
      	 	
              18.5

            	
              English
                language Any
                notice given under or in connection with this Agreement must be in
                English. All other documents provided under or in connection with
                this
                Agreement must be:

            


    

     

    
      	 	
              18.5.1

            	
              in
                English; or

            


    

     

    
      	 	
              18.5.2

            	
              if
                not in English, and if so required by the Agent, accompanied by a
                certified English translation and, in this case, the English translation
                will prevail unless the document is a constitutional, statutory or
                other
                official document.

            


    

     

    
      
        	 	
                18.6

              	
                Electronic
                  communication 

              


      

       

      
        
          	 	
                  (a) 

                	Any communication to be made in connection with
                  this
                  Agreement may be made by electronic mail or other electronic means,
                  if the
                  Borrower and the relevant Finance Party:


        

        
           

          
            	 	
                    (i)

                  	agree that, unless and until notified to the
                    contrary,
                    this is to be an accepted form of
                    communication;


          

          
             

            
              	 	
                      (ii)

                    	
                      notify
                        each other in writing of their electronic mail address and/or
                        any other
                        information required to enable the sending and receipt of
                        information by
                        that means; and

                    


            

            
               

              
                	 	(iii)	notify each other of any change to their
                        address or any
                        other such information supplied by them.


              

               

              
                
                  
                    	 	
                            (b)

                          	Any electronic communication made
                            between the Borrower
                            and the relevant Finance Party will be effective only
                            when actually
                            received in readable form and acknowledged by the recipient
                            (it being
                            understood that any system generated responses do not
                            constitute an
                            acknowledgement) and in the case of any electronic communication
                            made by
                            the Borrower to a Finance Party only if it is addressed
                            in such a manner
                            as the Finance Party shall specify for this
                            purpose.


                  

                  
                     

                    
                      
                        
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                                            19

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Partial
                                                                    Invalidity

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          


                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    If,
      at
      any time, any provision of a Finance Document is or becomes illegal, invalid
      or
      unenforceable in any respect under any law of any jurisdiction, neither the
      legality, validity or enforceability of the remaining provisions nor the
      legality, validity or enforceability of such provision under the law of any
      other jurisdiction will in any way be affected or impaired.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            20

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Remedies
                                                                    and
                                                                    Waivers

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          


                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    No
      failure to exercise, nor any delay in exercising, on the part of any Finance
      Party, any right or remedy under a Finance Document shall operate as a waiver,
      nor shall any single or partial exercise of any right or remedy prevent any
      further or other exercise 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.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            21

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Miscellaneous

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          


                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              21.1

            	
              No
                oral variations No
                variation or amendment of a Finance Document shall be valid unless
                in
                writing and signed on behalf of all the Finance
                Parties.

            


    

     

    
      	 	
              21.2

            	
              Further
                Assurance If
                any provision of a Finance Document shall be invalid or unenforceable
                in
                whole or in part by reason of any present or future law or any decision
                of
                any court, or if the documents at any time held by or on behalf of
                the
                Finance Parties or any of them are considered by the Lenders for
                any
                reason insufficient to carry out the terms of this Agreement, then
                from
                time to time the Borrower will promptly, on demand by the Agent,
                execute
                or procure the execution of such further documents as in the opinion
                of
                the Lenders are necessary to provide adequate security for the repayment
                of the Indebtedness.

            


    

     

    
      	 	
              21.3

            	
              Rescission
                of payments etc. Any
                discharge, release or reassignment by a Finance Party of any of the
                security constituted by, or any of the obligations of a Security
                Party
                contained in, a Finance Document shall be (and be deemed always to
                have
                been) void if any act (including, without limitation, any payment)
                as a
                result of which such discharge, release or reassignment was given
                or made
                is subsequently wholly or partially rescinded or avoided by operation
                of
                any law.

            


    

     

    
      
        
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              21.4

            	
              Certificates
                Any
                certificate or statement signed by an authorised signatory of the
                Agent
                purporting to show the amount of the Indebtedness (or any part of
                the
                Indebtedness) or any other amount referred to in any Finance Document
                shall, save for manifest error or on any question of law, be conclusive
                evidence as against the Borrower of that amount.
                

            


    

     

    
      	 	
              21.5

            	
              Counterparts
                This
                Agreement may be executed in any number of counterparts each of which
                shall be original but which shall together constitute the same
                instrument.

            


    

     

    
      	 	
              21.6

            	
              Contracts
                (Rights of Third Parties) Act 1999 A
                person who is not a party to this Agreement has no right under the
                Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy
                the
                benefit of any term of this
                Agreement.

            


    

     

    
      	 	
              21.7

            	
              Disclosure
                of Information The
                Borrower authorises each Lender to disclose any information and/or
                document(s) concerning its relationship with such Lender (i) to
                authorities in any other countries where such Lender or any Affiliate
                is
                represented and/or where any Lender or any Affiliate may be requested
                information by any regulatory authority, when this shall be deemed
                necessary in order for such Lender or any Affiliate to meet its
                requirements for the contribution to reduction or prevention of money
                laundering, terrorism and corruption, and (ii) to any Affiliate of
                that
                Lender making it possible to consolidate the client's total commitments
                and offer the client any other products offered by that Lender or
                any
                Affiliate, subject always to the duties of confidentiality on the
                Lenders
                set out herein.

            


    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            22

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Law
                                                                    and
                                                                    Jurisdiction

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          


                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              22.1

            	
              Governing
                law This
                Agreement shall in all respects be governed by and interpreted in
                accordance with English law.

            


    

     

    
      	 	
              22.2

            	
              Jurisdiction
                For
                the exclusive benefit of the Finance Parties, the parties to this
                Agreement irrevocably agree that the courts of England are to have
                jurisdiction to settle any disputes which may arise out of or in
                connection with this Agreement and that any proceedings may be brought
                in
                those courts.

            


    

     

    
      	 	
              22.3

            	
              Alternative
                jurisdictions Nothing
                contained in this Clause 22 shall limit the right of the Finance
                Parties
                to commence any proceedings against the Borrower in any other court
                of
                competent jurisdiction nor shall the commencement of any proceedings
                against the Borrower in one or more jurisdictions preclude the
                commencement of any proceedings in any other jurisdiction, whether
                concurrently or not.

            


    

     

    
      
        
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              22.4

            	
              Waiver
                of objections The
                Borrower irrevocably waives any objection which it may now or in
                the
                future have to the laying of the venue of any proceedings in any
                court
                referred to in this Clause 22, and any claim that those proceedings
                have
                been brought in an inconvenient or inappropriate forum, and irrevocably
                agrees that a judgment in any proceedings commenced in any such court
                shall be conclusive and binding on it and may be enforced in the
                courts of
                any other jurisdiction.

            


    

     

    
      	 	
              22.5

            	
              Service
                of process Without
                prejudice to any other mode of service allowed under any relevant
                law, the
                Borrower:

            


    

     

    
      	 	
              22.5.1

            	
              irrevocably
                appoints Teekay Shipping (UK) Ltd of 2nd
                Floor, 86 Jermyn Street, London SW1Y 6JD England as its agent for
                service
                of process in relation to any proceedings before the English courts
                in
                connection with this Agreement; and

            


    

     

    
      	 	
              22.5.2

            	
              agrees
                that failure by a process agent to notify the Borrower of the process
                will
                not invalidate the proceedings
                concerned.

            


    

     

     

    


    
      
        
          
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    SCHEDULE
      1: The Lenders and the Commitments

     

    The
      Lenders                     The
      Commitments         The
      Proportionate Share

     
                  (US$)                               (%)

     

    
      
        	
                 

                DnB NOR Bank ASA

                
                  200
                    Park Avenue

                  31st
                    Floor

                  New
                    York, NY10166

                  United
                    States of America

                  Fax
                    no. +1 212 681 4123

                  Attn:
                    Teresa Rosu

                

              	
                 230,000,000

                 

                 

                 

                 

                 

                 

                 

              	
                 24.5

                 

                 

                 

                 

                 

                 

                 

              
	
                 

                 

                Fortis
                  Capital Corp.

                
                  520
                    Madison Avenue

                  New
                    York

                  NY
                    10022 USA

                  Fax
                    no: +1 212 340 5370

                  Attn:
                    Global Shipping Group

                

              	
                 230,000,000

                 

                 

                 

              	
                 24.5

                 

                 

                 

              
	
                 

                 

                Nordea
                  Bank Finland PLC, 

                
                  New
                    York Branch 

                  437
                    Madison Avenue

                  New
                    York

                  NY
                    10022

                  Fax
                    no: +1 212 421 4420

                  Attention:
                    Shipping, Offshore and 

                  Oil
                    Services Group

                

              	
                 230,000,000


                 

                 

                 

                 

                 

                 

              	
                 
24.5

                 

                 

                 

                 

                 

                 

              
	
                 

                 

                Deutsche
                  Schiffsbank 

                Aktiengesellschaft 
                  Domshof
                    17 

                  28195
                    Bremen

                  Federal
                    Republic of Germany

                  Fax
                    no: +49 421 3609 329

                  Attn:
                    Credit Department

                

              	
                 

                125,000,000

                 

                 

                 

                 

                 

              	
                    
13.25

                 

                 

                 

                 

              
	
                 

                 

                Landesbank
                  Hessen-Thuringen

                
                  
                    Girozentrale
                      


                  New
                    York Branch 

                  420
                    Fifth Avenue, 25th
                    Floor

                  New
                    York 

                  
                    NY
                      10018-2729

                  

                  U.S.A.

                  Fax
                    no: +1212 703 5256

                  Attn:
                    Shipping Finance

                

              	
                 

                125,000,000

                 

                 

                 

                 

                 

                 

                 

                 

              	
                 13.25

                 

                 

                 

                 

                 

                 

                 

              


      

    

                                                                                                                           

                                                                                                                                   

                                                                                                                              
      

     

    


    
      
        
          
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    SCHEDULE
      2: Conditions Precedent and Subsequent

     

    Part
      I: Conditions precedent
      to the First Drawdown Date

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              1

                                            	
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      Security
                                                                        Parties

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            


                                    

                                     

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              (a)

            	
              Constitutional
                Documents
                Copies of the constitutional documents of each Security Party together
                with such other evidence as the Agent may reasonably require that
                each
                Security Party is duly formed or incorporated in its country of formation
                or incorporation and remains in existence with power to enter into,
                and
                perform its obligations under, the Relevant Documents to which it
                is or is
                to become a party.

            


    

     

    
      	 	
              (b)

            	
              Certificates
                of good standing
                A
                certificate of good standing in respect of each Security Party (if
                such a
                certificate can be obtained).

            


    

     

    
      	 	
              (c)

            	
              Board
                resolutions A
                copy of a resolution of the board of directors of each Security Party
                (or
                its sole member or general
                partner):

            


    

     

    
      	 	
              (i)

            	
              approving
                the terms of, and the transactions contemplated by, the Relevant
                Documents
                to which it is a party and ratifying or resolving that it execute
                those
                Relevant Documents; and 

            


    

     

    
      	 	
              (ii)

            	
              if
                required authorising a specified person or persons to execute those
                Relevant Documents (and all documents and notices to be signed and/or
                despatched under those documents) on its
                behalf.

            


    

     

    
      	 	
              (d)

            	
              Officer's
                certificates A
                certificate of a duly authorised officer or representative of each
                Security Party certifying that each copy document relating to it
                specified
                in this Part I of Schedule 2 is correct, complete and in full force
                and
                effect as at a date no earlier than the date of this Agreement and
                setting
                out the names of the directors and officers of that Security Party
                (or its
                sole member or general partner) and the proportion of shares held
                by each
                shareholder.

            


    

     

    
      	 	
              (e)

            	
              Powers
                of attorney The
                notarially attested and legalised (where necessary for registration
                purposes) power of attorney of each Security Party under which any
                documents are to be executed or transactions undertaken by that Security
                Party.

            


    

     

    
       

      
        
          
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                                                2

                                              	
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          Security
                                                                            and related
                                                                            documents

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              


                                      

                                       

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              (a)

            	
              Vessel
                documents In
                respect of each Initial Vessel photocopies, certified as true, accurate
                and complete by a duly authorised representative of the Borrower,
                of any
                relevant Management Agreement together with all addenda, amendments
                or
                supplements. 

            


    

     

    
      	 	
              (b)

            	
              Evidence
                of Owner's title Evidence
                that on the Drawdown Date (i) each of the Initial Vessels will be
                registered under the flag stated in Schedule 7 in the ownership of
                the
                Owner and (ii) each of the relevant Mortgages will be capable of
                being
                registered against the Initial Vessels with first
                priority.

            


    

     

    
      	 	
              (c)

            	
              Evidence
                of insurance Evidence
                that each of the Initial Vessels is insured in the manner required
                by the
                Security Documents and that letters of undertaking will be issued
                in the
                manner required by the Security Documents, together with the written
                approval of the Insurances by an insurance adviser appointed by the
                Agent.

            


    

     

    
      	 	
              (d)

            	
              Security
                Documents The
                Security Documents (other than those relating to the Step-up Vessels),
                together with all other documents required by any of them, including,
                without limitation, all notices of assignment and/or charge and evidence
                that those notices will be duly acknowledged by the
                recipients.

            


    

     

    
      	 	
              (e)

            	
              Other
                Relevant Documents
                Copies of each of the Relevant Documents (other than those relating
                to the
                Step-up Vessels) not otherwise comprised in the documents listed
                in this
                Part I of Schedule 2.

            


    

     

    
      	
              3

            	
              Legal
                opinions

            


    

     

    If
      a
      Security Party is incorporated in a jurisdiction other than England and Wales
      or
      if any Finance Document is governed by the laws of a jurisdiction other than
      England and Wales, a legal opinion of the legal advisers to the Lenders in
      each
      relevant jurisdiction, substantially in the form provided to the Agent prior
      to
      the Drawdown Date or confirmation satisfactory to the Agent that such an opinion
      will be given.

     

    
      	
              4

            	
              Other
                documents and evidence

            


    

     

    
      	 	
              (a)

            	
              Drawdown
                Notice A
                duly completed Drawdown Notice.

            


    

     

    
      
        
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              (b)

            	
              Process
                agent Evidence
                that any process agent referred to in Clause 22.5 and any process
                agent
                appointed under any other Finance Document has accepted its
                appointment.

            


    

     

    
      	 	
              (c)

            	
              Other
                authorisations A
                copy of any other consent, licence, approval, authorisation or other
                document, opinion or assurance which the Agent considers to be necessary
                or desirable (if it has notified the Borrower accordingly) in connection
                with the entry into and performance of the transactions contemplated
                by
                any of the Relevant Documents or for the validity and enforceability
                of
                any of the Relevant Documents.

            


    

     

    
      	 	
              (d)

            	
              Fees
                Evidence
                that the fees, costs and expenses then due from the Borrower under
                Clause
                8 and Clause 9 have been paid or will be paid by the Drawdown
                Date.

            


    

     

    
      	 	
              (e)

            	
              "Know
                your customer" documents
                Such documentation and other evidence as is reasonably requested
                by the
                Agent in order for the Lenders to comply with all necessary "know
                your
                customer" or similar identification procedures in relation to the
                transactions contemplated in the Finance Documents. 

            


    

     

     

    


    
      
        
          
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    Part
      II: Conditions subsequent
      to the First Drawdown Date

    
       

      
        	
                1

              	
                
                  Evidence
                    of Owner's title  Certificate
                    of ownership and encumbrance (or equivalent) issued by the Registrar
                    of
                    Ships (or equivalent official) of each Initial Vessel's flag
                    state
                    confirming that (a) each of the Initial Vessels is permanently
                    registered
                    under that flag in the ownership of the Owner, (b) each of the
                    relevant
                    Mortgages has been registered with first priority against the
                    Initial
                    Vessels and (c) there are no further Encumbrances registered
                    against the
                    Initial Vessels.

                

              


      

      
         

        
          	
                  2

                	
                  Letters
                    of undertaking  Letters
                    of undertaking in respect of the Insurances as required by the
                    Security
                    Documents (other than those relating to the Step-up Vessels)
                    together with
                    copies of the relevant policies or cover notes or entry certificates
                    duly
                    endorsed with the interest of the Finance
                    Parties.

                


        

      

    

     

    
      
        
          	
                  3

                	
                  Acknowledgements
                    of notices  Acknowledgements
                    of all notices of assignment and/or charge given pursuant to
                    the Security
                    Documents (other than those relating to the Step-up
                    Vessels).

                


        

      

      
         

        
          
            
              	
                      4

                    	
                      Legal
                        opinions  Such
                        of the legal opinions specified in Part I of this Schedule
                        2 as have not
                        already been provided to the
                        Agent.

                    


            

          

          
             

            
              
                
                  	
                          5

                        	
                          Companies
                            Act registrations  Evidence
                            that the prescribed particulars of the Security Documents
                            have been
                            delivered to the Registrar of Companies of England and
                            Wales and (where
                            relevant) the appropriate registry in Singapore within
                            the statutory time
                            limit.

                        


                

              

              
                 

                
                  
                    
                      	
                              6

                            	
                              Confirmation
                                of class  Certificates
                                of Confirmation of Class for hull and machinery confirming
                                that each of
                                the Initial Vessels is classed with the highest class
                                applicable to
                                vessels of her type with a Pre-Approved Classification
                                Society.

                            


                    

                  

                  
                     

                    
                      
                        
                          	
                                  7

                                	
                                  Structure 
                                    Such
                                    documents and information as the Lenders may
                                    require to satisfy themselves
                                    as to the corporate structure of the Borrower
                                    and the
                                    Guarantor.

                                


                        

                      

                       

                    

                  

                

              

            

          

        

      

    

    


    
      
        
          
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    Part
      III: Conditions precedent to the Step-up Date

     

    
      	
              1

            	
              Security
                Parties

            


    

     

    
      	 	
              A
                certificate from a duly authorised officer or representative of the
                Borrower confirming that none of the documents delivered to the Agent
                pursuant to Schedule 2 Part I (a), (b), (c), (d) and (e) have been
                amended
                or modified in any way since the date of their delivery to the
                Agent.

            


    

     

    
      	
              2

            	
              Security
                and related documents

            


    

     

    
      	 	
              (a)

            	
              Vessel
                documents In
                respect of each Step-up Vessel photocopies, certified as true, accurate
                and complete by a duly authorised representative of the Borrower,
                of:

            


    

     

    
      	 	
              (i)

            	
              the
                Bareboat Charters and any relevant Head Charters;
                

            


    

     

    
      	 	
              (ii)

            	
              any
                relevant Management Agreement 

            


    

     

    together
      in each case with all addenda, amendments or supplements. 

     

    
      	 	
              (b)

            	
              Evidence
                of Owner's title Evidence
                that on the Step-up Date (i) the Step-up Vessels will be registered
                under
                the flag stated in Schedule 7 in the ownership of the Owner and (ii)
                each
                of the relevant Mortgages will be capable of being registered against
                the
                Step-up Vessels with first
                priority.

            


    

     

    
      	 	
              (c)

            	
              Evidence
                of insurance Evidence
                that each of the Step-up Vessels is insured in the manner required
                by the
                Security Documents and that letters of undertaking will be issued
                in the
                manner required by the Security Documents, together with the written
                approval of the Insurances by an insurance adviser appointed by the
                Agent.

            


    

     

    
      	 	
              (d)

            	
              Security
                Documents The
                Security Documents relating to the Step-up Vessels, together with
                all
                other documents required by any of them, including, without limitation,
                all notices of assignment and/or charge and evidence that those notices
                will be duly acknowledged by the
                recipients.

            


    

     

    
      	 	
              (e)

            	
              Charterer's
                Assignments
                The Charterer's Assignments, duly executed, together with evidence
                of the
                signing authority of the relevant Charterer and all notices of assignment
                and evidence that those notices have been or will be duly acknowledged
                by
                the recipient.

            


    

     

    
      
        
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              (f)

            	
              Quiet
                Enjoyment Letters
                Any relevant Quiet Enjoyment Letters, duly executed, together with
                evidence of the signing authority of the Bareboat
                Charterer.

            


    

     

    
      	 	
              (g)

            	
              Other
                Relevant Documents
                Copies of each of the Relevant Documents not otherwise comprised
                in the
                documents listed in Part I of Schedule 2 or this Part III of
                Schedule 2.

            


    

     

    
      	
              3

            	
              Legal
                opinions

            


    

     

    If
      a
      Security Party is incorporated in a jurisdiction other than England and Wales
      or
      if any Finance Document is governed by the laws of a jurisdiction other than
      England and Wales, a legal opinion of the legal advisers to the Lenders in
      each
      relevant jurisdiction, substantially in the form provided to the Agent prior
      to
      the Step-up Date or confirmation satisfactory to the Agent that such an opinion
      will be given.

     

    
      	
              4

            	
              Other
                documents and evidence

            


    

     

    
      	 	
              (a)

            	
              Process
                agent Evidence
                that any process agent appointed under any Finance Document relating
                to
                the Step-up Vessels has accepted its
                appointment.

            


    

     

    
      	 	
              (b)

            	
              Other
                authorisations A
                copy of any other consent, licence, approval, authorisation or other
                document, opinion or assurance which the Agent considers to be necessary
                or desirable (if it has notified the Borrower accordingly) in connection
                with the entry into and performance of the transactions contemplated
                by
                any of the Relevant Documents or for the validity and enforceability
                of
                any of the Relevant Documents.

            


    

     

    
      	 	
              (c)

            	
              Fees
                Evidence
                that the fees, costs and expenses then due from the Borrower under
                Clause
                8 and Clause 9 have been paid or will be paid by the Step-up
                Date.

            


    

     

    


    
      
        
          
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    Part
      IV: Conditions subsequent to the Step-up Date

    
       

      
        	
                1

              	
                Evidence
                  of Owner's title Certificate
                  of ownership and encumbrance (or equivalent) issued by the Registrar
                  of
                  Ships (or equivalent official) of each Step-up Vessel's flag state
                  confirming that (a) each of the Step-up Vessels is permanently
                  registered
                  under that flag in the ownership of the Owner, (b) each of the
                  relevant
                  Mortgages has been registered with first priority against the Step-up
                  Vessels and (c) there are no further Encumbrances registered against
                  the
                  Step-up Vessels.

              


      

      
         

        
          	
                  2

                	
                  Letters
                    of undertaking Letters
                    of undertaking in respect of the Insurances as required by the
                    Security
                    Documents relating to the Step-up Vessels together with copies
                    of the
                    relevant policies or cover notes or entry certificates duly endorsed
                    with
                    the interest of the Finance
                    Parties.

                


        

        
           

          
            	
                    3

                  	
                    Acknowledgements
                      of notices
                      Acknowledgements of all notices of assignment and/or charge
                      given pursuant
                      to the Security Documents relating to the Step-up
                      Vessels.

                  


          

          
             

            
              	
                      4

                    	
                      Legal
                        opinions Such
                        of the legal opinions specified in Part III of this Schedule
                        2 as have not
                        already been provided to the Agent.

                    


            

            
               

              
                	
                        5

                      	
                        Companies
                          Act registrations
                          Evidence that the prescribed particulars of the Security
                          Documents have
                          been delivered to the Registrar of Companies of England
                          and Wales and
                          (where relevant) the appropriate registry in Singapore
                          within the
                          statutory time limit.

                      


              

              
                 

                
                  	
                          6

                        	
                          Confirmation
                            of class
                            Certificates of Confirmation of Class for hull and machinery
                            confirming
                            that each of the Step-up Vessels is classed with the
                            highest class
                            applicable to vessels of her type with a Pre-Approved
                            Classification
                            Society.

                        


                

                 

              

            

          

        

      

    

     

    


    
      
        
          
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    SCHEDULE
      3: Calculation of Mandatory Cost

     

    
      
        
          
            
              	
                      
                        1

                      

                    	
                      
                        
                          The
                            Mandatory Cost is an addition to the interest rate to
                            compensate the 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.

                        

                      

                    


            

            
              
                 

              

            

          

          
            	
                    
                      (a)

                    

                  	
                    
                      On
                        the first day of each Interest Period (or as soon as possible
                        thereafter)
                        the Agent shall calculate, as a percentage rate, a rate (the
                        "Additional Cost Rate")
                        for each Lender in accordance with the paragraphs set out
                        below. The
                        Mandatory Cost will be calculated by the Agent as a weighted
                        average of
                        the Lenders' Additional Cost Rates (weighted in proportion
                        to the
                        percentage participation of each Lender in the
                        Loan) and will be expressed as a percentage rate per
                        annum.

                    

                  


          

          
            
               

              
                	
                        
                          (b)

                        

                      	
                        
                          
                            
                              The
                                Additional Cost Rate for any Lender lending from
                                an office in the
                                euro-zone will be the percentage notified by that
                                Lender to the Agent to
                                be its reasonable determination of the cost (expressed
                                as a percentage of
                                that Lender's participation in the Loan)
                                of complying with the minimum reserve requirements
                                of the European Central
                                Bank as a result of participating in the
                                Loan from that
                                office.

                            

                          

                        

                      


              

              
                 

              

            

            
              
                	
                        (c)

                      	
                        
                          The
                            Additional Cost Rate for any Lender lending from an office
                            in the United
                            Kingdom will be calculated by the Agent as
                            follows:

                        

                      


              

               

              
                             
F x 0.01
                  per cent
                  per annum

              

            

          

        

      

    

      300

     

    
      
        
          
            	
                     

                  	
                    
                      
                        where
                          F is the charge payable by that Lender to the Financial
                          Services Authority
                          under paragraph 2.02 or 2.03 (as appropriate) of the Fees
                          Regulations or
                          the equivalent provisions in any replacement regulations
                          (with, for this
                          purpose, the figure for the minimum amount in paragraph
                          2.02b or such
                          equivalent provision deemed to be zero), expressed in pounds
                          per £1
                          million of the fee base of that
                          Lender.

                      

                    

                  


          

        

      

    

     

    
      
        
          
            
              
                	
                        
                          2

                        

                      	
                        
                          
                            For
                              the purpose of this
                              Schedule:

                          

                        

                      


              

              
                
                   

                

              

            

          

        

      

    

    
      	 	
              (a)

            	
              "eligible
                liabilities"
                and "special deposits"
                have the meanings given to them at the time of application of the
                formula
                by the Bank of England;

            


    

     

    
      	 	
              (b)

            	
              "fee base"
                has the meaning given to it in the Fees
                Regulations;

            


    

     

    
      
        
          \P1\3549672.7

        

      

      
        81

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (c)

            	
              "Fees
                Regulations"
                means the regulations governing 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.

            


    

     

    
      	
              3

            	
              If
                a Lender does not supply the information required by the Agent to
                determine its Additional Cost Rate when requested to do so, the applicable
                Mandatory Cost shall be determined on the basis of the information
                supplied by the remaining Lenders.

            


    

     

    
      	
              4

            	
              If
                a change in circumstances has rendered, or will render, the formula
                inappropriate, the Agent shall notify the Borrower of the manner
                in which
                the Mandatory Cost will subsequently be calculated. The manner of
                calculation so notified by the Agent shall, in the absence of manifest
                error, be binding on the Borrower.

            


    

     

    


     

    


    
      
        
          
            \P1\3549672.7

          

        

        
          82

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      4: Form of Drawdown Notice

     

    
      	
              To:

            	
              DnB
                NOR Bank ASA

            


    

    


    


    From: Teekay
      Offshore Operating L.P.

                                                                                                            [Date]

    


    Dear
      Sirs,

     

    Drawdown
      Notice

     

    We
      refer
      to the Loan Agreement dated 2006 made between, amongst others, ourselves and
      yourselves (the "Agreement").

     

    Words
      and
      phrases defined in the Agreement have the same meaning when used in this
      Drawdown Notice. 


       

      Pursuant
        to Clause 4.1 of the Agreement, we irrevocably request that you advance
a
        Drawing
        in the sum of [ ]
        to us
        on 200 , which is a Business Day, by
        paying
        the amount of the advance to [ ].


     

    We
      warrant that the representations and warranties contained in Clause 11.1 of
      the
      Agreement are true and correct at the date of this Drawdown Notice and will
      be
      true and correct on 200 , that no Default has occurred and is continuing, and
      that no Default will result from the advance of the sum requested in this
      Drawdown Notice.


       

      We
        select
        the period of [ ] months as the
        Interest Period
        in
        respect of the said Drawing.


     

    Yours
      faithfully

    


    


    .......................

    For
      and
      on behalf of

    Teekay
      Offshore Operating L.P.

     

    


    
      
        
          
            \P1\3549672.7

          

        

        
          83

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      5: Form of Transfer Certificate

     

    To:
       DnB
      NOR
      Bank ASA

    TRANSFER
      CERTIFICATE

     


      This
        transfer certificate relates to a secured loan facility agreement (as from
        time
        to time amended, varied, supplemented or novated
        the "Loan
        Agreement")
        dated
  
        2006, on
        the terms and subject to the conditions of which a secured revolving
        credit facility was
        made
        available to Teekay Offshore Operating L.P., by a syndicate of banks on whose
        behalf you act as agent and security agent.


     

    
       

      
        	
                1

              	
                Terms
                  defined in the Loan Agreement shall, unless otherwise expressly
                  indicated,
                  have the same meaning when used in this certificate. The terms
                  "Transferor"
                  and "Transferee"
                  are defined in the schedule to this
                  certificate.

              


      

      
         

        
          	
                  2

                	
                  
                    The
                      Transferor:

                  

                


        

         

      

    

    
      	 	
              2.1

            	
              confirms
                that the details in the Schedule under the heading "Transferor's
                Commitment"
                accurately summarise its Commitment;
                and 

            


    

     

    
      	 	
              2.2

            	
              requests
                the Transferee to accept by way of novation the transfer to the Transferee
                of the amount of the Transferor’s Commitment specified in the Schedule by
                counter-signing and delivering this certificate to the Agent at its
                address for communications specified in the Loan
                Agreement.

            


    

     

    
      
        	
                3

              	
                
                  The
                    Transferee requests the Agent to accept this certificate as being
                    delivered to the Agent pursuant to and for the purposes of clause
                    14.4 of
                    the Loan Agreement so as to take effect in accordance with the
                    terms of
                    that clause on the Transfer Date specified in the
                    Schedule.

                

              


      

      
         

        
          	
                  4

                	
                  
                    The
                      Agent confirms its acceptance of this certificate for the purposes
                      of
                      clause 14.4 of the Loan
                      Agreement.

                  

                


        

        
           

          
            	
                    5

                  	
                    
                      The
                        Transferee confirms that:

                    

                  


          

           

          
            
              	 	
                      5.1 

                    	
                      it
                        has received a copy of the Loan Agreement together with all
                        other
                        information which it has required in connection with this
                        transaction;
                        

                    


            

            
               

              
                
                  
                    \P1\3549672.7

                  

                

                
                  84

                  
                    

                  

                

                
                  
                  

                

                 

              

              
                	 	
                        5.2 

                      	
                        it
                          has not relied and will not in the future rely on the Transferor
                          or any
                          other party to the Loan Agreement to check or enquire on
                          its behalf into
                          the legality, validity, effectiveness, adequacy, accuracy
                          or completeness
                          of any such information; and

                      


              

              
                 

                
                  	 	
                          5.3 

                        	
                          it
                            has not relied and will not in the future rely on the
                            Transferor or any
                            other party to the Loan Agreement to keep under review
                            on its behalf the
                            financial condition, creditworthiness, condition, affairs,
                            status or
                            nature of any Security
                            Party.

                        


                

              

            

          

        

      

    

    
       

      
        	
                6

              	
                Execution
                  of this certificate by the Transferee constitutes its representation
                  and
                  warranty to the Transferor and to all other parties to the Loan
                  Agreement
                  that it has the power to become a party to the Loan Agreement as
                  a Lender
                  on the terms of the Loan Agreement and has taken all steps to authorise
                  execution and delivery of this certificate.


              


      

      
         

        
          	
                  7

                	
                  The
                    Transferee undertakes with the Transferor and each of the other
                    parties to
                    the Loan Agreement that it will perform in accordance with their
                    terms all
                    those obligations which by the terms of the Loan Agreement will
                    be assumed
                    by it after delivery of this certificate to the Agent and the
                    satisfaction
                    of any conditions subject to which this certificate is expressed
                    to take
                    effect.

                


        

        
           

          
            	
                    8

                  	
                    The
                      Transferor makes no representation or warranty and assumes
                      no
                      responsibility with respect to the legality, validity, effectiveness,
                      adequacy or enforceability of any Finance Document or any document
                      relating to any Finance Document, and assumes no responsibility
                      for the
                      financial condition of any Finance Party or for the performance
                      and
                      observance by any Security Party of any of its obligations
                      under any
                      Finance Document or any document relating to any Finance Document
                      and any
                      conditions and warranties implied by law are expressly
                      excluded.

                  


          

          
             

            
              	
                      9

                    	
                      The
                        Transferee acknowledges that nothing in this certificate
                        or in the Loan
                        Agreement shall oblige the Transferor to:


                    


            

             

          

        

      

    

    
      	 	
              9.1

            	
              accept
                a re-transfer from the Transferee of the whole or any part of the
                rights,
                benefits and/or obligations transferred pursuant to this certificate;
                or
                

            


    

     

    
      	 	
              9.2

            	
              support
                any losses directly or indirectly sustained or incurred by the Transferee
                for any reason including, without limitation, the non-performance
                by any
                party to any Finance Document of any obligations under any Finance
                Document.

            


    

     

    
      
        
          \P1\3549672.7

        

      

      
        85

        
          

        

      

      
        
        

      

       

    

    
      	
              10

            	
              The
                address and fax number of the Transferee for the purposes of clause
                18 of
                the Loan Agreement are set out in the
                Schedule.

            


    

     

    
      
        	
                11

              	
                This
                  certificate may be executed in any number of counterparts each
                  of which
                  shall be original but which shall together constitute the same
                  instrument.

              


      

      
         

        
          	
                  12

                	
                  This
                    certificate shall be governed by and interpreted in accordance
                    with
                    English law.

                


        

         

         

      

    

    THE SCHEDULE

    
       

      
        	
                1

              	
                Transferor:

              


      

      
         

        
          	
                  2

                	
                  Transferee:

                


        

        
           

          
            	
                    3

                  	
                    
                      Transfer
                        Date
                        (not earlier that the fifth Business Day after the date of
                        delivery of the
                        Transfer Certificate to the
                        Agent):

                    

                  


          

          
             

            
              	
                      4

                    	
                      Transferor’s
                        Commitment:

                    


            

            
               

              
                	
                        5

                      	
                        
                          Amount
                            transferred:

                        

                      


              

              
                 

                
                  	
                          6

                        	
                          
                            Transferee’s
                              address and fax number for the purposes of clause 18
                              of the Loan
                              Agreement:

                          

                        


                

                 

              

            

          

        

      

    

    [name
      of Transferor]    [name
      of Transferee]

    


    By:                                                                        
      By:

    


    Date:                                                                     
      Date:

    


    


    


    DnB
      NOR Bank ASA
      as
      Agent

    


    By:
      

    


    Date:
      

    


     

    


    
      
        
          
            \P1\3549672.7

          

        

        
          86

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      6: Form of Compliance Certificate 

     

    To: DnB
      NOR Bank ASA

    


    From: Teekay
      Offshore Operating L.P.

    


    Dated: 

    


    Dear
      Sirs

    Teekay
      Offshore Operating L.P. Loan Agreement dated
      [                                   ]
      (the "Agreement")

     

    
      	
              1.

            	
              We
                refer to the Agreement. This is a Compliance Certificate. Terms defined
                in
                the Agreement have the same meaning when used in this Compliance
                Certificate unless given a different meaning in this Compliance
                Certificate.

            


    

     

    2. We
      confirm that as at the date of this certificate: 

    


    
      	 	
              2.1

            	
              we
                maintain a Free Liquidity together with undrawn committed revolving
                credit
                lines available to us (including under the Loan Agreement but excluding
                undrawn committed revolving credit lines with less than six (6) months
                to
                maturity) of not less than seventy five million Dollars ($75,000,000);
                and

            


    

    


    
      	 	
              2.2

            	
              the
                aggregate of the Free Liquidity and undrawn committed revolving credit
                lines available to be drawn by us (including under the Loan Agreement,
                but
                excluding undrawn committed revolving credit lines with less than
                six (6)
                months to maturity) is not less than five per cent (5%) of our Total
                Debt.

            


    

     

    3. We
      confirm that no Default is continuing.* 

    


    
      	
              Signed:

            	
              .....................

            
	 	
              Duly
                authorised representative

            
	 	
              of

            
	 	
              Teekay
                Offshore Operating L.P.

            


    

     

     

    
      

      
        *  If
          this
          statement cannot be made, the certificate should identify any Default that
          is
          continuing and the steps, if any, being taken to remedy
          it.]

      

    

     

    


    
      
        
          
            \P1\3549672.7

          

        

        
          87

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      7: The Vessels

     

    Part
      I: The Initial Vessels 

     

    
      	
              Vessel

            	
              Flag

            	
              Bareboat
                Charter (where relevant)

               

            
	
              Fuji
                Spirit

            	
              Bahamas

            	 
	
              Gotland
                Spirit

            	
              Bahamas

            	 
	
              Hamane
                Spirit

            	
              Bahamas

            	 
	
              Kilimanjaro
                Spirit

            	
              Bahamas

            	 
	
              Leyte
                Spirit

            	
              Bahamas

            	 
	
              Luzon
                Spirit

            	
              Bahamas

            	 
	
              Navion
                Fennia

            	
              Bahamas

            	 
	
              Navion
                Torinita

            	
              Bahamas

            	 
	
              Nordic
                Marita 

            	
              Bahamas

            	 
	
              Navion
                Svenita

            	
              Bahamas

            	 
	
              Poul
                Spirit

            	
              Bahamas

            	 
	
              Torben
                Spirit

            	
              Bahamas

            	 


    

    


    


    
      
        
          
            \P1\3549672.7

          

        

        
          88

          
            

          

        

        
          
          

        

      

    

    


    Part
      II: The Step-up Vessels

     

    
      	
              Vessel

            	
              Flag

            	
              Bareboat
                Charter (where relevant)

               

            
	
              Basker
                Spirit

            	
              Bahamas

            	 
	
              Navion
                Stavanger 

            	
              Bahamas

            	
              Bareboat
                Charter dated 16 January 2006 granted by TKN as charterer in favour
                of FIC
                and Transpetro as bareboat charterers.

            
	
              Nordic
                Brasilia

            	
              Bahamas

            	
              Bareboat
                Charter dated 26 August 2003 granted by UNS as charterer in favour
                of FIC
                and Transpetro as bareboat charterers;

            
	
              Nordic
                Savonita

            	
              NIS

            	 
	
              Nordic
                Spirit

            	
              Bahamas

            	
              Bareboat
                Charter dated 5 August 2002 granted by UNS as charterer in favour
                of FIC
                and Transpetro as bareboat charterers;

            
	
              Petroatlantic

            	
              Bahamas

            	
              Bareboat
                Charter dated 19 June 2000 between UNS as original owner and Petrojarl
                Production (in its former name of PGS Production AS) as bareboat
                charterer
                as transferred pursuant to a transfer agreement dated 23 August 2004
                entered into between UNS as original owner, Petroatlantic as new
                owner,
                Petrojarl Production as bareboat charterer and Petroleum Geo as guarantor
                (with Petrojarl having replaced Petroleum Geo as guarantor by a release
                and replacement agreement dated 22 March 2006) as further transferred
                to
                the Owner by a deed of assignment dated on or about the date hereof
                between Petroatlantic, the Owner, Petrojarl Production and
                Petrojarl;

            
	
              Petronordic

            	
              Bahamas

            	
              Bareboat
                Charter dated 19 June 2000 between UNS as original owner and Petrojarl
                Production (in its former name of PGS Production AS) as bareboat
                charterer
                as transferred pursuant to a transfer agreement dated 23 August 2004
                entered into between UNS as original owner, Petronordic as new owner,
                Petrojarl Production as bareboat charterer and Petroleum Geo as guarantor
                (with Petrojarl having replaced Petroleum Geo as guarantor by a release
                and replacement agreement dated 22 March 2006) as further transferred
                to
                the Owner by a deed of assignment dated on or about the date hereof
                between Petronordic, the Owner, Petrojarl Production and
                Petrojarl;

            


    

    


    


    
      
        
          
            \P1\3549672.7

          

        

        
          89

          
            

          

        

        
          
          

        

      

    

    


    SCHEDULE
      8: Reductions

     

    
      	
              Reduction
                Dates

              (months
                after the earlier to occur of (i) the First Drawdown Date and
                (ii)

              31
                October 2006)

            	
              Reductions

            	
              Committed
                amount

            	
              Initial
                Reduction Amounts

            
	
              0

            	 	
              $940,000,000

            	
              0

            
	
              6

            	
              1st
                reduction

            	
              $910,902,375

            	
              $29,097,625

            
	
              12

            	
              2nd
                reduction

            	
              $880,909,998

            	
              $29,992,377

            
	
              18

            	
              3rd
                reduction

            	
              $849,995,355

            	
              $30,914,643

            
	
              24

            	
              4th
                reduction

            	
              $818,130,088

            	
              $31,865,267

            
	
              30

            	
              5th
                reduction

            	
              $785,284,963

            	
              $32,845,125

            
	
              36

            	
              6th
                reduction

            	
              $751,429,850

            	
              $33,855,113

            
	
              42

            	
              7th
                reduction

            	
              $716,533,693

            	
              $34,896,157

            
	
              48

            	
              8th
                reduction

            	
              $680,564,479

            	
              $35,969,214

            
	
              54

            	
              9th
                reduction

            	
              $643,489,212

            	
              $37,075,267

            
	
              60

            	
              10th
                reduction

            	
              $605,273,880

            	
              $38,215,332

            
	
              66

            	
              11th
                reduction

            	
              $565,883,427

            	
              $39,390,453

            
	
              72

            	
              12th
                reduction

            	
              $525,281,718

            	
              $40,601,709

            
	
              78

            	
              13th
                reduction

            	
              $483,431,505

            	
              $41,850,213

            
	
              84

            	
              14th
                reduction

            	
              $440,294,399

            	
              $43,137,106

            
	
              90

            	
              15th
                reduction

            	
              $395,830,827

            	
              $44,463,572

            
	
              96

            	
              16th
                reduction

            	
              $350,000,000

            	
              $45,830,827

            


    

    


    


    
      
        
          
            \P1\3549672.7

          

        

        
          90

          
            

          

        

        
          
          

        

      

    

    


    IN
      WITNESS
      of which
      the parties to this Agreement have executed this Agreement the day and year
      first before written.

     

    
      
        
          
            
              
                	SIGNED
                        by                       	 )	
                            

                      


              

              
                	duly
                        authorised for and on
                        behalf                                	 )	
                        [signed]    

                      


              

              
                	of
                        TEEKAY
                        OFFSHORE                                              	 )	
                            

                      


              

              
                	OPERATING
                        L.P.                         	 )	
                            

                      


              

            

             

             

          

        

      

    

    
      	SIGNED
              by                       	 )	
                  

            


    

    
      	duly
              authorised for and on
              behalf                                	 )	
              [signed]    

            


    

    
      	of
              DNB
              NOR BANK ASA
              (as a
              Lender)                        	 )	
                  

            


    

     

    
       

      
        
          
            
              
                
                  	SIGNED
                          by                       	 )	
                              

                        


                

                
                  	duly
                          authorised for and on
                          behalf                                	 )	
                          [signed]    

                        


                

                
                  	
                          of
                            NORDEA
                            BANK NORGE ASA 

                        	 )	
                              

                        


                

                
                  	(as
                          a
                          Lender)        	 )	
                              

                        


                

              

               

               

              
                
                  
                    
                      
                        
                          	SIGNED
                                  by        	 )	
                                      

                                


                        

                        
                          	duly
                                  authorised for and on behalf	 )	
                                  [signed]    

                                


                        

                        
                          	
                                  of
FORTIS
                                    CAPITAL CORP. 

                                	 )	
                                      

                                


                        

                        
                          	(as
                                  a Lender)    	 )	
                                      

                                


                        

                      

                       

                    

                  

                

              

            

          

        

      

    

    
       

      
        
          
            
              
                
                  	SIGNED
                          by        	 )	
                              

                        


                

                
                  	
                          duly
                            authorised for and on behalf  

                        	 )	
                          [signed]    

                        


                

                
                  	
                          of
DEUTSCHE
                            SCHIFFSBANK 

                        	 )	
                              

                        


                

                
                  	
                          AKTIENGESELLSCHAFT     

                        	 )	
                              

                        


                

              

              
                	
                        (as
                          a Lender) 

                      	 )	
                            

                      



            

          

        

      

    

     

    
      
        
          \P1\3549672.7

        

      

      
        91

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  	
                          SIGNED
                            by       

                        	 )	
                              

                        


                

                
                  	
                          duly
                            authorised for and on behalf   

                        	 )	
                          [signed]    

                        


                

                
                  	
                          
                            of
                              LANDESBANK HESSEN-THURINGEN 

                          

                        	 )	
                              

                        


                

                
                  	GIROZENTRALE     	 )	
                              

                        


                

              

              
                	
                        (as
                          a Lender) 

                      	 )	
                            

                      


              

            

          

        

      

    

     

    
       

      
        	SIGNED
                by                       	 )	
                    

              


      

      
        	duly
                authorised for and on
                behalf                                	 )	
                [signed]    

              


      

      
        	of
                DNB
                NOR BANK ASA
                (as a
                Agent)                        	 )	
                    

              


      

       

    

     

    
      
        
          
            
              
                	SIGNED
                        by       	 )	
                            

                      


              

              
                	duly authorised for
                        and on
                        behalf   	 )	
                        [signed]    

                      


              

              
                	
                        of
DEUTSCHE
                          SCHIFFSBANK  

                      	 )	
                            

                      


              

              
                	 AKTIENGESELLSCHAFT     	 )	
                            

                      


              

            

            
              	 (as
                      the Security Agent)   	 )	
                          

                    


            

          

        

      

    

     

    
      
         

        
          	SIGNED
                  by                       	 )	
                      

                


        

        
          	duly
                  authorised for and on
                  behalf                                	 )	
                  [signed]    

                


        

        
          	of
                  DNB
                  NOR BANK ASA
                  (as an
                  MLA)                        	 )	
                      

                


        

         

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	SIGNED
                                by       	 )	
                                    

                              


                      

                      
                        	duly authorised
                                for and on
                                behalf   	 )	
                                [signed]    

                              


                      

                      
                        	
                                of
NORDEA
                                  BANK NORGE ASA 

                              	 )	
                                    

                              


                      

                      
                        	(as
                                an MLA)     	 )	
                                    

                              


                      

                    

                     

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	SIGNED
                          by    	 )	
                              

                        


                

                
                  	duly authorised
                          for and on
                          behalf 	 )	
                          [signed]    

                        


                

                
                  	
                          of
FORTIS
                            CAPITAL CORP. 

                        	 )	
                              

                        


                

                
                  	(as
                          an MLA)     	 )	
                              

                        


                

              

               

              
                
                  
                    \P1\3549672.7

                  

                

                
                  92

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	SIGNED
                          by       	 )	
                              

                        


                

                
                  	duly authorised
                          for and on
                          behalf  	 )	
                          [signed]    

                        


                

                
                  	
                          of
DNB
                            NOR BANK ASA 

                        	 )	
                              

                        


                

                
                  	(as
                          a bookrunner)     	 )	
                              

                        


                

              

               

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	SIGNED
                          by       	 )	
                              

                        


                

                
                  	duly authorised
                          for and on
                          behalf   	 )	
                          [signed]    

                        


                

                
                  	
                          of
NORDEA
                            BANK NORGE ASA 

                        	 )	
                              

                        


                

                
                  	(as
                          a bookrunner)     	 )	
                              

                        


                

              

               

            

          

        

      
 

    
      
        
          
            \P1\3549672.7

          

        

        
          93