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                                                                   EXHIBIT 10.13

THIS AGREEMENT is dated 21st December, 2001 between:

(1)   NAVIERA TEEKAY GAS IV S.L., (formerly Naviera F. Tapias Gas IV S.A.) a
      company organised and existing under the laws of Spain, whose registered
      office is at C/Musgo n degrees .5, 2 degrees Plta., LA FLORIDA, 28023
      Madrid (the "BORROWER");

(2)   THE FINANCIAL INSTITUTIONS listed in Schedule 1 as banks (the "BANKS");

(3)   J.P. MORGAN EUROPE LIMITED (formerly Chase Manhattan International
      Limited) as agent (the "AGENT");

(4)   J.P. MORGAN BANK S.A., (formerly The Chase Manhattan Bank CMB S.A.) in its
      capacity as Spanish Security Agent (the "SPANISH SECURITY AGENT");

(5)   JPMORGAN CHASE BANK, N.A. and COMMERZBANK AKTIENGESELLSCHAFT and CALYON
      (formerly Credit Agricole Indosuez) as swap banks (each in such capacity,
      a "SWAP BANK"); and

(6)   J. P. MORGAN plc as lead arranger (the "ARRANGER").

IT IS AGREED as follows:

1.    INTERPRETATION

1.1   DEFINITIONS

      In this Agreement:

      "AFFILIATE"

      means a Subsidiary or a Holding Company of a person or any other
      Subsidiary of that Holding Company.

      "AGENT'S SPOT RATE OF EXCHANGE"

      means, in relation to any currency (other than euros) in which any payment
      is made under this Agreement or any other Finance Document (the "RELEVANT
      CURRENCY"), the Agent's spot rate of exchange for the purchase of euros in
      the London foreign exchange market with the relevant currency on or about
      11.00 a.m. on the day the payment is received or on the next Business Day.

      "AIE"

      means an economic grouping ("Agrupacion de Interes Economico") organised
      and existing under the laws of Spain, which will step into the
      Shipbuilding Contract in place of the SPC by way of novation at the
      implementation of Stage Two.

      "APPLICABLE LAW"

      means, as the context may require, all or any laws, statutes,
      proclamations, treaties, bylaws, directives, regulations, statutory
      instruments, rules, orders, decisions, circulars, codes, decrees,
      injunctions, resolutions, judgments, rules of court, delegated or
      subordinate legislation, rules of common law or any European Union
      legislation at any time or from time

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                                       2

      to time in force in the country in which any Party is incorporated or in
      which the Vessel may be located and which are or may become applicable to
      this Agreement, any Finance Document or document referred to in this
      Agreement, and have force of law, as the same may be subjected to any
      Change in Law from time to time.

      "APPROVED VALUERS"

      means each of Poten & Partners, H Clarkson & Company Limited, Braemar Ship
      Brokers Limited, Seascope Shipping, R.S. Platou Shipbrokers a.s. and such
      other independent reputable valuers agreed between the Agent (acting in
      accordance with the instructions of the Majority Banks) and the Borrower
      from time to time.

      "BALLOON AMOUNT"

      means euro 40,000,000.

      "BAREBOAT CHARTER"

      means the bareboat charter which the Borrower and the AIE will enter into
      on the implementation of Stage Two in the form annexed to the Memorandum
      of Agreement as Appendix 4 to that document.

      "BAREBOAT CHARTER ASSIGNMENT"

      means the assignment of the Bareboat Charter to be granted in favour of
      the Agent by the Borrower upon implementation of Stage Two, together with
      any and all notices and acknowledgements entered into in connection
      therewith.

      "BUILDER"

      means Izar, Construcciones Navales, S.A., a corporation organised and
      existing under the laws of Spain with its registered office at Paseo de la
      Castellana, 55, 28046 Madrid, Spain.

      "BUSINESS DAY"

      means a day (other than a Saturday or a Sunday) on which banks are open
      for business in London and Madrid and which is also a TARGET day.

      "CAPITAL COSTS SIDE LETTER"

      means the side letter to the Time Charter entered into on or about the
      date of this Agreement between the Time Charterer and the Borrower
      pursuant to which the parties agree to the charterhire under the Time
      Charter being adjusted in accordance with the provisions of Exhibit F of
      that document, subsequent to closing of the Swap Agreement.

      "CHANGE IN LAW"

      means the application to any person of any Applicable Law, which did not
      apply to such person prior to the date of this Agreement, or, after the
      date of this Agreement, any change (whether with immediate, prospective or
      retrospective effect) in, or any change in the practice of application of
      any Applicable Law (including, without limitation, any Applicable Law
      ceasing to apply, being withdrawn or not being renewed, becoming effective
      or being varied and any change in interpretation of any Applicable Law by
      any competent authority).

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                                       3

      "CHARTER"

      means any charter or other contract for the employment of the Vessel which
      may be entered into by the Borrower with a Charterer in accordance with
      the terms and conditions of this Agreement, including, but not limited to,
      the Time Charter.

      "CHARTERER"

      means the Time Charterer or any charterer of the Vessel from time to time.

      "COMMITMENT"

      means:

      (a)   in relation to an Existing Bank (as defined in Clause 27.2
            (Transfers by Banks)) which is a Bank on the date of this Agreement,
            the amount in euros set opposite its name in Schedule 1 and the
            amount of any other Bank's Commitment acquired by it under Clause 27
            (Changes to the Parties); and

      (b)   in relation to a New Bank (as defined in Clause 27.2 (Transfers by
            Banks)) which becomes a Bank after the date of this Agreement, the
            amount of any other Bank's Commitment acquired by it under Clause 27
            (Changes to the Parties),

      to the extent not cancelled, reduced or transferred under this Agreement.

      "COMMITMENT PERIOD"

      means the period from the date of this Agreement up to and including the
      Delivery Date.

      "DATE OF TOTAL LOSS"means the date of Total Loss of the Vessel which date
      shall be deemed to have occurred:

      (a)   in the case of an actual total loss, on the actual date and at the
            time the Vessel was lost or, if such date is not known, on the date
            on which the Vessel was last reported;

      (b)   in the case of a constructive total loss, upon the date and at the
            time notice of abandonment is given to the insurers for the time
            being (provided a claim for total loss is admitted by such insurers)
            or, if such insurers do not forthwith admit such a claim, at the
            date and at the time at which either a total loss is subsequently
            admitted by the insurers or a total loss is subsequently adjudged by
            a competent court of law or arbitration tribunal to have occurred;

      (c)   in the case of a compromised or arranged total loss, on the date
            upon which a binding agreement as to such compromised or arranged
            total loss has been entered into by the insurers;

      (d)   in the case of requisition for title or other compulsory
            acquisition, on the date upon which the relevant requisition for
            title or other compulsory acquisition occurs; and

      (e)   in the case of capture, seizure, arrest, detention, requisition for
            hire or confiscation by any government or by persons acting or
            purporting to act on behalf of any government which deprives the
            Borrower or, as the case may be, any Charterer of the

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                                       4

            use of the Vessel for more than 60 days, upon the expiry of the
            period of 60 days after the date upon which the relevant capture,
            seizure, arrest, detention or confiscation occurred.

      "DEED OF ACCESSION"

      means a deed of accession substantially in the form of Schedule 11 (Form
      of Deed of Accession).

      "DEED OF MAINTENANCE GUARANTEE"

      means a deed of maintenance guarantee to be issued by the Builder in
      favour of the Borrower on the Delivery Date.

      "DEED OF MAINTENANCE GUARANTEE ASSIGNMENT"

      means the assignment of the Deed of Maintenance Guarantee to be granted in
      favour of the Agent by the Borrower upon delivery of the Vessel, together
      with any and all notices and acknowledgement entered into in connection
      therewith.

      "DEFAULT"

      means an Event of Default or a Potential Event of Default.

      "DELIVERY DATE"

      means the date of actual delivery of the Vessel to the Borrower under the
      terms of the Sales Contract and the Shipbuilding Contract (if Stage One is
      then in effect) or, as the case may be, the terms of the Bareboat Charter
      (if Stage Two is then in effect) or, as the case may be, the Shipbuilding
      Contract (if neither Stage One nor Stage Two is then in effect).

      "DELIVERY DATE INSTALMENT"

      means the amount due and payable by the Borrower in accordance with the
      Schedule of Payments to the Memorandum of Agreement three banking days
      prior to the Delivery Date.

      "DISBURSEMENT ACCOUNT"

      means an account in the name of the Borrower opened and maintained with
      JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank, London branch)
      with the account number 24511501 into which payments will be made in
      accordance with Clause 17.34 (Disbursement Account) and proceeds of
      Tranches may be paid by the Agent from time to time in accordance with the
      provisions of the Finance Agreement.

      "DOLLARS" or "US$"

      means the lawful currency for the time being of the United States of
      America.

      "DRAWDOWN DATE"

      means the date of the advance of a Tranche.

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                                       5

      "EARNINGS"

      means all present and future moneys and claims which are earned by or
      become payable to or for the account of the Borrower in connection with
      the operation or ownership of the Vessel and including but not limited to:

      (a)   freights, passage and hire moneys (whether earned under any Charter
            or otherwise);

      (b)   remuneration for salvage and towage services;

      (c)   demurrage and detention moneys;

      (d)   all present and future moneys and claims payable to the Borrower in
            respect of any breach or variation of a Charter in respect of the
            Vessel (other than moneys, if any, which represent agreed
            reimbursement by a Charterer of costs and expenses incurred by the
            Borrower in connection with such Charter); and

      (e)   all moneys and claims in respect of the requisition for hire of the
            Vessel.

      "EARNINGS ACCOUNT"

      means an account or accounts in the name of the Borrower opened and
      maintained with JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase Bank,
      London Branch) with the account number 24511502.

      "EARNINGS ACCOUNT ASSIGNMENT"

      means the assignment of the Earnings Account granted or to be granted in
      favour of the Agent by the Borrower together with any and all notices and
      acknowledgments entered into in connection therewith.

      "ENVIRONMENT"

      means:

      (a)   any land including, without limitation, surface land and sub-surface
            strata, sea bed or river bed under any water (as referred to below)
            and any natural or man-made structures;

      (b)   water including, without limitation, coastal and inland waters,
            surface waters, ground waters and water in drains and sewers; and

      (c)   air including, without limitation, air within buildings and other
            natural or man-made structures above or below ground.

      "ENVIRONMENTAL AFFILIATE"

      means any Affiliate of either of the Borrower or any other Manager
      together with their employees and sub-contractors.

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                                       6

      "ENVIRONMENTAL APPROVALS"

      means any permit, licence, approval, ruling, variance, exemption or other
      authorisation required under applicable Environmental Laws.

      "ENVIRONMENTAL CLAIM"

      means any claim by any person or persons or any governmental, judicial or
      regulatory authority which arises out of any allegation of any breach,
      contravention or violation of Environmental Law or of the existence of any
      liability or potential liability arising from such breach, contravention
      or violation or the presence of Hazardous Material. In this context
      "claim" means a claim for damages, compensation, fines, penalties or any
      other payment of any kind whether or not similar to the foregoing; an
      order or direction to take, or not to take, certain action or to desist
      from or suspend certain action; and any form of enforcement or regulatory
      action.

      "ENVIRONMENTAL LAWS"

      means any or all applicable law (whether civil, criminal or
      administrative), common law, statute, statutory instrument, treaty,
      convention, regulation, directive, by-law, demand, decree, ordinance,
      injunction, resolution, order, judgment, rule, permit, licence or
      restriction (in each case having the force of law) and codes of practice
      or conduct, circulars and guidance notes having legal or judicial import
      or effect, in each case of any government, quasi-government,
      supranational, federal, state or local government, statutory or regulatory
      body, court, agency or association in any applicable jurisdiction relating
      to or concerning:

      (a)   pollution or contamination of the Environment, any ecological system
            or any living organisms which inhabit the Environment or any
            ecological system;

      (b)   the generation, manufacture, processing, distribution, use
            (including abuse), treatment, storage, disposal, transport or
            handling of Hazardous Materials; and

      (c)   the emission, leak, release, spill or discharge into the Environment
            of noise, vibration, dust, fumes, gas, odours, smoke, steam
            effluvia, heat, light, radiation (of any kind), infection,
            electricity or any Hazardous Material and any matter or thing
            capable of constituting a nuisance or an actionable tort or breach
            of statutory duty of any kind in respect of such matters,

      including, without limitation, the following laws of the United States of
      America: the Comprehensive Environmental Response, Compensation and
      Liability Act of 1980, as amended, the Hazardous Materials Transportation
      Act, as amended, the Oil Pollution Act of 1990, as amended, the Resource
      Conservation and Recovery Act, as amended, and the Toxic Substances
      Control Act, as amended, together, in each case, with the regulations
      promulgated and the guidance issued pursuant thereto.

      "ENVIRONMENTAL PERMITS"

      means all or any permits, licences, consents, approvals, certificates,
      registrations, and other authorisations and the filing of all
      notifications, reports and assessments required under any Environmental
      Law for the operation of the Vessel or the carriage of cargo therein or
      otherwise applicable to the Vessel.

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                                       7

      "EQUITY CONTRIBUTION"

      means the amount of euro 7,000,000 cash equity contribution to the
      Borrower by the Guarantor, the Shareholder or any other Affiliate of the
      Borrower.

      "EURIBOR"

      means for an Interest Period:

      (a)   the applicable Screen Rate as of 11.00 a.m. (Brussels time) on the
            Rate Fixing Day for the offering of deposits in euro for a period
            comparable to that Interest Period;

      (b)   if no Screen Rate is available for that Interest Period, the
            arithmetic mean (rounded upward to the nearest four decimal places)
            of the rates, as supplied to the Agent at its request, quoted by the
            Reference Banks to leading banks in the European interbank market as
            of 11.00 a.m. (Brussels time) on the Rate Fixing Day for the
            offering of deposits in euro for a period comparable to that
            Interest Period; or

      (c)   if the rate cannot be determined under paragraph (a) or paragraph
            (b) above, the rate supplied to the Agent at its request by the
            British Bankers' Association for the offering of deposits in euros
            for a period commencing on the Rate Fixing Day and comparable to the
            Interest Period.

      "EURO"

      means the single currency of the Participating Member States.

      "EVENT OF DEFAULT"

      means an event specified as such in Clause 19.1 (Events of Default).

      "EXCESS RISKS"

      means:

      (a)   the proportion of claims for general average, salvage and salvage
            charges which are not recoverable as a result of the value at which
            the Vessel is assessed for the purpose of such claims exceeding her
            hull and machinery insured value; and

      (b)   collision liabilities not recoverable in full under the hull and
            machinery insurance by reason of those liabilities exceeding such
            proportion of the insured value of the Vessel as is covered by the
            hull and machinery insurance.

      "EXPECTED DELIVERY DATE"

      means 31st December, 2004.

      "FACILITY"

      means the facility referred to in Clause 2.1 (Term loan facility).

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                                       8

      "FACILITY OFFICE"

      means the office(s) notified by a Bank to the Agent:

      (a)   on or before the date it becomes a Bank; or

      (b)   by not less than five Business Days' notice,

      as the office(s) through which it will perform all or any of its
      obligations under this Agreement.

      "FEE LETTERS"

      means the letters between the Arranger and the Borrower and between the
      Agent and the Borrower dated on or about the date of this Agreement and
      relating to the payment of fees by the Borrower in consideration of the
      granting of this Facility including but not limited to the Supplemental
      Fee Letter.

      "FINAL MATURITY DATE"

      means 31st January, 2012.

      "FINANCE DOCUMENT"

      means this Agreement, the supplemental agreement dated 23rd December 2004,
      the Supplemental Agreement, each Security Document, each Fee Letter
      (including the Supplemental Fee Letter) each Swap Agreement, a Novation
      Certificate, a Deed of Accession or any other document designated as such
      by the Agent and the Borrower.

      "FINANCE PARTY"

      means the Arranger, any Bank, each Swap Bank, the Agent or the Spanish
      Security Agent.

      "FINANCIAL INDEBTEDNESS"

      means any indebtedness in respect of:

      (a)   moneys borrowed and debit balances at banks and other financial
            institutions;

      (b)   any debenture, bond, note, loan stock or other similar debt
            instrument;

      (c)   any acceptance or documentary credit;

      (d)   receivables sold or discounted (otherwise than on a non-recourse
            basis);

      (e)   the acquisition cost of any asset to the extent payable before or
            after the time of acquisition or possession by the party liable
            where the advance or deferred payment is arranged primarily as a
            method of raising finance or financing the acquisition of that asset
            (other than normal trade credit not exceeding 180 days);

      (f)   any leases (whether in respect of land, machinery, equipment or
            otherwise) entered into primarily as a method of raising finance or
            financing the acquisition of the asset leased;

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                                       9

      (g)   any currency swap or interest swap, cap or collar arrangements or
            any other derivative instrument;

      (h)   any amounts raised under any other transaction having the commercial
            effect of a borrowing or raising of money; or

      (i)   any guarantee, indemnity or similar assurance in respect of any of
            the foregoing.

      "GAAP"

      means generally accepted accounting principles in Spain as in effect as of
      the date of this Agreement pursuant to the pronouncements, statements,
      rules and regulations of the Spanish Institute of Accountancy and Audit of
      Accounts "Instituto de Contabilidad y Auditoria de Cuentas".

      "GENERAL ASSIGNMENT"

      means the general assignment of, inter alia, the Earnings, the
      Disbursement Account, the SEPI Comfort Letter, the Time Charter, the Time
      Charter Guarantee and each other Charter granted or to be granted in
      favour of the Agent by the Borrower, together with any and all notices and
      acknowledgements entered into in connection therewith.

      "GROUP"

      means the Guarantor and the Borrower and their respective Affiliates and
      associated companies.

      "GUARANTEE"

      means the guarantee of the obligations of the Borrower to the Finance
      Parties given by the Guarantor in favour of the Agent on or about the date
      of this Agreement as amended, supplemented and confirmed by (i) a
      confirmation and ratification agreement dated 26 November, 2004 and (ii)
      the Guarantor Confirmation Agreement.

      "GUARANTOR"

      means Teekay Shipping Spain S.L. (formerly Naviera F Tapias S.A.), a
      company organised and existing under the laws of Spain and having its
      registered office at C/Musgo n degrees 5, 2 degrees  Plta., LA FLORIDA,
      28023 Madrid.

      "GUARANTOR CONFIRMATION AGREEMENT"

      means the agreement dated on or around the date of the Supplemental
      Agreemententered into between the Guarantor and the Agent.

      "HAZARDOUS MATERIAL"

      means any element or substance, whether natural or artificial, and whether
      consisting of gas, liquid, solid or vapour, whether on its own or in any
      combination with any other element or substance, which is listed,
      identified, defined or determined by any Environmental Law or other
      applicable law to be, to have been, or to be capable of being or becoming
      harmful to mankind or any living organism or damaging to the Environment,
      including, without

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                                       10

      limitation, oil (as defined in the United States Comprehensive
      Environmental Response, Compensation and Liability Act of 1980, as
      amended).

      "HOLDING COMPANY"

      means, in relation to a person, an entity of which that person is a
      Subsidiary.

      "INFORMATION MEMORANDUM"

      means the Information Memorandum dated November, 2001 and prepared by the
      Arranger on the basis of information provided to it by the Borrower in
      connection with this Agreement.

      "INSTALMENT"

      means an amount due and payable by the Borrower under the terms of the
      Sales Contract and the Shipbuilding Contract (if Stage One is then in
      effect), the terms of the Bareboat Charter (if Stage Two is then in
      effect) or, as the case may be, the Shipbuilding Contract (if neither
      Stage One nor Stage Two is then in effect).

      "INSURANCES ASSIGNMENT"

      means the assignment of the Obligatory Insurances and the Permissible
      Delays Insurances to be granted in favour of the Agent by the Borrower
      together with any and all notices and acknowledgements entered into in
      connection therewith

      "INSURERS"

      means the underwriters or insurance companies with whom any Obligatory
      Insurance is effected and the managers of any protection and indemnity or
      war risks association in which the Vessel may at any time be entered.

      "INTEREST PERIOD"

      means each period determined in accordance with Clause 8.2 (Duration).

      "INTEREST RATE CLOSING DATE"

      means the date agreed between the Agent and the Borrower falling on or
      after the date of this Agreement but before the first Drawdown Date on
      which the rate of Interest on the Loan is fixed by execution of the Swap
      Agreements.

      "ISM CODE"

      means the International Safety Management Code (including the guidelines
      on its implementation), adopted by the International Maritime Organization
      Assembly as Resolutions A.741(18) and A.788(19), as the same may have been
      or may be amended or supplemented from time to time. The terms "SAFETY
      MANAGEMENT SYSTEM", "SAFETY MANAGEMENT CERTIFICATE", "DOCUMENT OF
      COMPLIANCE" and "MAJOR NON-CONFORMITY" shall have the same meanings as are
      given to them in the ISM Code.

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                                       11

      "ISSUER"

      means the entity to whom the Borrower pays the Instalment whilst and for
      as long as Stage Two is in effect.

      "LOAN"

      means up to one hundred and eighty million euros (euro 180,000,000) or the
      principal amount thereof from time to time outstanding under this
      Agreement.

      "LOSSES"

      means each and every liability, loss, charge, claim, demand, action,
      proceeding, damage, judgment, order or other sanction, enforcement,
      penalty, fine, fee, commission, interest, lien, salvage, general average,
      cost and expense of whatsoever nature suffered or incurred by or imposed
      on any Finance Party.

      "MAJORITY BANKS"

      means, at any time, Banks:

      (a)   whose participations in the Loan aggregate more than 66 2/3 per
            cent. of the Loan;

      (b)   if no part of the Loan is then outstanding, whose Commitments then
            aggregate more than 66 2/3 per cent. of the Total Commitments; or

      (c)   if no part of the Loan is then outstanding and the Total Commitments
            have been reduced to nil, whose commitments aggregated more than
            66 2/3 per cent. of the Total Commitments immediately before the
            reduction.

      "MANAGER"

      means the Borrower, the Technical Manager or such other manager as the
      Agent may approve or appoint in accordance with the terms of this
      Agreement on terms acceptable to the Banks.

      "MANDATORY COST"

      means the cost imputed to the Banks of compliance with:

      (a)   the cash ratio and special deposit requirements of the Bank of
            England or any other relevant central bank and/or any banking
            supervision or other costs imposed by the Financial Services
            Authority, as determined in accordance with Schedule 6 (Calculation
            of the Mandatory Cost); and

      (b)   any other applicable regulatory or central bank requirement relating
            to any Tranche made available by a Bank through a branch in a
            jurisdiction of the currency of that Tranche including any reserve
            asset requirements of the European Central Bank.

      "MARGIN"

      means 1.20 per cent. per annum.

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                                       12

      "MASTER AGREEMENT ASSIGNMENT"

      means the assignment of the Master Agreement to be granted in favour of
      the Agent by the Borrower at the same time as Stage Two comes into effect
      together with any and all notices and acknowledgements entered into in
      connection therewith.

      "MASTER AGREEMENT"

      means the master agreement to be entered into between, among others, the
      Borrower, the Builder, the AIE and the Issuer at the same time as Stage
      Two comes into effect, in the form annexed to the Memorandum of Agreement
      as Appendix 6 to that document.

      "MATERIAL ADVERSE EFFECT"

      means a material adverse effect on the Borrower's or the Guarantor's
      ability to meet their respective obligations to each Finance Party under
      the Finance Documents.

      "MATERIALS OF ENVIRONMENTAL CONCERN"

      means and includes all pollutants, contaminants, toxic substances, oil as
      defined in the United States Oil Pollution Act 1990 and hazardous
      substances as defined in the United States Comprehensive Environmental
      Response, Compensation and Liability Act 1980.

      "MEMORANDUM OF AGREEMENT"

      means the memorandum of agreement between the Builder and the Borrower
      dated 19th November, 2001.

      "MEMORANDUM OF AGREEMENT ASSIGNMENT"

      means the assignment of the Memorandum of Agreement granted or to be
      granted in favour of the Agent by the Borrower together with any and all
      notices and acknowledgements entered into in connection therewith.

      "MORTGAGE"

      means a first priority Spanish law ship mortgage in respect of the Vessel
      to be given in favour of each of the Banks (jointly and severally) on the
      Delivery Date by:

      (a)   in the event that the Borrower receives title to the Vessel on the
            Delivery Date, the Borrower; or

      (b)   in the event that the AIE receives title to the Vessel on the
            Delivery Date, the AIE,

      ranking pari passu with the Swap Bank Mortgage and substantially in the
      form of, in the case of (a), Appendix A Part I or, in the case of (b),
      Appendix A Part II, as amended by the Mortgage Amendment Deed.

      "MORTGAGE AMENDMENT DEED"

      means a Spanish Public Document of amendment entered into by the AIE, the
      Spanish Security Agent, the Banks and the Agent and dated on or around the
      date of the Supplemental Agreement.

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                                       13

      "NOVATION AGREEMENT"

      means the novation agreement between the SPC, the AIE and the Builder, to
      be entered into at the same time as Stage Two comes into effect, in the
      form annexed to the Memorandum of Agreement as Appendix 3 to that
      document.

      "NOVATION CERTIFICATE"

      has the meaning given to it in Clause 27.3 (Procedure for novations).

      "OBLIGATORY INSURANCES"

      means:

      (a)   all contracts and policies of insurance and all entries in clubs
            and/or associations which are from time to time required to be
            effected and maintained in accordance with this Agreement in respect
            of the Vessel; and

      (b)   all benefits under the contracts, policies and entries under
            paragraph (a) above and all claims in respect of them and the return
            of premiums.

      "PARTICIPATING MEMBER STATE"

      means a member state of the European Communities that adopts or has
      adopted the euro as its lawful currency under the legislation of the
      European Union for European Monetary Union.

      "PARTY"

      means a party to this Agreement.

      "PERMISSIBLE DELAYS INSURANCES"

      means insurance in respect of a Permissible Delay (as that term is defined
      in the Shipbuilding Contract).

      "PERMITTED LIENS"

      means:

      (a)   Security Interests created by the Security Documents;

      (b)   liens for unpaid crew's wages outstanding in the ordinary course of
            trading for not more than one calendar month after the due date for
            payment;

      (c)   liens for salvage;

      (d)   liens for classification or scheduled dry docking or for necessary
            repairs to the Vessel whose aggregate cost does not exceed euro
            2,500,000 at any one time; and

      (e)   liens for collision,

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                                       14

      and

      (i)   liens for master's disbursements incurred in the ordinary course of
            trading; and

      (ii)  to the extent they are fully subordinate to the Security Interest
            created by the Mortgage and the Swap Bank Mortgage on the Vessel any
            other liens arising in the ordinary course of operation of the
            Vessel,

      in each case provided that such amounts are paid when due or, if not paid
      when due are being disputed in good faith by appropriate proceedings (and
      for the payment of which adequate reserves or security are at the relevant
      time maintained or provided), provided further that such proceedings,
      whether by payment of adequate security into Court or otherwise, do not
      give rise to a material risk of the Vessel or any interest therein being
      seized, sold, forfeited or otherwise lost or of criminal liability on the
      Agent, the Spanish Security Agent or on any of the Banks.

      "PLEDGE OF QUOTA SHARES"

      means the pledge of the quota shares of the Borrower, given or to be given
      by the Shareholder in favour of the Spanish Security Agent for each of the
      Banks as amended by (i) a modification and ratification agreement dated 23
      December, 2004 and (ii) the Pledge Amendment.

      "PLEDGE AMENDMENT"

      means a Spanish Public Document of amendment entered into between [the
      Shareholder and the Agent] dated on or around the date of the Supplemental
      Agreement.

      "POTENTIAL EVENT OF DEFAULT"

      means an event which, with the giving of notice, lapse of time,
      determination of materiality or fulfilment of any other applicable
      condition (or any combination of the foregoing), would constitute an Event
      of Default.

      "RATE FIXING DAY"

      means the second TARGET Day before the first day of an Interest Period for
      a Tranche, or such other day as the Agent determines is generally treated
      as the rate fixing day by market practice in the relevant interbank
      market.

      "REFERENCE BANKS"

      means, subject to Clause 27.4 (Reference Banks), the London branches of
      JPMorgan Chase Bank, Credit Agricole Indosuez andCommerzbank
      Aktiengesellschaft.

      "REFUND GUARANTEES"

      means together each of the refund guarantees issued or to be issued by the
      Builder's bank in favour of the Borrower in respect of each of the
      Instalments (other than the Delivery Instalment) pursuant to Article II.7
      of the Shipbuilding Contract and Article III.2 of the Sales Contract in
      the form annexed as Annex 1 to the Memorandum of Agreement or such other
      refund guarantees as may replace the same from time to time (with the
      approval of the Agent

<PAGE>

                                       15

      acting on the instructions of the Majority Banks), whether in connection
      with the implementation of Stage Two or otherwise.

      "REFUND GUARANTEES ASSIGNMENT"

      means the assignment of the Refund Guarantees granted or to be granted in
      favour of the Agent by the Borrower together with any and all notices and
      acknowledgements entered into in connection therewith.

      "RELATED CONTRACTS"

      means any or all of the following (as the context requires):

      (a)   the Sales Contract;

      (b)   the Time Charter;

      (c)   any other Charter;

      (d)   the Refund Guarantees;

      (e)   the Shipbuilding Contract;

      (f)   any Vessel Management Contract;

      (g)   any Technical Management Agreement;

      (h)   the Time Charter Guarantee;

      (i)   the Obligatory Insurances;

      (j)   the Capital Costs Side Letter;

      (k)   the Master Agreement;

      (l)   the Memorandum of Agreement;

      (m)   the Bareboat Charter;

      (n)   the SEPI Comfort Letter;

      (o)   the Novation Agreement;

      (p)   the Termination Agreement;

      (q)   the Deed of Maintenance Guarantee; and

      (r)   any other document entered into in connection with the
            implementation of Stage Two.

      "RELEASE"

      means an emission, spill, release or discharge into or upon the air,
      surface water, groundwater, or soils of any Materials of Environmental
      Concern for which the Borrower has
<PAGE>

                                       16

      any liability under Environmental Law, except in accordance with a valid
      Environmental Approval.

      "REPAYMENT INSTALMENT"

      means each instalment payable pursuant to Clause 6 (Repayment).

      "REPLACEMENT SWAP AGREEMENT"

      means any ISDA Master Agreement entered into by each Swap Bank with the
      Borrower pursuant to Clause 27.8.

      "REQUEST"

      means a request made by the Borrower for a Tranche, substantially in the
      form of Schedule 4 (Form of Request).

      "REQUIRED AMOUNT"

      means that amount which at the relevant time is 120 per cent. of the
      higher of:

      (a)   the aggregate of the outstanding Loan and the mark to market value
            of the swap transaction documented in the Swap Agreements, as
            advised by the Agent from time to time, provided that the mark to
            market adjustment may never be less than zero; and

      (b)   the value of the Vessel, as valued in accordance with Clause 18
            (Valuation).

      "SALES CONTRACT"

      means the agreement dated 14th December, 2001 between the Builder, the SPC
      and the Borrower under which the Borrower agrees to buy the Vessel from
      the SPC and the SPC agrees to deliver the Vessel to the Buyer.

      "SALES CONTRACT ASSIGNMENT"

      means the assignment of the Sales Contract granted or to be granted in
      favour of the Agent by the Borrower, together with any and all notices and
      acknowledgements entered into in connection therewith.

      "SCREEN RATE"

      means, in respect of an Interest Period, the percentage rate per annum for
      a period substantially the same as the relevant Interest Period displayed
      on Telerate page 248 on the relevant Rate Fixing Day. If the relevant page
      is replaced or the service ceases to be available, the Agent may specify
      another page or service displaying the appropriate rate.

      "SECURED LIABILITIES"

      means all present and future obligations and liabilities (actual or
      contingent) of the Borrower to the Finance Parties under or in connection
      with any Finance Document.


<PAGE>

                                       17

      "SECURITY ASSETS"

      means any asset the subject of a Security Interest created by a Security
      Document.

      "SECURITY DOCUMENTS"

      means:

      (a)   the Sales Contract Assignment;

      (b)   the Mortgage;

      (c)   each Swap Bank Mortgage;

      (d)   the General Assignment;

      (e)   the Pledge of Quota Shares;

      (f)   the Swap Agreement Assignment;

      (g)   the Vessel Management Assignment;

      (h)   the Guarantee;

      (i)   the Memorandum of Agreement Assignment;

      (j)   the Refund Guarantees Assignment;

      (k)   the Master Agreement Assignment;

      (l)   the Bareboat Charter Assignment;

      (m)   the Deed of Maintenance Guarantee Assignment;

      (n)   in the event that a direct shipbuilding contract is entered into, or
            deemed pursuant to the terms of the Memorandum of Agreement to be
            entered into, between the Builder and the Borrower, an assignment of
            that shipbuilding contract;

      (o)   the Insurances Assignment;

      (p)   the Guarantor Confirmation Agreement;

      (q)   the Mortgage Amendment Deed;

      (r)   the Swap Bank Mortgage Amendment Deed;

      (s)   the Pledge Amendment;

      (t)   the Earnings Account Assignment; and

      (u)   any other document designated as such in writing by the Borrower and
            the Agent.


<PAGE>

                                       18

      "SECURITY INTEREST"

      means any mortgage, pledge, lien, charge, assignment, hypothecation or
      security interest or any other agreement or arrangement having the effect
      of conferring security.

      "SEPI"

      means "Sociedad Estatal de Participaciones Industriales", ("Public Company
      of Industrial Holding"), a state owned corporation incorporated in Spain
      with registered office at 134, Velazquez Street, Madrid, Spain.

      "SEPI COMFORT LETTER"

      means the comfort letter addressed to the Borrower from SEPI and dated 21
      January, 2002.

      "SHAREHOLDER"

      means the Guarantor.

      "SHIPBUILDING CONTRACT"

      means the agreement between the Builder and the SPC dated 23rd December,
      2000 under which the Builder agreed to build the Vessel and deliver it to
      the SPC as amended and restated by the Builder and the SPC by an agreement
      dated 11th December, 2001 (in a form and substance satisfactory to the
      Agent) or as the same may be deemed to be entered into directly between
      the Builder and the Borrower pursuant to Clause 6 of the Memorandum of
      Agreement.

      "SPC"

      means Ladoga Company Limited, a special purpose company organised and
      existing under the laws of England and having its principal place of
      business at 78 Cannon Street, London EC4P 5LN.

      "SPANISH PUBLIC DOCUMENT"

      means an "escritura publica" or "poliza" granted before a Spanish Notary
      Public.

      "SPANISH SECURITY AGENT"

      means J.P. Morgan Bank S.A. when acting in its capacity as agent and
      attorney for each of the Banks (appointed by each Bank under a power of
      attorney in the form of Schedule 9 (Form of Bank's Power of Attorney) in
      connection with the Pledge of Quota Shares and the Mortgage.

      "STAGE ONE"

      means the initial "warehousing" phase of the agreement for the supply of
      the Vessel from the Builder to the Borrower under which:

      (a)   the Builder and the Borrower have entered into the Memorandum of
            Agreement which governs the relationship between these parties and
            sets out the circumstances in which Stage Two may be implemented;

<PAGE>

                                       19

      (b)   the SPC and the Builder have entered into the Shipbuilding Contract;
            and

      (c)   the SPC, the Builder and the Borrower have entered into the Sales
            Contract.

      "STAGE ONE DOCUMENTS"

      means the Shipbuilding Contract, the Sales Contract, the Memorandum of
      Agreement and any other documents which may be entered into with the
      approval of the Agent in connection with the implementation of Stage One.

      "STAGE TWO"

      means the tax lease phase of the agreement for the supply of the Vessel
      from the Builder to the Borrower under which, providing the conditions in
      Clause 3 of the Memorandum of Agreement have been satisfied:

      (a)   the Builder, the SPC and the AIE will enter into the Novation
            Agreement under which the rights and obligations of the SPC under
            the Shipbuilding Contract will be transferred to the AIE by way of
            novation;

      (b)   the Builder, the Borrower and the SPC will enter into the
            Termination Agreement under which the Sales Contract is terminated;

      (c)   the AIE and the Borrower will enter into the Bareboat Charter; and

      (d)   the various parties to the Master Agreement will enter into that
            document.

      "STAGE TWO DOCUMENTS"

      means the Shipbuilding Contract, the Memorandum of Agreement, the Master
      Agreement, the Bareboat Charter, the Novation Agreement, the Termination
      Agreement and any other document which may be entered into with the
      approval of the Agent in connection with the implementation of Stage Two.

      "SUBSIDIARY"

      means an entity from time to time of which a person has direct or indirect
      control or owns directly or indirectly more than fifty per cent. of the
      share capital or similar right of ownership.

      "SUPPLEMENTAL AGREEMENT"

      means the agreement entered into between, amongst others, the Borrower and
      the Finance Parties dated [ ], 2005.

      "SUPPLEMENTAL FEE LETTER"

      means the letter between the Agent and the Borrower dated [ ], 2005.

      "SWAP AGREEMENT"

      means together each of the ISDA Master Agreements to be entered into by
      each Swap Bank with the Borrower on or after the Interest Rate Closing
      Date in order to fix:


<PAGE>

                                       20

      (a)   the rate of Interest on the Tranches from the Expected Drawdown Date
            of each Tranche until the Expected Delivery Date (together with any
            confirmation executed in connection therewith); and

      (b)   the rate of Interest on the Tranches from the Expected Delivery Date
            until the Final Maturity Date (together with any confirmation
            executed in connection therewith)

      that have been approved by JPMorgan Chase Bank, N.A..

      "SWAP AGREEMENT ASSIGNMENT"

      means the assignment of each Swap Agreement granted or to be granted in
      favour of the Agent by the Borrower, together with any and all notices and
      acknowledgements entered into in connection therewith.

      "SWAP BANK MORTGAGE"

      means together, each first priority Spanish law ship mortgage in respect
      of the Vessel to be given in favour of a Swap Bank on the Delivery Date
      by:

      (a)   in the event that the Borrower receives title to the Vessel on the
            Delivery Date, the Borrower; or

      (b)   in the event that the AIE receives title to the Vessel on the
            Delivery Date, the AIE,

      ranking pari passu with the Mortgage and substantially in the form of, in
      the case of (a), Appendix B Part 1 or, in the case of (b), Appendix B Part
      II or, any one or more of them, as the context requires as amended by the
      Swap Bank Mortgage Amendment Deed.

      "SWAP BANK MORTGAGE AMENDMENT DEED"

      means a Spanish Public Document of amendment entered into by the AIE, the
      Spanish Security Agent, the Banks and the Agent dated on or around the
      date of the Supplemental Agreement.

      "SWAP BANKS"

      means JPMorgan Chase Bank, N.A., Commerzbank Aktiengesellschaft, Calyon
      (formerly Credit Agricole Indosuez) and any other bank or financial
      institution which becomes a party to this Agreement as a Swap Bank under
      Clause 27.7 (Accession of Swap Banks) in each case in its capacity as
      provider of interest rate or hedging facilities to the Borrower.

      "SWAP DEBT"

      means all present and future liabilities (actual or contingent) payable or
      owing by the Borrower to the Swap Banks under or in connection with the
      Swap Agreements, whether or not matured and whether or not liquidated.

      "TARGET DAY"

      means a day on which the Trans-European Automated Real-time Gross
      Settlement Express Transfer payment system is open for the settlement of
      payments in euro.


<PAGE>

                                       21

      "TECHNICAL MANAGER"

      means the Borrower or the Guarantor or such other technical manager as the
      Agent, acting on the instructions of the Majority Banks may approve or
      appoint in accordance with the terms of this Agreement.

      "TECHNICAL MANAGEMENT AGREEMENT"

      means the agreement entered into or to be entered into between the
      Borrower and the Technical Manager for the technical management of the
      Vessel, or as the case may be, such other agreement for the technical
      management of the Vessel which may be entered into by the Borrower with a
      Technical Manager in accordance with the terms and conditions of this
      Agreement.

      "TERMINATION AGREEMENT"

      means the termination agreement between the Borrower, the Builder and the
      SPC, to be entered into at the same time as Stage Two comes into effect,
      in the form annexed to the Memorandum of Agreement as Appendix 5.

      "TIME CHARTER"

      means the agreement dated on or about the date of this Agreement between
      the Borrower and the Time Charterer for the time charter of the Vessel,
      together with:

      (a)   the Capital Costs Side Letter; and

      (b)   any other addendum thereto from time to time.

      "TIME CHARTERER"

      means Repsol YPF Trading y Transporte S.A., a company incorporated under
      the laws of Spain and having its registered office at 278 Paseo de la
      Castellana, 28046 Madrid, Spain, or any assignee of the Time Charter
      pursuant to Clause 51 of the Time Charter.

      "TIME CHARTER GUARANTEE"

      means the time charter guarantee dated on or about the date of this
      Agreement, issued by Repsol YPF S.A. in favour of the Borrower in
      connection with the Time Charter.

      "TOTAL COMMITMENTS"

      means euro 180,000,000.

      "TOTAL LOSS" includes:

      (a)   actual, constructive, compromised, agreed or arranged total loss of
            the Vessel;

      (b)   requisition for title or other compulsory acquisition of the Vessel
            otherwise than by requisition for hire;

      (c)   capture, seizure, arrest, detention, or confiscation of the Vessel
            by any government or by persons acting or purporting to act on
            behalf of any government which deprives


<PAGE>

                                       22

            the Borrower or, as the case may be, any Charterer of the use of the
            Vessel for more than 60 days after that occurrence; and

      (d)   requisition for hire of the Vessel by any government or by persons
            acting or purporting to act on behalf of any government which
            deprives the Borrower, or, as the case may be, any Charterer of the
            use of the Vessel.

      "TRANCHE"

      means the amount of each advance of the Loan made by the Banks (or any of
      them) under the Facility.

      "VESSEL"

      means the 138,000 cbm LNG carrying vessel under construction under the
      Shipbuilding Contract as Hull Number 105.

      "VESSEL MANAGEMENT ASSIGNMENT"

      means the assignment of any Vessel Management Contract and any Technical
      Management Agreement granted or to be granted in favour of the Agent by
      the Borrower, together with any and all notices and acknowledgements
      entered into in connection therewith.

      "VESSEL MANAGEMENT CONTRACT"

      means an agreement which will be entered into between the Borrower and a
      Manager (in the event that the Borrower itself ceases to be the Manager)
      for the management of the Vessel in form and substance satisfactory to the
      Agent in its sole discretion, in accordance with the terms and conditions
      of this Agreement.

1.2   CONSTRUCTION

(a)   In this Agreement, unless the contrary intention appears, a reference to:

      (i)   an "AMENDMENT" includes a supplement, novation, protocol or
            re-enactment and "AMENDED" is to be construed accordingly;

      (ii)  "APPROVED" in Clause 17.36 (Scope of Obligatory Insurances) and
            Clause 17.38 (Obligatory Insurances) means approved by the Agent in
            writing;

            "ASSETS" includes present and future properties, revenues and rights
            of every description;

            an "AUTHORISATION" includes an authorisation, consent, approval,
            resolution, licence, exemption, filing, registration and
            notarisation;

            a "MONTH" is a reference to a period starting on one day in a
            calendar month and ending on the numerically corresponding day in
            the next calendar month, except that:

            (A)   if there is no numerically corresponding day in the month in
                  which that period ends, that period shall end on the last
                  Business Day in that calendar month; or


<PAGE>

                                       23

             (B)   if an Interest Period commences on the last Business Day of a
                   calendar month, that Interest Period shall end on the last
                   Business Day in the calendar month in which it is to end;

             a "REGULATION" includes any regulation, rule, official directive,
             request or guideline (whether or not having the force of law, but
             if not, in respect of which it is customary for banking and
             financial institutions to comply with) of any governmental or
             inter-governmental or supranational body, agency, department or
             regulatory, self-regulatory or other authority or organisation;

      (iii)  a law or regulation, or to a provision of a law or regulation, is a
             reference to that law, regulation or provision as amended or
             re-enacted;

      (iv)   a Clause or a Schedule is a reference to a clause of or a schedule
             to this Agreement;

      (v)    a person includes its successors and assigns;

      (vi)   a Finance Document or another document is a reference to that
             Finance Document or that other document as amended;

      (vii)  a time of day is a reference to London time; and

      (viii) a calendar day, week, month or year is a reference to such a period
             of time as set out in the Gregorian calendar.

(b)   Unless the contrary intention appears, a term used in any other Finance
      Document or in any notice given under or in connection with any Finance
      Document has the same meaning in that Finance Document or notice as in
      this Agreement.

(c)   The index to and the headings in this Agreement are for convenience only
      and are to be ignored in construing this Agreement.

(d)   A document is "IN THE AGREED FORM" for the purposes of the Finance
      Documents if it is initialled for the purposes of identification as such
      by the Borrower and the Agent on or before the date of this Agreement.

(e)   A person who is not a party to this Agreement may not enforce its terms
      under the Contracts (Rights of Third Parties) Act 1999.

(f)   If the Agent reasonably considers that an amount paid by the Borrower to
      the Agent under a Finance Document is capable of being avoided or
      otherwise set aside on the liquidation or administration of the Borrower
      or otherwise, then that amount shall not be considered to have been
      irrevocably paid for the purposes of the Finance Documents.

2.    THE FACILITY

2.1   TERM LOAN FACILITY

      Subject to the terms of this Agreement, the Banks agree to make a Loan
      available in such number of Tranches as may be agreed between the Borrower
      and the Agent during the Commitment Period to the Borrower up to an
      aggregate principal amount not exceeding the Total Commitments. No Bank is
      obliged to lend more than its Commitment.


<PAGE>

                                       24

2.2   NATURE OF A FINANCE PARTY'S RIGHTS AND OBLIGATIONS

(a)   The obligations of a Finance Party under the Finance Documents are
      several. Failure of a Finance Party to carry out those obligations does
      not relieve any other Party of its obligations under the Finance
      Documents. No Finance Party is responsible for the obligations of any
      other Finance Party under the Finance Documents.

(b)   The rights of a Finance Party under the Finance Documents are divided
      rights. A Finance Party may, except as otherwise stated in the Finance
      Documents, separately enforce those rights.

3.    PURPOSE

3.1   The Borrower shall apply each Tranche:

      (a)   firstly, towards payment of Instalments due and payable as at the
            Drawdown Date of the relevant Tranche and, in the case of the
            Instalment due on the Delivery Date, additionally towards payment of
            any liquidated damages payable to the Time Charterer under the Time
            Charter as a result of any delay in delivery of, or the
            underperformance of, the Vessel;

      (b)   secondly, towards payment of Interest and amounts due to the Agent
            pursuant to the Fee Letters; and

      (c)   thirdly, subject to the Agent's prior approval in writing, the
            balance, if any, towards payment or reimbursement of any other fees
            and expenses directly related to this Facility and/or the
            construction of the Vessel.

3.2   Without affecting the obligations of the Borrower in any way, no Finance
      Party is bound to monitor or verify the application of any Tranche.

4.    CONDITIONS PRECEDENT

4.1   INITIAL CONDITIONS PRECEDENT

      The obligations of each Finance Party to the Borrower under this Agreement
      are subject to the conditions precedent that the Agent has notified the
      Borrower and the Banks that it has received all of the documents set out
      in Schedule 2 Part I (Initial Conditions Precedent Documents) in form and
      substance satisfactory to the Agent.

4.2   FURTHER CONDITIONS PRECEDENT AND CONDITION SUBSEQUENT

(a)   The obligations of each Bank to participate in any Tranche under Clause
      5.3 (Advance of Tranche) are subject to the further conditions precedent
      that:

      (i)   on both the date of the Request and the Drawdown Date for that
            Tranche:

            (A)   the representations and warranties in Clause 16
                  (Representations and Warranties) to be repeated on those dates
                  are true and accurate and will be true and accurate
                  immediately after the Tranche is advanced (and, in relation to
                  Clause 16.14 (Litigation), a certificate of compliance is
                  provided by the Borrower); and


<PAGE>

                                       25

            (B)   no Default is outstanding or would result from the advancing
                  of the Tranche;

      (ii)  the advancing of the Tranche would not cause Clause 2.1 (Term loan
            facility) to be contravened;

      (iii) each Existing Bank (as defined in Clause 27.2 (Transfers by Banks))
            as at the Drawdown Date of the relevant Tranche has given to the
            Spanish Security Agent power of attorney in the form of Schedule 9
            (Form of Bank's Power of Attorney) which power of attorney has been
            notarised and apostillised;

      (iv)  all other terms and conditions under this Agreement to the advancing
            of a Tranche have been satisfied in full;

      (v)   in the event that Stage Two has been implemented on or before the
            Drawdown Date in respect of a Tranche, the Agent has notified the
            Borrower and the Banks that it has received all of the documents set
            out in Schedule 2 Part II (Stage Two Conditions Precedent Documents)
            in a form and substance satisfactory to the Agent;

      (vi)  on or before the Drawdown Date in respect of:

            (A)   the Tranche which relates to the Instalment referred to in
                  Clause 6.2(c) of the Memorandum of Agreement, a certified copy
                  of the letter from the Classification Society addressed to the
                  Borrower and the Builder confirming that the keel of the
                  Vessel has been laid; and

            (B)   the Tranche which relates to the Instalment referred to in
                  Clause 6.2(d) of the Memorandum of Agreement, a certified copy
                  of the letter from the Classification Society addressed to the
                  Borrower and the Builder confirming the date of floating of
                  the Vessel;

      (vii) in respect of each of the second, third and fourth Tranches, an
            amount equal to euro 2,333,333 (in respect of the second and third
            Tranches) and euro 2,333,334 (in respect of the fourth Tranche) has
            been paid into the Disbursement Account by the Guarantor or any
            other shareholder or affiliate of the Borrower by way of equity
            contribution for application in and towards the relevant Instalment
            under the Shipbuilding Contract; and

      (viii) on or before the Drawdown Date in respect of the second Tranche to
            be drawn down, the Mortgage and the Swap Bank Mortgage have been
            pre-approved by the Registrar of Ships in the Canary Islands.

(b)   The Borrower undertakes that, within fifteen (15) days from the date of
      drawdown of a Tranche, it will formalise a record of declarations in the
      required form under Spanish law executed before a Notary Public or a
      Commercial Stockbroker in Spain in which it acknowledges that it has
      received that Tranche from the Banks. The costs of such formalisation
      shall be for the account of the Borrower.

4.3   DELIVERY DATE CONDITIONS PRECEDENT

(a)   The obligations of each Bank to participate in the Tranche to be applied
      towards payment of the Delivery Date Instalment are subject to the
      additional condition precedent that the Agent has notified the Borrower
      and the Banks that it has received all of the documents set out in


<PAGE>

                                       26

      Schedule 3 (Delivery Date Conditions Precedent Documents) in form and
      substance satisfactory to the Agent.

(b)   The Majority Banks shall be entitled, in their absolute discretion, to
      waive or defer the fulfilment of any of the conditions precedent referred
      to in paragraph (a) above (other than the condition precedent set out in
      paragraph 4(b) of Schedule 3 (Delivery Date Conditions Precedent
      Documents) that the Time Charterer has accepted the Vessel). If the
      Majority Banks choose to defer delivery of any such document, the Borrower
      agrees to supply such document by no later than 30 days after the Drawdown
      Date of the Tranche applied towards payment of the Delivery Date
      Instalment. In the event that, following such deferral, the relevant
      document has not been supplied by the Borrower within 30 days, the
      Majority Banks may, by notice from the Agent to the Borrower, demand that
      all or part of the Facility, together with interest and all other accrued
      amounts under the Finance Documents be payable on demand whereupon they
      shall immediately become payable by the Borrower on demand by the Agent.

5.    DRAWDOWN

5.1   RECEIPT OF REQUEST

      The Borrower may borrow a Tranche during the Commitment Period if the
      Agent receives, not later than 10.00 a.m. three Business Days before the
      proposed Drawdown Date, a duly completed Request. Each Request is
      irrevocable.

5.2   COMPLETION OF REQUEST

      A Request will not be regarded as having been duly completed unless:

      (a)   the Drawdown Date is a Business Day falling during the Commitment
            Period; and

      (b)   the payment instructions comply with Clause 10 (Payments).

      Each Request must specify one Tranche only.

5.3   ADVANCE OF TRANCHE

(a)   The Agent shall promptly notify each Bank of the details of the requested
      Tranche and the amount of its participation in the Tranche.

(b)   Subject to the terms of this Agreement, each Bank shall make its
      participation in the Tranche available to the Agent for the Borrower on
      the relevant Drawdown Date. The amount of each Bank's participation in the
      Tranche will be the proportion of the Tranche which its Commitment bears
      to the Total Commitments on the proposed Drawdown Date.

6.    REPAYMENT

(a)   The Borrower shall repay the Loan by 84 consecutive monthly instalments
      commencing on the last day of the second full calendar month falling after
      the Delivery Date in the amounts and on the dates set out in Schedule 7
      (Repayment Schedule). The amount of each Repayment Instalment shall be
      calculated by reference to a fixed rate annuity profile assuming
      amortisation of the aggregate principle amount constituting the Loan minus
      the Ballon Amount over 240 months. Such profile shall be generated by the
      execution of the


<PAGE>

                                       27

      Swap Agreement with JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase
      Bank, London branch).

(b)   The Agent shall notify the Borrower of the amount of each Repayment
      Instalment by provision of a repayment schedule in the form of Schedule 7
      (which repayment schedule shall replace the then existing Schedule 7) as
      soon as practicable after execution of the Swap Agreement with JPMorgan
      Chase Bank, N.A. (formerly JPMorgan Chase Bank, London branch). In the
      event the dates and/or the amounts recorded in any confirmation of the
      Swap Agreement with JPMorgan Chase Bank, N.A. (formerly JPMorgan Chase
      Bank, London branch) are amended, the Agent may provide to the Borrower a
      replacement repayment schedule (which repayment schedule shall replace the
      then existing Schedule 7). Any and all references to Schedule 7 to this
      Agreement in the Finance Documents shall be read and construed as
      references to the repayment schedule provided by the Agent in accordance
      with this Clause 6. The balance of the Loan outstanding on the Final
      Maturity Date shall be repaid in full on that date. Any amounts repaid
      under this Clause 6 may not be re-borrowed.

7.    PREPAYMENT AND CANCELLATION

7.1   AUTOMATIC CANCELLATION

      The unutilised Commitment of each Bank shall be automatically cancelled at
      close of business on the last day of the Commitment Period.

7.2   MANDATORY PREPAYMENT

(a)   If the Delivery Date does not fall on or before 18th August, 2005, the
      Borrower shall immediately prepay the whole of any Tranches then
      outstanding.

(b)   The Borrower shall be obliged to prepay the whole of any Tranches then
      outstanding in the following circumstances and at the following times:

      (i)   if the Vessel is sold, on or before the date on which the sale is
            completed by delivery of the Vessel to the buyer;

      (ii)  if there is a Total Loss, on the earlier of the date falling 60 days
            after the Date of Total Loss and the date of receipt by the Agent of
            the proceeds of insurance relating to such Total Loss;

      (iii) if any of the Memorandum of Agreement, the Shipbuilding Contract,
            the Master Agreement or the Bareboat Charter are terminated for any
            reason, on the date of termination of the relevant agreement;

      (iv)  if the Time Charter is terminated for any reason, on the date of
            termination.;

7.3   VOLUNTARY PREPAYMENT

      Subject to Clause 17.29(a) (Proceeds from sale or Total Loss of the
      Vessel), the Borrower may, on giving 30 days' prior written notice to the
      Agent, prepay the whole or any part of the Loan but if in part in a
      minimum amount or multiple of euro 3,000,000.


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                                       28

7.4   MISCELLANEOUS PROVISIONS

(a)   Any notice of prepayment under this Agreement is irrevocable. The Agent
      shall notify the Banks promptly of receipt of any such notice.

(b)   All prepayments under this Agreement shall be made together with accrued
      interest on the amount prepaid and together with any and all amounts then
      due and payable to the Swap Banks under the Swap Agreements and subject to
      Clause 24.3 (Other indemnities), without premium or penalty and shall be
      applied against the Repayment Instalments in inverse order of maturity or
      pro rata, at the discretion of the Agent.

(c)   No prepayment or cancellation is permitted except in accordance with the
      express terms of this Agreement.

(d)   In respect of any prepayment under this Agreement, the Borrower must
      provide evidence satisfactory to the Agent that any consent required by
      the Borrower or any Finance Party or other creditor of the Borrower in
      connection with the prepayment has been obtained and remains in force, and
      that any regulation relevant to this Agreement which affects the Borrower
      or any Finance Party has been complied with.

(e)   No amount of the Total Commitments cancelled under this Agreement may
      subsequently be reinstated.

(f)   No amount prepaid under this Agreement may subsequently be re-borrowed.

8.    INTEREST PERIODS

8.1   GENERAL

      The first Interest Period in respect of each Tranche shall commence on its
      Drawdown Date and each subsequent Interest Period shall commence at the
      end of the then current Interest Period.

8.2   DURATION

(a)   Each Interest Period for each Tranche in respect of the period from (and
      including) the relevant Drawdown Date, other than the Drawdown Date in
      respect of the Tranche to be applied towards payment of the Delivery Date
      Instalment, up to (but excluding) 31st January 2005 (the "CONSTRUCTION
      PERIOD") shall be six months, provided that, if in respect of any Tranche,
      the Construction Period is not divisible into equal six month periods, the
      first Interest Period for that Tranche shall be reduced accordingly.

(b)   The Interest Period in respect of the Tranche to be applied towards
      payment of the Delivery Date Instalment shall begin on the Delivery Date
      and end on 31 January, 2005.

(c)   Each Interest Period falling after the Interest Period referred to in
      subclause 8.2(b) above, shall commence on (and include) 31st January, 2005
      (in the case of the first such Interest Period) or the last day of the
      immediately preceding Interest Period (in the case of each other Interest
      Period) and shall end on (but exclude) the corresponding day in the next
      calendar month.

(d)   Notwithstanding the provisions of subclause 8.2(a) above and without
      prejudice to the provisions of subclause 8.2(b), the first Interest Period
      in respect of each Tranche after the


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                                       29

      first Tranche shall end on (but exclude) the day on which the then current
      Interest Period in respect of the first Tranche ends.

8.3   NON-BUSINESS DAYS

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

8.4   COINCIDENCE WITH THE FINAL MATURITY DATE

      If an Interest Period would otherwise overrun the Final Maturity Date, it
      shall be shortened so that it ends on the Final Maturity Date.

8.5   NOTIFICATION

      The Agent shall notify the Borrower and the Banks of the duration of each
      Interest Period promptly after ascertaining its duration.

9.    INTEREST

9.1   INTEREST RATE

      The rate of interest on each Tranche for each Interest Period is the rate
      per annum determined by the Agent to be the aggregate of the applicable:

      (a)   Margin;

      (b)   EURIBOR; and

      (c)   Mandatory Cost.

9.2   DUE DATES

      Except as otherwise provided in this Agreement, accrued interest on each
      Tranche is payable by the Borrower on the last day of each Interest
      Period.

9.3   DEFAULT INTEREST

(a)   If the Borrower fails to pay any amount payable by it under the Finance
      Documents (other than interest), it shall forthwith on demand by the
      Agent, pay interest on the overdue amount from the due date up to the date
      of actual payment, both before and after judgment, at a rate (the "DEFAULT
      RATE") determined by the Agent to be the aggregate of:

      (i)   two per cent. per annum;

      (ii)  the Margin; and

      (iii) subject to paragraph (b) below, EURIBOR for deposits on call or for
            successive Interest Periods of one month.


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                                       30

(b)   If any unpaid sum of principal of any Tranche is repayable during an
      Interest Period, the EURIBOR applicable to that unpaid sum during the
      unexpired portion of that Interest Period shall be the EURIBOR applicable
      to it immediately before it fell due.

(c)   If the Agent determines (after consultation with the Reference Banks) that
      euro deposits are not being made available to the leading banks in the
      London Interbank Market, the reference to EURIBOR in paragraph (a)(iii)
      above shall be taken as a reference to a rate representing the cost of
      funds to the Reference Banks from such other sources as they may from time
      to time determine.

(d)   Unpaid interest shall be capitalised so that it will increase the amount
      of principal of each Tranche and the increased principal amount of each
      Tranche will incur and accrue interest at the default rate.

9.4   NOTIFICATION

      The Agent shall promptly notify each relevant Party of the determination
      of a rate of interest under this Agreement.

10.   PAYMENTS

10.1  PLACE

(a)   All payments by the Borrower under the Finance Documents shall be made to
      the Agent to its account at such office or bank as it may notify to the
      Borrower for this purpose. In the event the Agent changes its account,
      office or bank, it shall give the Borrower two Business Days' advance
      notification of such change.

(b)   All amounts to be made available by the Banks to the Agent under this
      Agreement shall be made available in euros and in immediately available,
      freely transferable, cleared funds at such account at such office or bank
      as the Agent may designate.

(c)   Subject to no Default having occurred and being continuing, and subject to
      the Agent being satisfied that the relevant amount is due and payable
      either to the SPC under the Sales Contract and the Memorandum of Agreement
      during Stage One or to the Issuer under the Master Agreement during Stage
      Two, the Agent shall forthwith transfer such amounts as are attributable
      to Instalments into the account of:

      (i)   at any time whilst Stage One is in effect, the SPC (the Borrower
            will supply the Agent in writing with the account details for the
            SPC promptly at least two (2) Business Days before the Drawdown date
            of the first Tranche; or

      (ii)  at any time whilst Stage Two is in effect, the Issuer (the Borrower
            will supply the Agent in writing with the account details for the
            Issuer promptly after the implementation of Stage Two and, in any
            event, at lease five (5) Business Days before the Drawdown Date of
            any Tranche to be drawndown after the implementation of Stage Two).

(d)   On receipt of the funds in paragraph (b) above, and subject to Clause 3
      (Purpose) the Agent shall forthwith transfer such amounts not transferred
      pursuant to paragraph (c) above into the Disbursement Account.


<PAGE>

                                       31

10.2  FUNDS

      Subject to Clause 10.1(b), all payments under the Finance Documents to the
      Agent shall be made for value on the due date at such times and in such
      funds as the Agent may specify to the Party concerned as being customary
      at the time for the settlement of transactions in euros.

10.3  DISTRIBUTION

(a)   Where a sum is to be paid to the Agent under the Finance Documents for
      another Party, the Agent is not obliged to pay that sum to that Party
      until it has established that it has actually received that sum. The Agent
      may, however, assume that the sum has been paid to it in accordance with
      the Finance Documents and, in reliance on that assumption, make available
      to that Party a corresponding amount. If the sum has not been made
      available but the Agent has paid a corresponding amount to another Party,
      that Party shall forthwith on demand refund the corresponding amount to
      the Agent together with interest on that amount from the date of payment
      to the date of receipt, calculated at a rate determined by the Agent to
      reflect its cost of funds, provided that no such interest shall be payable
      in relation to such refund to the extent that such sum to be refunded
      falls due to be refunded due to the Agent's wilful misconduct or reckless
      disregard with knowledge of the probable consequences.

(b)   Any and all amounts received by the Spanish Security Agent in its capacity
      as Spanish Security Agent shall be paid to the Agent for application by
      the Agent pursuant to the provisions of this Agreement.

10.4  CURRENCY

(a)   Amounts payable in respect of costs, expenses, taxes and the like are
      payable in the currency in which they are incurred.

(b)   Any other amount payable under the Finance Documents is, except as
      otherwise provided in the Finance Documents, payable in euros.

(c)   If the Agent or any other Finance Party receives any payment required to
      be paid by the Borrower under this Agreement in a currency other than
      euro, the Agent may convert the currency received into euro at the Agent's
      Spot Rate of Exchange and the Indebtedness shall not be deemed reduced by
      the payment until and except to the extent that the proceeds of conversion
      are applied towards the Secured Liabilities.

10.5  SET-OFF AND COUNTERCLAIM

      All payments made by the Borrower under the Finance Documents shall be
      made without set-off or counterclaim.

10.6  NON-BUSINESS DAYS

(a)   If a payment under the Finance Documents is due on a day which is not a
      Business Day, the due date for that payment shall instead be the next
      Business Day in the same calendar month (if there is one) or the preceding
      Business Day (if there is not).

(b)   During any extension of the due date for payment of any principal under
      the Finance Documents interest is payable on the principal at the rate
      payable on the original due date.



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                                       32

10.7  PAYMENTS

(a)   Subject to paragraph (c) below, if the Agent receives any payment from the
      Borrower under the Finance Documents or a payment by the Spanish Security
      Agent of a payment from the Borrower or the proceeds of any enforcement of
      the security conferred by the Security Documents from the Spanish Security
      Agent, and Swap Bank or any other Finance Party, the Agent shall apply
      that payment towards the obligations of the Borrower under the Finance
      Documents in the following order:

      (i)   FIRSTLY, in or towards payment pro rata of any unpaid fees, costs
            and expenses of the Agent and/or any of the Banks under the Finance
            Documents;

      (ii)  SECONDLY, in or towards payment pro rata of any principal or accrued
            interest due but unpaid under this Agreement or any loss or
            liability incurred by the Swap Banks as a consequence of a default
            under or termination by the Borrower of, or any replacement or
            amendment in relation to, the Swap Agreements;

      (iii) THIRDLY, in or towards payment pro rata of any other sum due but
            unpaid under the Finance Documents; and

      (iv)  FOURTHLY, the balance, if any, to the Borrower.

(b)   In the event a Default has occurred and is continuing, the Agent shall, if
      so directed by all the Banks and the Swap Banks, vary the order set out in
      sub-paragraphs (a)(ii) to (iv) above.

(c)   If the Agent receives any payment from the Borrower under the Swap
      Agreement or a payment from the Spanish Security Agent (in its capacity as
      a Swap Bank) of a payment from the Borrower under the Swap Agreements, the
      Agent shall apply that payment towards the obligations of the Borrower
      under the Swap Agreements in the following order:

      (i)   FIRSTLY, in or towards pro rata any unpaid fees, costs and expenses
            of the Agent and or the Swap Banks under the Swap Agreements;

      (ii)  SECONDLY, in or towards pro rata of any amounts due but unpaid to
            the Swap Banks under the Swap Agreements; and

      (iii) THIRDLY, the balance, if any, to the Borrower.

(d)   Paragraphs (a), (b) and (c) above shall override any appropriation made by
      the Borrower.

11.   TAXES

11.1  GROSS-UP

(a)   All payments by the Borrower under the Finance Documents shall be made
      without any deduction and free and clear of and without any deduction for
      or on account of any taxes, except to the extent that the Borrower is
      required by law to make payment subject to any taxes. If any tax or
      amounts in respect of tax must be deducted, or any other deductions must
      be made, from any amounts payable or paid by the Borrower, or paid or
      payable by the Agent to a Bank, under the Finance Documents, the Borrower
      shall pay such additional amounts as may be necessary to ensure (having
      regard to any such deduction on any such additional amount) that the
      relevant Party receives a net amount equal to the full amount which it
      would have received had payment not been made subject to tax or any other
      deduction.



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                                       33

(b)   Without prejudice to paragraph (a) above, in relation to an exemption from
      or application of a rate lower than that of general application in
      relation to any Non-Residents Income Tax (Impuesto sobre la Renta de No
      Residentes) pursuant to any double taxation treaty, or pursuant to any
      other cause relating to residence status, any Bank which is not
      incorporated in Spain shall supply the Agent (which shall deliver a copy
      thereof to the Borrower), with a certificate of residence issued by the
      pertinent fiscal administration, evidencing that such Bank is resident for
      tax purposes in a country which is a member of the European Union or, as
      the case may be, is resident for tax purposes in the relevant state which
      has signed and ratified a treaty for the avoidance of double taxation with
      Spain, within the meaning of such treaty, prior to the last day of the
      first Interest Period. As such certificates are, at the date hereof, only
      valid for a period of one year, each such Bank will be required to so
      supply a further such certificate upon expiry of the previous certificate
      in relation to any further payment of interest.

11.2  TAX RECEIPTS

      All taxes required by law to be deducted or withheld by the Borrower from
      any amounts paid or payable under the Finance Documents shall be paid by
      the Borrower when due and the Borrower shall, within 15 days of the
      payment being made or, if later, forthwith following receipt of the same,
      deliver to the Agent for the relevant Bank evidence satisfactory to that
      Bank (including all relevant tax receipts) that the payment has been duly
      remitted to the appropriate authority.

11.3  TAX CREDITS

(a)   If:

      (i)   the Borrower makes a payment or increases the amount of any payment,
            pursuant to Clause 11.1 (Gross-Up) (a "TAX RELATED PAYMENT"); and

      (ii)  the Agent, the relevant Bank or the other relevant Party obtains a
            refund of tax or obtains a credit against or relief for any tax paid
            or otherwise payable by it, in respect of or calculated with
            reference to the deduction, withholding or payment of tax giving
            rise to the Tax Related Payment (a "TAX CREDIT"),

      then, if and to the extent that the Agent, the relevant Bank or the other
      relevant Party (as appropriate), in its reasonable opinion, can do so
      without any adverse consequences for it (other than the mere payment of
      monies under this provision), it shall reimburse the Borrower such
      proportion of that Tax Credit as is attributable to the deduction,
      withholding or payment as will leave the Agent, the relevant Bank or, as
      the case may be, the other relevant Party (after that reimbursement) in no
      better or worse position in respect of its relevant tax liabilities than
      it would have been in if no Tax Related Payment had been required.

(b)   The Agent, the relevant Bank and the other relevant Party shall have
      absolute discretion as to whether to claim any Tax Credit as well as all
      other reliefs and credits available to it and, if it does claim, the
      extent, order and manner in which it does so. The Agent, the relevant Bank
      and the other relevant Party shall not be obliged to disclose any
      information regarding its tax affairs and computations to the Borrower.



<PAGE>

                                       34

12.   MARKET DISRUPTION

12.1  ABSENCE OF QUOTATIONS

      If EURIBOR is to be determined by reference to the Reference Banks but a
      Reference Bank does not supply an offered rate by 11.30 a.m. on a Rate
      Fixing Day, the applicable EURIBOR shall, subject to Clause 12.2 (Market
      disruption), be determined on the basis of the quotations of the remaining
      Reference Bank(s).

12.2  MARKET DISRUPTION

      If, in relation to any proposed Tranche:

      (a)   EURIBOR is to be determined by reference to the Reference Banks but
            no, or only one, Reference Bank supplies a rate by 11.30 a.m. on the
            Rate Fixing Day or EURIBOR is to be determined by reference to the
            rate supplied to the Agent by the British Bankers' Association and
            no such rate is supplied by 11.30 a.m. on the Rate Fixing Day or the
            Agent otherwise determines that adequate and fair means do not exist
            for ascertaining EURIBOR; or

      (b)   the Agent receives notification from Banks whose participations in a
            Tranche exceed 30 per cent. of that Tranche that, in their opinion:

            (i)   matching deposits may not be available to them in the London
                  interbank market in the ordinary course of business to fund
                  their participations in that Tranche for the relevant Interest
                  Period; or

            (ii)  the cost to them of obtaining matching deposits in the London
                  interbank market would be in excess of EURIBOR for the
                  relevant Interest Period,

      the Agent shall promptly notify the Borrower and the Banks of the fact and
      that this Clause 12 is in operation.

12.3  SUSPENSION OF DRAWDOWNS

      If a notification under Clause 12.2 (Market disruption) applies to a
      Tranche which has not been advanced, that Tranche shall not be advanced.
      However, within five Business Days of receipt of the notification, the
      Borrower and the Agent shall enter into negotiations for a period of not
      more than 30 days with a view to agreeing an alternative basis for
      determining the rate of interest and/or funding applicable to that and (to
      the extent required) any future Tranche. Any alternative basis agreed
      shall be, with the prior consent of all the Banks, binding on all the
      Parties.

12.4  ALTERNATIVE BASIS

      If a notification under Clause 12.2 (Market disruption) applies to a
      Tranche which is outstanding, then, for the purpose of calculating the
      rate of interest on that Tranche pursuant to Clause 9.1 (Interest rate):

      (a)   within five Business Days of receipt of the notification, the
            Borrower and the Agent shall enter into negotiations for a period of
            not more than 30 days with a view to agreeing an alternative basis
            for determining the rate of interest and/or funding applicable to
            that Tranche and/or any other Tranches;




<PAGE>

                                       35

      (b)   any alternative basis agreed under paragraph (a) above, or certified
            under paragraph (c) below, shall be, with the prior consent of all
            the Banks, binding on all the Parties and treated as part of this
            Agreement;

      (c)   if no alternative basis is agreed, each Bank shall (through the
            Agent) certify on or before the last day of the Interest Period to
            which the notification relates an alternative basis for maintaining
            its participation in that Tranche; and

      (d)   any such alternative basis may include an alternative method of
            fixing the interest rate, alternative Interest Periods or
            alternative currencies but it must reflect the cost to the Bank of
            funding its participation in the Tranche from whatever sources it
            may select plus the Margin plus any applicable Mandatory Cost.

13.   INCREASED COSTS

13.1  INCREASED COSTS

(a)   Subject to Clause 13.2 (Exceptions), the Borrower shall forthwith on
      demand by a Finance Party pay to that Finance Party the amount of any
      increased cost incurred by it or any of its Affiliates as a result of:

      (i)   the introduction of, or any change in, or any change in the
            interpretation or application of, any law or regulation; or

      (ii)  compliance with any regulation made after the date of this
            Agreement,

      (including any law or regulation relating to taxation, change in currency
      of a country or reserve asset, special deposit, cash ratio, liquidity or
      capital adequacy requirements or any other form of banking or monetary
      control).

(b)   In this Agreement "INCREASED COST" means:

      (i)   an additional cost incurred by a Finance Party or any of its
            Affiliates as a result of it having entered into, or performing,
            maintaining or funding its obligations under, any Finance Document;
            or

      (ii)  that portion of an additional cost incurred by a Finance Party or
            any of its Affiliates in making, funding or maintaining all or any
            advances comprised in a class of advances formed by or including
            that Finance Party's participations in the Loan made or to be made
            under this Agreement as is attributable to that Finance Party
            making, funding or maintaining those participations; or

      (iii) a reduction in any amount payable to a Finance Party or any of its
            Affiliates or in the effective return to a Finance Party or any of
            its Affiliates under this Agreement or (to the extent that it is
            attributable to this Agreement) on its capital; or

      (iv)  the amount of any payment made by a Finance Party or any of its
            Affiliates, or the amount of any interest or other return foregone
            by a Finance Party or any of its Affiliates, calculated by reference
            to any amount received or receivable by that Finance Party or any of
            its Affiliates from any other Party under this Agreement.


<PAGE>

                                       36

13.2  EXCEPTIONS

      Clause 13.1 (Increased costs) does not apply to any increased cost:

      (a)   compensated for by the payment of the Mandatory Cost;

      (b)   compensated for by the operation of Clause 11 (Taxes); or

      (c)   attributable to any change in the rate of, or change in the basis of
            calculating, tax on the overall net income of a Bank or any of its
            Affiliates (or the overall net income of a division or branch of the
            Bank or any of its Affiliates) imposed in the jurisdiction in which
            its principal office or Facility Office is for the time being
            situate.

14.   ILLEGALITY

      If by a change in law it becomes unlawful in any jurisdiction for a Bank
      to give effect to any of its obligations as contemplated by this Agreement
      or to fund or maintain its participation in any Tranche, then:

      (a)   that Bank may notify the Borrower through the Agent accordingly; and

      (b)   (i)   the Borrower shall within 30 days of receipt of such notice
                  prepay that Bank's participations in all Tranches together
                  with all other amounts payable by it to that Bank under this
                  Agreement; and

            (ii)  that Bank's Commitment shall be cancelled.

15.   MITIGATION

15.1  MITIGATION

      If circumstances arise such that:

      (a)   the Borrower is required to make an additional payment under Clause
            11 (Taxes); or

      (b)   the Borrower is or would be required under Clause 13.1 (Increased
            costs) to increase the amount of any payment to a Bank; or

      (c)   Clause 14 (Illegality) applies in relation to a Bank,

      then, without in any way limiting, reducing or otherwise qualifying the
      Borrower's obligations under those clauses but subject to Clause 15.2
      (Exceptions), the relevant Bank shall for a reasonable period of time (not
      exceeding 30 days) endeavour to take such reasonable steps as may be open
      to it to mitigate the effects of those circumstances and enter into
      discussions with the Borrower with a view to determining what other
      mitigating action might be taken by the Bank, including a potential change
      in the Bank's lending office or transfer of its Commitment to another bank
      or financial institution.

15.2  EXCEPTIONS

      Nothing in Clause 15.1 (Mitigation) shall oblige a Bank to incur any costs
      or expenses or to take any action or refrain from taking any action where,
      in the reasonable opinion of such



<PAGE>

                                       37

      Bank, to take or refrain from taking that action (as the case may be)
      might be prejudicial to its interests.

15.3  COSTS AND EXPENSES

      Any costs and expenses incurred by a Bank pursuant to Clause 15.1
      (Mitigation) shall be paid by the Borrower within five Business Days after
      receipt of a demand from the Agent on behalf of the Bank specifying the
      same. Any such demands shall be accompanied by copies of all supporting
      documentation which is reasonably and practically available to the Bank.

16.   REPRESENTATIONS AND WARRANTIES

16.1  REPRESENTATIONS AND WARRANTIES

      The Borrower makes the representations and warranties set out in this
      Clause 16 to each Finance Party.

16.2  STATUS

(a)   It is a single purpose company, duly incorporated and validly existing
      under the laws of Spain; and

(b)   it has the power to own its assets and carry on its business as it is
      being conducted.

16.3  SHARE CAPITAL AND OWNERSHIP

      The whole of the issued share capital of the Borrower is legally and
      beneficially owned by the Shareholder free of any Security Interest other
      than the Pledge of Quota Shares.

16.4  POWERS AND AUTHORITY

(a)   It has the power to enter into and perform, and has taken all necessary
      action to authorise the entry into, performance and delivery of, the
      Finance Documents and the Related Contracts to which it is or will be a
      party and the transactions contemplated by those Finance Documents and the
      Related Contracts.

(b)   All of the consents referred to in paragraph (a) above remain in force and
      nothing has occurred which makes any of them liable to revocation.

16.5  LEGAL VALIDITY

(a)   Each Finance Document and Related Contract to which it is or will be a
      party constitutes, or when executed in accordance with its terms will
      constitute, its legal, valid and binding obligations enforceable in
      accordance with its terms, subject to any applicable insolvency laws;

(b)   in entering into this Agreement and borrowing the Loan, the Borrower is
      acting on its own account; and

(c)   each Security Document creates, or will when it is entered into, create
      the Security Interests it purports to create with the priority as stated
      under each Security Document and enforceable against the trustee in
      bankruptcy, liquidator and creditors of the Borrower and any other third
      parties, subject to any applicable insolvency laws.



<PAGE>

                                       38

16.6  NON-CONFLICT

      The entry into and performance by it of, and the transactions contemplated
      by, the Finance Documents and the Related Contracts do not and will not
      conflict with:

      (a)   any law or regulation or judicial or official order in force as at
            the date of this Agreement;

      (b)   the constitutional documents of any member of the Group; or

      (c)   any document which is binding upon any member of the Group or any
            asset of any member of the Group.

16.7  PARI PASSU RANKING

      Its obligations under the Finance Documents rank and will rank at least
      pari passu with all its other present and future unsecured obligations
      (other than any rights in rem against the Vessel arising after the date of
      this Agreement and subject to any and all applicable insolvency laws).

16.8  TAXES ON PAYMENTS

      All amounts payable by the Borrower under the Finance Documents and the
      Related Contracts may be made free and clear of and without deduction or
      withholding for or on account of any tax payable under any relevant law.

16.9  STAMP DUTIES

      Except as notified in writing to and accepted by the Agent, no stamp or
      registration duty or similar taxes or charges are payable in Spain in
      respect of any Finance Document or Related Contract.

16.10 NO DEFAULT

(a)   No Default is outstanding or might result from the making of any Tranche;
      and

(b)   neither the Borrower nor the Guarantor or any Subsidiary of the Guarantor
      is in default (howsoever described) or breach of any material liability or
      obligation under any:

      (i)   Charter or other contract for the employment of; and/or

      (ii)  agreement relating to any Financial Indebtedness in relation to,

      a vessel under the management of the Borrower, the Guarantor or any
      Subsidiary of the Guarantor.

16.11 AUTHORISATIONS

      All authorisations, consents, registrations, filings, notarisations and
      the like required or desirable in connection with the entry into,
      performance, validity and enforceability of, and the transactions
      contemplated by, the Finance Documents and the Related Contracts have been
      obtained or effected (as appropriate) and are in full force and effect
      (or, in the case of registrations, filings, notarisations and the like,
      will be effected within any time limits



<PAGE>

                                       39

      required by any applicable law or, if there is no such requirement under
      applicable law, within such time limits as the Agent may reasonably
      require).

16.12 INFORMATION

      All information provided by or on behalf of the Borrower to any Finance
      Party in connection with any Finance Document or any Related Contract
      satisfies the requirement of Clause 17.4 (Information provided to be
      accurate).

16.13 ACCOUNTS

      The consolidated audited accounts, in English, of the Guarantor most
      recently delivered to the Agent:

      (a)   have been prepared by a reputable accounting firm in accordance with
            all applicable laws and GAAP principles and practices consistently
            applied;

      (b)   fairly represent the financial condition of the Guarantor and the
            Borrower as at the date of those accounts and of its profit for the
            period for which those accounts relate; and

      (c)   fully disclose or reserve against all of the Guarantor's and the
            Borrower's significant liabilities,

      and there has been no material adverse change in the financial condition
      of the Borrower or the Guarantor since the date to which those accounts
      were drawn up.

16.14 LITIGATION

      Except as notified in writing to and accepted by the Agent, no litigation,
      arbitration or administrative proceedings are current or, to its
      knowledge, pending or threatened against the Borrower or the Guarantor.

16.15 INFORMATION MEMORANDUM

(a)   The factual information provided by the Borrower contained in the
      Information Memorandum was true, accurate and not misleading in any
      material respect as at its date;

(b)   all opinions, predictions or intentions expressed in the Information
      Memorandum to be the Borrower's opinions, predictions or intentions are
      honestly held or made and the Borrower does not believe them to be
      misleading in any material respect;

(c)   the financial projections contained in the Information Memorandum which
      have been prepared by the Borrower have been prepared on the basis of
      recent historical information and on the basis of reasonable assumptions;

(d)   as at the date of this Agreement, nothing has occurred since the date of
      the Information Memorandum or been omitted from the Information Memorandum
      in connection with any information provided by the Borrower and no
      information has been given or withheld by the Borrower that results in the
      information contained in the Information Memorandum and provided by the
      Borrower being untrue or misleading in any material respect; and

(e)   all proper enquiries have been made to ascertain and to verify the
      foregoing.



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                                       40

16.16 TAXES PAID

      The Borrower has paid all taxes applicable to, or imposed on or in
      relation to, the Borrower or its business which have fallen due for
      payment.

16.17 STATUS OF CHARTERS AND RELATED CONTRACTS

(a)   Neither the Borrower nor any Charterer is in default under any Charter of
      the Vessel, which default has not been notified to the Agent;

(b)   there are no pending or, so far as the Borrower is aware, threatened
      actions, suits or proceedings in connection with any Charter of the
      Vessel;

(c)   neither the Borrower nor, to the best of the knowledge and belief of the
      Borrower, any other party to any Related Contract is in default under any
      Related Contract; and

(d)   there are no pending or, so far as the Borrower is aware, threatened
      actions, suits or proceedings in connection with any Related Contract.

16.18 ENVIRONMENT

      Except as may already have been disclosed by the Borrower in writing to,
      and acknowledged in writing by, the Agent:

      (a)   the Borrower and its Environmental Affiliates have without
            limitation complied with the provisions of all applicable
            Environmental Laws in relation to the Vessel;

      (b)   the Borrower and its Environmental Affiliates have obtained all
            requisite Environmental Approvals in relation to the Vessel and are
            in compliance with such Environmental Approvals;

      (c)   neither the Borrower nor any of its Environmental Affiliates has
            received notice of any Environmental Claim in relation to the Vessel
            which alleges that the Borrower is not in compliance with applicable
            Environmental Laws in relation to the Vessel or Environmental
            Approvals in relation to the Vessel;

      (d)   there is no Environmental Claim in relation to the Vessel pending or
            threatened; and

      (e)   there has been no Release of Materials of Environmental Concern.

16.19 SECURITY INTERESTS

      No Security Interest exists over its or any of its Subsidiary's assets
      which would cause a breach of Clause 17.13 (Security Interests).

16.20 SECURITY ASSETS

      Subject only to the terms of the Stage One Documents and the Stage Two
      Documents, it is solely and absolutely entitled to the Security Assets to
      which it is, or will be, a party and there is no agreement or arrangement
      under which it is obliged to share any proceeds of or derived from such
      Security Assets with any third party.



<PAGE>

                                       41

16.21 SALES CONTRACT/BAREBOAT CHARTER

      All amounts due and payable by the Borrower under the Sales Contract or,
      as the case may be, the Master Agreement have been unconditionally and
      irrevocably paid in full to the SPC or the Issuer respectively when due in
      accordance with the terms of the Sales Contract or, as the case may be,
      the Master Agreement as appropriate.

16.22 ISM CODE COMPLIANCE

      On and after the Delivery Date, the Borrower is in full compliance with
      the ISM Code.

16.23 IMMUNITY

(a)   The execution by the Borrower of each Finance Document and Related
      Contract to which it is a party constitutes, and its exercise of its
      rights and performance of its obligations under each Finance Document and
      each Related Contract will constitute, private and commercial acts done
      and performed for private and commercial purposes; and

(b)   the Borrower will not be entitled to claim immunity from suit, execution,
      attachment or other legal process in any proceedings taken in Spain in
      relation to any Finance Document and each Related Contract.

16.24 JURISDICTION/GOVERNING LAW

(a)   The Borrower's:

      (i)   irrevocable submission under Clause 35 (Jurisdiction) to the
            jurisdiction of the courts of England;

      (ii)  agreement that this Agreement is governed by English law; and

      (iii) agreement not to claim any immunity to which it or its assets may be
            entitled,

      are legal, valid and binding under the laws of Spain; and

(b)   any judgment obtained in England will be recognised and be enforceable by
      the courts of Spain.

16.25 NO AMENDMENTS TO RELATED CONTRACTS

      Other than as notified to and agreed by the Agent in writing, there have
      been no amendments to any of the Related Contracts (excluding any Vessel
      Management Contract until such time as it has been executed).

16.26 MONEY LAUNDERING

      Any borrowing by the Borrower and the performance of its obligations
      hereunder and under the other Finance Documents will be for its own
      account and will not involve any breach by it of any law or regulatory
      measure relating to "money laundering" as defined in Article 1 of the
      Directive (91/308/EEC) of the Council of the European Communities.



<PAGE>


                                       42

16.27 TIMES FOR MAKING REPRESENTATIONS AND WARRANTIES

      The representations and warranties set out in this Clause 16:

      (a)   are made by the Borrower on the date of this Agreement; and

      (b)   (with the exception of Clause 16.15 (Information Memorandum)) are
            deemed to be repeated by the Borrower on the date of each Request
            and each Drawdown Date and on the first day of each Interest Period
            with reference to the facts and circumstances then existing (but
            subject, in respect of Clause 16.5 (Legal Validity), Clause 16.8
            (Taxes on payments), Clause 16.10 (No Default), Clause 16.11
            (Authorisations), Clause 16.14 (Litigation), Clause 16.17 (Status of
            Charters), Clause 16.18 (Environment) and Clause 16.25 (No
            amendments to Related Contracts), to any matters notified to, and
            agreed by, the Agent in writing) and, in relation to Clause 16.12
            (Information), with reference to the most recently delivered
            Guarantor Accounts.

17.   UNDERTAKINGS

17.1  DURATION

      The undertakings in this Clause 17 remain in force from the date of this
      Agreement for so long as any amount is or may be outstanding under the
      Finance Documents or any Commitment is in force.

17.2  MAINTENANCE OF STATUS

      The Borrower will maintain its separate corporate existence and remain in
      good standing under the laws of Spain.

17.3  FINANCIAL INFORMATION

(a)   The Borrower shall supply to the Agent in English, in sufficient copies
      for all the Banks:

      (i)   its opening balance sheet;

      (ii)  as soon as the same are available (and in any event within 180 days
            of the end of each of its financial years) the consolidated audited
            financial statements of the Guarantor for that financial year; and

      (iii) as soon as the same are available (and in any event within 90 days
            of the end of each of its financial half-years) the consolidated
            unaudited financial statements of the Guarantor for that financial
            half-year.

(b)   The Borrower shall supply to the Agent in sufficient copies for all the
      Banks:

      (i)   as soon as the same are available (and in any event within 180 days
            of the end of each of its financial years) its audited financial
            statements for that financial year; and

      (ii)  as soon as the same are available (and in any event within 90 days
            of the end of each of its financial half-years) its unaudited
            financial statements for that financial half-year.



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                                       43

(c)   All accounts (audited and unaudited) delivered under Clause 17.3(a) and
      (b) (Financial information) will:

      (i)   be prepared by a reputable accounting firm in accordance with all
            applicable laws and GAAP principles and practices consistently
            applied;

      (ii)  fairly represent the financial condition of the Guarantor and the
            Borrower at the date of those accounts and of its profit for the
            period for which those accounts relate; and

      (iii) fully disclose or reserve against all significant liabilities of the
            Guarantor and the Borrower.

17.4  INFORMATION PROVIDED TO BE ACCURATE

      All financial and other information provided by or on behalf of the
      Borrower under or in connection with any Finance Document will be true and
      not misleading in any material respect and will not omit any material
      fact.

17.5  INFORMATION - MISCELLANEOUS

      The Borrower shall supply to the Agent:

      (a)   promptly upon becoming aware of them, details of any litigation,
            arbitration or administrative proceedings which are current,
            threatened or pending;

      (b)   promptly upon receipt thereof, a copy of any notice received by the
            Borrower from the Time Charterer or any other Charterer of any
            failure of the Borrower or any other Charterer to exercise due
            diligence under the Time Charter or any other Charter, together with
            details from time to time of any and all action being taken to
            remedy the same;

      (c)   promptly upon receipt thereof, a copy of any notice received by the
            Borrower from any party to any Stage One Document or Stage Two
            Document in relation to any Stage One Document or any Stage Two
            Document; and

      (d)   promptly, such further information in its possession or control
            regarding its business, affairs or financial condition as any
            Finance Party may through the Agent from time to time reasonably
            request,

      in sufficient copies for all of the Banks, if the Agent so requests.

17.6  NOTIFICATION OF DEFAULT

      The Borrower shall notify the Agent of any Default or any default by any
      other party to any of the Stage One Documents and the Stage Two Documents
      (the latter a "THIRD PARTY DEFAULT") (and the steps, if any, being taken
      to remedy it) promptly upon becoming aware of the same.



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                                       44

17.7  COMPLIANCE CERTIFICATES

(a)   The Borrower shall supply to the Agent:

      (i)   together with the accounts specified in Clause 17.3(a) and (b)
            (Financial information); and

      (ii)  promptly at any other time, if the Agent so requests,

      a certificate, in the form of Schedule 8 (Form of Compliance Certificate),
      signed by the chief executive officer or two of its senior officers on its
      behalf certifying that no Default nor Third Party Default has occurred and
      is continuing, is outstanding or, if a Default or a Third Party Default is
      outstanding, specifying the Default or the Third Party Default and the
      steps, if any, being taken to remedy it.

(b)   The Borrower shall procure that the Guarantor provides, promptly at the
      end of each of its financial quarters, a certificate in the agreed form,
      signed by its chief executive officer or two of its senior officers on its
      behalf certifying that no Default in respect of Clause 19 has occurred and
      is continuing.

(c)   The Borrower shall procure that the Guarantor provides, promptly at the
      end of each of its financial quarters, a certificate in the agreed form,
      signed by its chief executive officer or two of its senior officers on its
      behalf certifying that it has complied with the provisions of Clause 19.7
      (Cross Default).

17.8  AUTHORISATIONS

      The Borrower shall promptly:

      (a)   obtain, maintain and comply with the terms of; and

      (b)   supply certified copies to the Agent of,

      any authorisation, consent, registration, filing, notarisation and the
      like required under any Applicable Law or regulation to enable it to
      perform its obligations under, or for the validity or enforceability of,
      any Finance Document or any Related Contract.

17.9  PARI PASSU RANKING

      The Borrower shall procure that its obligations under the Finance
      Documents rank and will rank at least pari passu with all its other
      present and future unsecured obligations, except for obligations which are
      mandatorily preferred by law.

17.10 DISPOSALS

      The Borrower shall not, either in a single transaction or in a series of
      transactions, whether related or not or whether voluntary or involuntary,
      sell, transfer, grant or lease or otherwise dispose of all or a material
      part of its assets.



<PAGE>

                                       45

17.11 BUSINESS

(a)   The Borrower shall not carry on any business other than the ownership,
      operation and employment of the Vessel and other activities connected with
      or reasonably incidental to that business.

(b)   The Borrower will maintain its place of business, and keep its corporate
      documents and records, at the address stated at the commencement of this
      Agreement, and the Borrower will not establish, or do anything as a result
      of which it would be deemed to have, a place of business in any country
      other than Spain.

17.12 LIABILITIES

      The Borrower will not:

      (a)   make any loans or grant any credit other than any such loan or
            credit granted to any member of the Group; or

      (b)   make or hold any investments otherwise than in the ordinary course
            of its business referred to in Clause 17.11 (Business).

17.13 SECURITY INTERESTS

      The Borrower shall not create or permit to subsist any Security Interest
      over the Vessel or the Earnings or Obligatory Insurances or any other
      Security Assets or any Related Contract other than:

      (a)   Permitted Liens; or

      (b)   with the prior written consent of all of the Banks.

17.14 LIMITATION ON FINANCIAL INDEBTEDNESS

      The Borrower will not incur any Financial Indebtedness other than
      Financial Indebtedness:

      (a)   under the Finance Documents; or

      (b)   arising in the ordinary course of operation of the Vessel in an
            aggregate amount not exceeding euro 250,000, provided that such
            amounts are paid when due or, if not paid when due are being
            disputed in good faith by appropriate proceedings (and for the
            payment of which adequate reserves or security are at the relevant
            time maintained or provided), provided further that such
            proceedings, whether by payment of adequate security into Court or
            otherwise, do not give rise to a material risk of the Vessel or any
            interest therein being seized, sold, forfeited or otherwise lost or
            of criminal liability on the Agent or any of the Banks; or

      (c)   consisting of any guarantee or indemnity required by any protection
            and indemnity or war risks club or association to be given by the
            Borrower; or

      (d)   under any loan or credit facility granted to the Borrower by any
            member of the Group, which is unsecured and fully subordinated to
            the Facility, the principal terms of which are notified to the Agent
            by the Borrower in writing prior to the granting of the relevant
            Facility.


<PAGE>

                                       46

      The Borrower shall, upon a request being made by the Agent, provide the
      Agent with such further information as the Agent may reasonably require in
      connection with any loan or credit facility granted or to be granted to
      the Borrower pursuant to Clause 17.14(d) above.

17.15 MERGERS

      The Borrower shall not enter into any amalgamation, demerger, merger or
      reconstruction.

17.16 SECURITY

      The Borrower:

      (a)   will procure that the Mortgage and the Swap Bank Mortgage are, on
            execution, and continue to be, registered under Spanish law as a
            first priority mortgage;

      (b)   will procure that any other security conferred by it under any
            Security Document is maintained and perfected and registered with
            the relevant authorities;

      (c)   at its own cost, do all that it can to ensure that any Finance
            Document validly creates the obligations and Security Interests
            which it purports to create; and

      (d)   without limiting the generality of paragraph (a) above, at its own
            cost, promptly register, file, record or enrol any Finance Document
            with any court or authority, pay any stamp, registration or similar
            tax payable in respect of any Finance Document, give any notice or
            take any other step which, in the reasonable opinion of the Agent,
            is or has become necessary or desirable for any Finance Document to
            be valid, enforceable or admissible in evidence or to ensure or
            protect the priority of any Security Interest which it creates.

17.17 CHARTERS WITH AFFILIATED COMPANIES

      The Borrower will not subject the Vessel to any Charter in favour of any
      company affiliated with it unless that company has previously agreed in
      writing to subordinate its interests under such Charter in a form
      satisfactory to the Majority Banks.

17.18 DELIVERY OF VESSEL

      The Borrower shall not accept delivery of the Vessel from the Builder, the
      SPC or the AIE, as the case may be, unless and until either:

      (a)   the Time Charterer has accepted the Vessel pursuant to the terms of
            the Time Charter; or

      (b)   it is required to do so by a ruling resulting from an arbitration
            pursuant to:

            (i)   the terms of Article XIV (Law and Arbitration) of the Sales
                  Contract (if Stage One is in effect at the relevant time); or

            (ii)  the terms of Article XIII (Arbitration) of the Shipbuilding
                  Contract (which rights are assigned to the Borrower by Article
                  IV of the Master Agreement) (if either Stage Two or neither
                  Stage One nor Stage Two is in effect at the relevant time).

<PAGE>
                                       47

17.19 REGISTRATION OF THE VESSEL

      The Borrower will:

      (a)   procure and maintain with effect from the Delivery Date the valid
            and effective registration of the Vessel in the Canary Islands under
            the laws of Spain and flag of Spain (or such other laws and flag of
            like standing and acceptable to the Majority Banks as the Agent
            (acting in accordance with the instructions of the Majority Banks)
            may permit (such permission not to be unreasonably withheld)) and
            ensure nothing is done or omitted by which the registration of the
            Vessel would or might be defeated or imperilled; and

      (b)   not change the name or port of registration of the Vessel without
            the consent of the Agent (acting in accordance with the instructions
            of the Majority Banks) (such consent not to be unreasonably
            withheld).

17.20 CLASSIFICATION AND REPAIR

      The Borrower will at all times after the Delivery Date:

      (a)   ensure that the Vessel is surveyed from time to time as required by
            the classification society in which the Vessel is for the time being
            entered and maintain and preserve the Vessel in good working order
            and repair, ordinary wear and tear excepted, and in any event in
            such condition as will entitle her to the classification of LR, +100
            A1 Liquefied gas carrier/LNG, Ship type 2G (methane in membrane
            tanks, 0.25 bar, -163 degrees C + LMC, UMS, PORT, SDA, IWS, SCM, LI,
            FDA, NAVI, IBS, ES, TCM, CCS or, if such classification is not
            available with the highest equivalent classification available, with
            Lloyd's Register of Shipping or Bureau Veritas (or to the equivalent
            classification in another internationally recognised classification
            society of like standing acceptable to the Majority Banks), free of
            all overdue requirements and recommendations of that classification
            society;

      (b)   procure that all repairs to or replacement of any damaged, worn or
            lost parts or equipment shall be effected in such manner (both as
            regards workmanship and quality of materials) as not to diminish the
            value of the Vessel;

      (c)   not remove any material part of the Vessel, or any item of equipment
            installed on the Vessel unless the part or item so removed is
            forthwith replaced by a suitable part or item which is in the same
            condition as or better condition than the part or item removed, is
            free from any Security Interest or any right in favour of any person
            other than the Agent and becomes on installation on the Vessel the
            property of the Borrower and subject to the security constituted by
            the relevant Security Document(s) provided that the Borrower may
            install and remove equipment owned by a third party if the equipment
            can be removed without any risk of damage to the Vessel;

      (d)   ensure that the Vessel complies with all laws, regulations and
            requirements (statutory or otherwise) from time to time applicable
            to vessels registered under the laws and flag of Spain; and

      (e)   not without the prior written consent of the Agent (acting on the
            instructions of the Majority Banks) (such consent not to be
            unreasonably withheld) cause or permit to

<PAGE>
                                       48

            be made any substantial change in the structure, type or performance
            characteristics of the Vessel.

17.21 LAWFUL AND SAFE OPERATION

      The Borrower will at all times after the Delivery Date:

      (a)   not cause or permit the Vessel to be operated in any manner contrary
            to the laws, regulations, treaties and conventions (and all rules
            and regulations issued thereunder) from time to time applicable to
            the Vessel;

      (b)   subject to compliance by the Borrower with the terms of the Time
            Charter, not cause or permit the Vessel to trade with or within the
            territorial waters of any country in which her safety may be
            imperilled;

      (c)   subject to compliance by the Borrower with the terms of the Time
            Charter, not cause or permit the Vessel to be employed in any manner
            which will or may render her liable to requisition, confiscation,
            forfeiture, seizure, destruction or condemnation as prize;

      (d)   ensure that the Vessel is not employed in any trade or business
            which is forbidden by international law or is illicit or is carrying
            illicit or prohibited goods;

      (e)   subject to compliance by the Borrower with the terms of the Time
            Charter, in the event of hostilities in any part of the world
            (whether war be declared or not) ensure that the Vessel is not
            employed in carrying any contraband goods and that she does not
            trade in any zone after it has been declared a war zone by any
            authority or by the Vessel's war risks insurers unless the Vessel's
            insurers shall have confirmed to the Borrower that the Vessel is
            held covered under the Obligatory Insurances for the voyage(s) in
            question; and

      (f)   not charter the Vessel to or permit the Vessel to serve under any
            contract of affreightment with any foreign country or national of
            any foreign country which is specified by legislation or regulations
            of the United States of America or any other jurisdiction in which a
            Bank's Facility Office is located and such that, if the Earnings or
            any part of Earnings were derived from such charter or
            affreightment, that fact would render any Finance Document or the
            security conferred by the Security Documents unlawful.

17.22 REPAIR OF THE VESSEL

      The Borrower will not at any time after the Delivery Date put the Vessel
      into the possession of any person for the purpose of work being done upon
      her beyond the amount of euro 2,500,000 (or equivalent), other than for
      classification or scheduled dry docking unless such person shall have
      given an undertaking to the Agent not to exercise any lien on the Vessel
      or her Earnings or Obligatory Insurances for the cost of that work or
      otherwise.

17.23 ARRESTS AND LIABILITIES

      The Borrower will at all times after the Delivery Date:

      (a)   pay and discharge all obligations and liabilities whatsoever which
            have given or may give rise to liens (other than liens arising in
            the ordinary course of operation of the

<PAGE>
                                       49

            Vessel in each case for amounts the payment of which is not yet due
            or, if due and payable, is being disputed in good faith by
            appropriate proceeding (and for the payment of which adequate
            reserves have been provided or are and continue to be available)) on
            or claims enforceable against the Vessel and take all other steps
            necessary to prevent a threatened arrest of the Vessel;

      (b)   notify the Agent promptly in writing of the levy of any distress on
            the Vessel or her arrest, detention, seizure, condemnation as prize,
            compulsory acquisition or requisition for title or use and (save in
            the case of compulsory acquisition or requisition for title or use)
            obtain her release within 14 days;

      (c)   pay and discharge when due all dues, taxes, assessments,
            governmental charges, fines and penalties lawfully imposed on or in
            respect of the Vessel or the Borrower; and

      (d)   pay and discharge all other obligations and liabilities whatsoever
            in respect of the Vessel, the Earnings, the Obligatory Insurances
            and any Charter.

17.24 RELATED CONTRACTS

      The Borrower shall not take any action, enter into any document or
      agreement or omit to take any action or to enter into any document or
      agreement which would, or could reasonably be expected to, cause any
      Related Contract to cease to remain in full force and effect and shall use
      all reasonable endeavours to procure that each other party to any Related
      Contract does not take any action, enter into any document or agreement or
      omit to take any action or to enter into any document or agreement which
      would, or could reasonably be expected to, cause any Related Contract to
      cease to remain in full force and effect.

17.25 ENVIRONMENT

      The Borrower shall at all times after the Delivery Date:

      (a)   comply with all applicable Environmental Laws including, without
            limitation, requirements relating to the establishment of financial
            responsibility (and shall require that all Environmental Affiliates
            of the Borrower comply with all applicable Environmental Laws and
            obtain and comply with all required Environmental Approvals, which
            Environmental Laws and Environmental Approvals relate to any of the
            Vessel or her operation or her carriage of cargo); and

      (b)   promptly upon the occurrence of any of the following events, provide
            to the Agent a certificate of an officer of the Borrower or of the
            Borrower's agents specifying in detail the nature of the event
            concerned:

            (i)   the receipt by the Borrower or any Environmental Affiliate
                  (where the Borrower has knowledge of the receipt) of any
                  Environmental Claim; or

            (ii)  any (or any potential) Release of Materials of Environmental
                  Concern.

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                                       50

17.26 INFORMATION REGARDING THE VESSEL

      The Borrower will at all times after the Delivery Date:

      (a)   promptly notify the Agent of the occurrence of any accident,
            casualty or other event which has caused or resulted in or may cause
            or result in the Vessel being or becoming a Total Loss;

      (b)   promptly notify the Agent of any requirement or recommendation made
            by any Insurer or classification society or by any competent
            authority which is not complied with in a timely manner;

      (c)   promptly notify the Agent of any intended dry docking of the Vessel;

      (d)   promptly notify the Agent of any Environmental Claim being made in
            connection with the Vessel or its operation;

      (e)   promptly notify the Agent of any claim for breach of the ISM Code
            being made in connection with the Vessel or its operation;

      (f)   give to the Agent from time to time on request such information as
            the Agent may require regarding the Vessel, her employment, position
            and engagements;

      (g)   provide the Agent on request with copies of the classification
            certificate of the Vessel and of all periodic damage or survey
            reports on the Vessel;

      (h)   promptly furnish the Agent with full information of any casualty or
            other accident or damage to the Vessel involving an amount in excess
            of euro 2,500,000 (or equivalent);

      (i)   give to the Agent and its duly authorised representatives reasonable
            access to the Vessel for the purpose of conducting on board
            inspections and/or surveys of the Vessel and pay the reasonable
            expenses incurred by the Agent in connection with the inspections
            and/or surveys provided that, unless a Default has occurred and is
            continuing, such inspections and/or surveys shall not take place at
            the expense of the Borrower other than at dry docking and the Agent
            shall co-operate with the Borrower in respect of the timing for and
            the place where such surveys take place in order to minimise
            disruption to the activities of the Vessel; and

      (j)   if the Agent reasonably believes an Event of Default may have
            occurred, furnish to the Agent from time to time upon reasonable
            request certified copies of the ship's log in respect of the Vessel.

17.27 PROVISION OF FURTHER INFORMATION

      The Borrower will, as soon as practicable following receipt of a request
      by the Agent, provide the Agent with any additional or further financial
      or other information relating to the Borrower, the Vessel, the Earnings,
      the Obligatory Insurances, any Charter or to any other matter relevant to,
      or to any provision of, a Finance Document.

17.28 MANAGEMENT

(a)   The Borrower will ensure that at all times after the Delivery Date the
      Vessel is managed by:

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                                       51

      (i)   the Borrower on terms approved by the Agent; or

      (ii)  a substitute Manager, pursuant to a Vessel Management Contract and
            subject to provision of the Vessel Management Assignment.

(b)   The Borrower will not terminate, amend or agree to any amendment to a
      Vessel Management Contract, and will procure that a Manager does not
      terminate, amend or agree to any amendment to a Technical Management
      Agreement, without the prior written consent of the Agent (acting on the
      instructions of the Majority Banks).

(c)   The Borrower agrees that the Agent (acting on the instructions of the
      Majority Banks) shall be entitled to require the Borrower to terminate any
      existing Vessel Management Contract and/or procure that a Manager
      terminates any existing Technical Management Agreement and to enter into a
      replacement Vessel Management Contract with a replacement Manager and/or
      procure that a Manager enters into a replacement Technical Management
      Agreement with a replacement Technical Manager, in each case selected or
      approved by the Agent (acting on the instructions of the Majority Banks)
      in the event of:

      (i)   any of the circumstances set out in Clause 3(d) (Duty to maintain)
            of the Time Charter arising;

      (ii)  an occurrence which has a Material Adverse Effect in relation to the
            Borrower or the Guarantor; or

      (iii) the occurrence of an Event of Default.

      For the purposes of this paragraph (c), the Majority Banks agree that
      Naviera F. Tapias S.A is pre-approved as replacement Manager unless and to
      the extent that it is the Manager under the existing Vessel Management
      Contract which the Agent requires the Borrower to terminate.

(d)   The Borrower shall not sub-contract its responsibilities for the
      maintenance and/or operation of the Vessel and shall procure that no other
      Manager shall subcontract its responsibilities under a Vessel Management
      Contract (other than to a Technical Manager under a Technical Management
      Agreement) unless:

      (i)   the Agent (acting on the instructions of the Majority Banks and
            taking into account the economics of the Time Charter and the
            duration of successful operation of the Vessel by the Manager) gives
            its prior written consent to such subcontracting; and

      (ii)  the Borrower or, as the case may be, the existing Manager remains
            solely responsible for its obligations in connection with the
            maintenance and/or operation of the Vessel (in the case of the
            Borrower) or under the existing Vessel Management Contract (in the
            case of the existing Manager).

(e)   In the event of the termination for any reason or the expiration or an
      event of default (howsoever described) of or under either or both of a
      Vessel Management Contract or a Technical Management Agreement, the
      Borrower will enter into an agreement to replace such agreement with a
      counterparty approved by the Agent (acting on the instructions of the
      Majority Banks) and in a form and content approved by the Agent (acting on
      the instructions of the Majority Banks) within thirty days of such
      termination or event of default and will procure that the replacement
      Manager enters into an agreement to replace a Technical Manager with a
      counterparty approved by the Agent (acting on the instructions of the


<PAGE>
                                       52

      Majority Banks) and in a form and content approved by the Agent (acting on
      the instructions of the Majority Banks) within such thirty day period. In
      the event the Borrower does not enter into any such replacement agreement
      within such thirty day period, the Agent (acting on the instructions of
      the Majority Banks) shall be entitled, but not obliged, to enter into any
      such replacement agreement on the Borrower's behalf.

17.29 PROCEEDS FROM SALE OR TOTAL LOSS OF THE VESSEL

(a)   The Borrower will ensure that the proceeds from the sale or Total Loss of
      the Vessel are immediately upon receipt by the Borrower applied in
      prepayment of the Loan in accordance with Clause 7 (Prepayment and
      cancellation).

(b)   The Finance Parties agree that the Agent shall release the Vessel from the
      Mortgage and the Swap Bank Mortgage if the Agent is reasonably satisfied
      that the proceeds of sale of the Vessel are immediately to be applied in
      accordance with paragraph (a) above and that such proceeds will be
      sufficient to discharge all of the Borrower's payment obligations under
      this Agreement.

17.30 CHARTERS

(a)   The Borrower will not let the Vessel:

      (i)   on demise charter for any period;

      (ii)  on any time or consecutive voyage charter for a term which exceeds
            or which could by virtue of any optional extensions exceed 12
            months' duration (unless the Borrower provides evidence to the
            satisfaction of the Majority Banks that it will be able to meet all
            its payment obligations under the Finance Documents during that
            term);

      (iii) on terms whereby more than six months' hire is payable in advance;
            or

      (iv)  otherwise than on arm's-length terms,

      in each case without the consent of the Agent (acting on the instructions
      of the Majority Banks). For the avoidance of any doubt, this Clause
      17.30(a) shall not apply to the Time Charter or in respect of any joint
      service agreements or pooling arrangements which may (with the consent of
      the Majority Banks, such consent not to be unreasonably withheld or
      delayed) be entered into by the Borrower in respect of the Vessel.

(b)   Notwithstanding anything contained in this Clause 17.30:

      (i)   the Borrower shall remain liable under any Charter to perform all
            the obligations assumed by it under that Charter;

      (ii)  the Finance Parties shall not be under any obligations or liability
            under any Charter or liable to make any payment under that Charter;
            and

      (iii) the Finance Parties shall not be obliged to enforce against any
            charterer or shipper any term of any Charter, or to make any
            enquiries as to the nature or sufficiency of any payment received by
            a Finance Party.

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                                       53

(c)   The Borrower will not agree to any amendment or supplement to, or waive or
      fail to enforce any right under, any Charter or any of its provisions
      without the prior written consent of the Agent (acting on the instructions
      of the Majority Banks).

17.31 LEFT INTENTIONALLY BLANK

17.32 EARNINGS ACCOUNT

      The Borrower:

      (i)   prior to or on the Delivery Date will open, deposit euro 1 in and
            thereafter maintain an Earnings Account with JPMorgan Chase Bank,
            N.A. for the purpose of receiving the Earnings of the Vessel;

      (ii)  will procure that any and all Earnings of the Vessel are paid
            directly into the Earnings Account or as the Agent may from time to
            time direct;

      (iii) upon the occurrence of an Event of Default, gives to the Agent
            authority to withdraw amounts from the Earnings Account for
            application from time to time in or towards the outstanding amounts
            under the Finance Documents in accordance with the terms of the
            Finance Documents;

      (v)   at any time and from time to time upon the written request of the
            Agent, will execute and deliver any and all such further instruments
            and documents as the Agent may reasonably require for the purpose of
            obtaining the full benefit of the assignment of the Earnings and the
            Earnings Account to be effected by the Earnings Account Assignment
            and of the rights and powers granted under the Earnings Account
            Assignment; and

      (vi)  subject to (iii) above, will otherwise be entitled to freely dispose
            of the amounts standing to the credit of the Earnings Account.

17.33 SHARING OF EARNINGS

      The   Borrower shall not:

      (a)   enter into any agreement or arrangement for the sharing of any
            Earnings;

      (b)   enter into any agreement or arrangement for the postponement of any
            date on which Earnings are due; the reduction of the amount of any
            Earnings or otherwise for the release or adverse alteration of any
            right of the Borrower to the Earnings; or

      (c)   enter into any agreement or arrangement for the release of, or
            adverse alteration to, any guarantee or Security Interest relating
            to any Earnings.

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                                       54

17.34 LEFT DELIBERATELY BLANK

17.35 DISBURSEMENT ACCOUNT

      The Borrower:

      (a)   prior to or on the date of this Agreement will open, deposit euro 1
            therein and thereafter maintain a Disbursement Account with JPMorgan
            Chase Bank, N.A. for the purpose of crediting to it proceeds of
            Tranches pursuant to the terms and conditions of this Agreement;

      (b)   will procure that either the Guarantor, the Shareholder or any
            Affiliate of the Borrower will, at least 5 Business Days before the
            due date for the relevant Instalment, deposit in the Disbursement
            Account an amount equal to:

            (i)   in the case of the instalment referred to in Clause 6.2(c) of
                  the Memorandum of Agreement, euro 2,333,333;

            (ii)  in the case of the instalment referred to in Clause 6.2(d) of
                  the Memorandum of Agreement, euro 2,333,333; and

            (iii) in the case of the instalment referred to in Clause 6.2(e) of
                  the Memorandum of Agreement, euro 2,333,334; and

      (c)   will be permitted, subject to the Loan having been drawn down
            during the Commitment Period and all payments made to the
            Disbursement Account pursuant to Clause 17.35(b), to close the
            Disbursement Account.

17.36 LEFT DELIBERATELY BLANK

17.37 SCOPE OF OBLIGATORY INSURANCES

      The Borrower will:

      (a)   at all times up to and including the Delivery Date maintain in full
            force and effect Permissible Delays Insurances in an amount equal to
            at least euro 102,500 per day and procure that the Agent's name is
            endorsed on the policies relating to any such insurance as
            additional insured and loss payee;

      (b)   at all times after the Delivery Date keep the Vessel insured in the
            Required Amount, in euros or another approved currency (as approved
            by the Majority Banks) in the name of the Borrower or (if the Agent
            so requires) in the joint names of the Borrower and the Agent,
            without the Agent being liable but having the right to pay premiums,
            through brokers approved by the Agent against fire and usual marine
            risks (including hull and machinery and Excess Risks) with approved
            underwriters or insurance companies approved by the Agent and by
            policies in form and content approved by the Agent;

<PAGE>
                                       55

      (c)   at all times after the Delivery Date keep the Vessel insured in the
            Required Amount in the same manner as above against war risks
            (including risks of mines and all risks, whether or not regarded as
            war risks, London Blocking and Trapping Addendum and Lost Vessel
            Clause, excepted by the free of capture and seizure clauses in the
            standard form of Lloyds marine policy) either:

            (i)   with underwriters or insurance companies approved by the Agent
                  and by policies in form and content approved by the Agent; or

            (ii)  by entering the Vessel in an approved war risks association,

            and for the avoidance of doubt, such war risks insurance will
            include protection and indemnity liability up to at least the
            Required Amount, excluding any liability in respect of death, injury
            or damage to crew

      (d)   at all times after the Delivery Date keep the Vessel entered in
            respect of her full value and tonnage in an approved protection and
            indemnity association against all risks as are normally covered by
            such protection and indemnity association (including pollution risks
            and the proportion not recoverable in case of collision under the
            running down clause inserted in the ordinary Lloyds policies), such
            cover for pollution risks to be for:

            (i)   a minimum amount of US$1,000,000,000 or such other amount of
                  cover against pollution risks as shall at any time be
                  comprised in the basic entry of the Vessel with either a
                  protection and indemnity association which is an acceptable
                  member of either the "International Group" of protection and
                  indemnity associations (or any successor organisation
                  designated by the Agent for this purpose) or the International
                  Group (or such successor organisation) itself; or

            (ii)  if the International Group or any such successor ceases to
                  exist or ceases to provide or arrange any cover for pollution
                  risks (or any supplemental cover for pollution risks over and
                  above that afforded by the basic entry of the Vessel with its
                  protection and indemnity association), such aggregate amount
                  of cover against pollution risks as shall be available on the
                  open market and by basic entry with a protection and indemnity
                  association for ships of the same type, size, age and flag as
                  the Vessel,

            provided that, if the Vessel has ceased trading or is in lay up and
            in either case has unloaded all cargo, the level of pollution risks
            cover afforded by ordinary protection and indemnity cover available
            through a member of the International Group or such successor
            organisation or, as the case may be, on the open market in such
            circumstances shall be sufficient for such purposes;

      (e)   at all times after the Delivery Date maintain in full force and
            effect off-hire insurance in respect of the Vessel with underwriters
            or insurance companies approved by the Agent and by policies in form
            and content approved by the Agent and, at a minimum, insuring for
            off-hire periods of between 60 and 300 days per incident. The
            Borrower undertakes to procure (in consultation with the Arranger) a
            cover level of 130 per cent. of hire payable under the then current
            Charter; and

      (f)   at all times after the Delivery Date, whenever the Vessel is engaged
            in trade connected with Japan and when so required by the Banks,
            maintain in full force and

<PAGE>
                                       56

            effect social responsibility insurance in respect of the Vessel with
            underwriters or insurance companies approved by the Agent and by
            policies in form and content approved by the Agent.

17.38 MORTGAGEE'S INTEREST AND ADDITIONAL PERILS INSURANCES

      The Agent shall if so authorised by the Majority Banks be entitled from
      time to time to effect, maintain and renew all or any of the following
      insurances in such amounts, on such terms, through such insurers and
      generally in such manner as the Majority Banks may from time to time
      consider appropriate (such insurances not to be placed by the Borrower or
      its brokers (in their capacity as brokers to the Borrower)):

      (a)   a mortgagee's interest marine insurance providing for the
            indemnification of the Finance Parties for any losses under or in
            connection with any Finance Document which directly or indirectly
            result from loss of or damage to the Vessel or a liability of the
            Vessel or the Borrower, being a loss or damage which is prima facie
            covered by an Obligatory Insurance but in respect of which there is
            a non-payment (or reduced payment) by the underwriters by reason of,
            or on the basis of any allegation concerning:

            (i)   any act or omission on the part of the Borrower, of any
                  operator, Charterer, Manager or sub-manager of the Vessel or
                  of any officer, employee or agent of the Borrower or of any
                  such person, including any breach of warranty or condition or
                  any non-disclosure relating to such Obligatory Insurance;

            (ii)  any act or omission, whether deliberate, negligent or
                  accidental, or any knowledge or privity of the Borrower any
                  other person referred to in paragraph (i) above, or of any
                  officer, employee or agent of the Borrower or of such a
                  person, including the casting away or damaging of the Vessel
                  and/or the Vessel being unseaworthy; and/or

            (iii) any other matter capable of being insured against under a
                  mortgagee's interest marine insurance policy whether or not
                  similar to the foregoing;

      (b)   where the Vessel is trading into the waters of the United States of
            America or any other jurisdiction which in the future introduces
            unlimited liability regimes, a mortgagee's interest additional
            perils policy providing for the indemnification of the Agent
            against, amongst other things, any possible losses or other
            consequences of any Environmental Claim, including the risk of
            expropriation, arrest or any form of detention of the Vessel, or the
            imposition of any Security Interest over the Vessel and/or any other
            matter capable of being insured against under a mortgagee's interest
            additional perils (pollution) policy whether or not similar to the
            foregoing;

      (c)   charter indemnity insurance,

      and the Borrower shall upon demand fully indemnify the Agent in respect of
      all premiums which are incurred in connection with or with a view to
      effecting, maintaining or renewing any such insurance or dealing with, or
      considering, any matter arising out of any such insurance.

<PAGE>
                                       57

17.39 OBLIGATORY INSURANCES

      Without prejudice to its obligations under Clause 17.37 (Scope of
      Obligatory Insurances), the Borrower will:

      (a)   not without the prior consent of the Agent alter any Obligatory
            Insurance nor make, do, consent or agree to any act or omission
            which would or might render any Obligatory Insurance invalid, void,
            voidable or unenforceable or render any sum paid out under any
            Obligatory Insurance repayable in whole or in part;

      (b)   not cause or permit the Vessel to be operated in any way
            inconsistent with the provisions or warranties of, or implied in, or
            outside the cover provided by, any Obligatory Insurance or to be
            engaged in any voyage or to carry any cargo not permitted by the
            Obligatory Insurance without first covering the Vessel in the
            Required Amount and her freights for an amount approved by the Agent
            in euros or another approved currency with approved insurers;

      (c)   duly and punctually pay all premiums, calls, contributions or other
            sums of money from time to time payable in respect of any Obligatory
            Insurance;

      (d)   renew all Obligatory Insurances at least 14 days before the relevant
            policies or contracts expire and procure that the approved brokers
            and/or war risks and protection and indemnity clubs and associations
            shall promptly confirm in writing to the Agent as and when each
            renewal is effected;

      (e)   forthwith upon the effecting of any Obligatory Insurance, give
            written notice of the insurance to the Agent stating the full
            particulars (including the dates and amounts) of the insurance, and
            on request produce the receipts for each sum paid by it pursuant to
            paragraph (c) above;

      (f)   not settle, compromise or abandon any claim in respect of any Total
            Loss unless the Agent is satisfied that such release, compromise or
            abandonment will not prejudice any of the Banks' interests under or
            in relation to any Finance Document;

      (g)   arrange for the execution and delivery of such guarantees as may
            from time to time be required by any protection and indemnity or war
            risks club or association;

      (h)   procure that the interest of the Agent and the Banks is noted on all
            policies of insurance;

      (i)   procure that a loss payee provision in the form scheduled to the
            Insurances Assignment and reflecting the provisions of Clause 17.40
            (Application of Insurance Proceeds) is endorsed on all policies of
            insurance;

      (j)   obtain from the relevant insurance brokers P&I Club letters and
            undertakings in the forms scheduled to the General Assignment; and

      (k)   in the event that the Borrower receives payment of any moneys under
            the General Assignment, save as provided in the loss payable clauses
            scheduled to the General Assignment, forthwith pay over the same to
            the Agent and until paid over such moneys shall be held in trust for
            the Agent by the Borrower.

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                                       58

17.40 APPLICATION OF INSURANCE PROCEEDS

(a)   All sums receivable in respect of the Obligatory Insurances after the
      occurrence of an Event of Default shall be paid to the Agent and the Agent
      shall, unless otherwise instructed by the Majority Banks, apply them in
      accordance with Clause 10.7 (Payments).

(b)   Subject to paragraph (a) above:

      (i)   each sum receivable in respect of a major casualty (being any
            casualty in respect of which the claim or the aggregate of the
            claims exceeds euro 2,500,000 (or its equivalent)), other than in
            respect of protection and indemnity risk insurances, shall be paid
            to the Agent; and

      (ii)  the insurance moneys received by the Agent in respect of any such
            major casualty shall be paid:

            (A)   to the person to whom the relevant liability shall have been
                  incurred; or

            (B)   upon the Borrower furnishing evidence satisfactory to the
                  Agent that all loss and damage resulting from the casualty has
                  been properly made good and repaired, to the Borrower or, at
                  the option of the Agent, to the person by whom any repairs
                  have been or are to be effected.

      The receipt of any such person shall be a full and sufficient discharge of
      the same to the Agent.

(c)   Subject to paragraph (a) above, each sum receivable in respect of the
      Obligatory Insurances (insofar as the same are hull and machinery or war
      risks insurances) which does not exceed E2,500,000 or its equivalent
      shall be paid in full to the Borrower or to its order and shall be applied
      by it for the purpose of making good the loss and fully repairing all
      damage in respect of which the receivable shall have been collected.

(d)   Subject to paragraph (a) above, each sum receivable in respect of the
      Permissible Delays Insurances shall be paid to the Borrower and shall be
      applied by it in satisfaction of its obligation to pay liquidated damages
      for delay to the Time Charterer under the Time Charter. In the event that
      the sum received in respect of the Permissible Delays Insurances is
      greater than the amount which the Borrower is required to pay to the Time
      Charterer in settlement of its obligation to pay liquidated damages for
      delay under the Time Charter, the Borrower shall pay the surplus into the
      Earnings Account immediately following the payment to the Time Charterer.

(e)   Subject to paragraph (a) above, each sum receivable in respect of
      protection and indemnity risk Obligatory Insurances shall be paid direct
      to the person to whom the liability, to which that sum relates, was
      incurred, or to the Borrower in reimbursement to it of moneys expended in
      satisfaction of such liability.

(f)   Notwithstanding any other provision in this Clause 17.40, all sums
      receivable in respect of Obligatory Insurances relating to a Total Loss
      shall be applied in accordance with Clause 17.29(a) (Proceeds from sale or
      Total Loss of the Vessel).

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                                       59

17.41 POWER OF AGENT TO INSURE

      If the Borrower fails to effect and keep in force Obligatory Insurances in
      accordance with this Agreement, it shall be permissible, but not
      obligatory, for the Agent to effect and keep in force insurance or
      insurances in the amounts required under this Agreement and entries in a
      protection and indemnity association or club and, if it deems necessary or
      expedient to it, to insure the war risks upon the Vessel, and the Borrower
      will reimburse the Agent for the costs of so doing.

17.42 ISM CODE

      The Borrower shall:

      (a)   at all times after the Delivery Date comply, and be responsible for
            compliance by itself and by the Vessel, with the ISM Code;

      (b)   at all times after the Delivery Date ensure that:

            (i)   the Vessel has a valid Safety Management Certificate;

            (ii)  the Vessel is subject to a safety management system which
                  complies with the ISM Code; and

            (iii) it, or the Manager from time to time, has a valid Document of
                  Compliance for the Vessel, which it holds on board the Vessel,

            and shall deliver to the Agent, on or before the Delivery Date, a
            copy for each Bank of a valid Safety Management Certificate and a
            valid Document of Compliance in respect of the Vessel, in each case
            duly certified by an officer of the Borrower or of the Manager from
            time to time;

      (c)   promptly notify the Agent of any actual or, upon becoming aware of
            the same, threatened withdrawal of an applicable Safety Management
            Certificate or Document of Compliance;

      (d)   promptly notify the Agent of the identity of the person ashore
            designated for the purposes of paragraph 4 of the ISM Code and of
            any change in the identity of that person; and

      (e)   promptly upon becoming aware of the same notify the Agent of the
            occurrence of any accident or major non-conformity requiring action
            under the ISM Code.

17.43 NO AMENDMENT TO RELATED CONTRACTS

(a)   The Borrower shall not amend or agree to any amendment to the Related
      Contracts without the prior written consent of:

      (i)   in respect of the Obligatory Insurances, the Agent;

      (ii)  whilst and for so long as Stage One is in effect, in respect of any
            material amendment to any of the Stage One Documents or, as the case
            may be, after Stage Two has been implemented, any of the Stage Two
            Documents (including, without limitation, any amendment to any of
            the Stage One Documents or, as the case may be, any of the


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                                       60

            Stage Two Documents which has the effect of extending the date of
            delivery of the Vessel under the Shipbuilding Contract beyond two
            hundred and thirty (230) days after the Expected Delivery Date), the
            Agent (acting on the instructions of all of the Banks);

      (iii) at any time whilst Stage Two is not in effect, in respect of any
            amendment to any of the Stage Two Documents from the form of those
            documents as annexed to the Memorandum of Agreement, the Agent
            (acting on the instruction of all of the Banks); and

      (iv)  in respect of any Related Contracts (other than those referred to in
            sub-paragraphs (i) and (ii) above), the Agent (acting on the
            instructions of the Majority Banks).

(b)   In the event the date of delivery of the Vessel is delayed for two hundred
      and thirty (230) days beyond the Expected Delivery Date, the Borrower
      shall, if required in writing to do so by the Agent exercise, or procure
      the exercise of the right of rescission of the Shipbuilding Contract
      pursuant to Articles VIII.4 and IX BIS thereof.

17.44 STAGE TWO DOCUMENTS

(a)   If the Builder proposes Stage Two Documents which contain changes or
      amendments from the form of the Stage Two Documents annexed to the
      Memorandum of Agreement, the Borrower shall:

      (i)   not approve the changes and amendments to those Stage Two Documents
            without the prior written consent of the Agent (acting on the
            instructions of all of the Banks);

      (ii)  exercise (or refrain from exercising) its right to object to the
            changes or amendments to those Stage Two Documents under the terms
            of Clause 3.2 of the Memorandum of Agreement only in accordance with
            the directions of the Agent (acting on the instructions of the
            Majority Banks); and

      (iii) not enter the Stage Two Documents unless and until the Agent has
            confirmed that all of the conditions precedent set out in Schedule 2
            Part II have been satisfied in full.

(b)   whilst and for so long as Stage Two is in effect, if the Borrower receives
      title to the Vessel (whether by exercise of the purchase option or the put
      option in Clauses 31 and 30 respectively of the Bareboat Charter or
      otherwise), the Borrower shall simultaneously with taking title, execute
      in favour of the Agent a mortgage of the Vessel in the form of Appendix A,
      Part I.

17.45 PRE-APPROVAL OF MORTGAGE AND SWAP BANK MORTGAGE

      In the event the Registrar of Ships in the Canary Islands requires any
      amendment to be made to the form of Mortgage set out in Appendix A or to
      the form of Swap Bank Mortgage set out in Appendix B for the purpose of
      pre-approval of the same, the Borrower authorises the Agent to agree such
      amendments as are required to obtain such pre-approval.

17.46 UNDERTAKINGS IN RELATION TO THE SWAP AGREEMENT

(a)   Undertakings relating to Swap Debt:

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                                       61

      (i)   So long as any amount under this Agreement is or may become
            outstanding, no Swap Bank will (except as the Agent (acting on the
            instructions of all Banks) has previously agreed in writing):

            (A)   demand (except to terminate or close out any swap transaction
                  as permitted under paragraph (B) below) or receive payment,
                  prepayment or repayment of, and the Borrower will not pay or
                  make any distribution in respect of, or on account of, any of
                  the Swap Debt in cash or in kind, or apply any money or
                  property in or towards the payment or discharge of any Swap
                  Debt except:

                  (x)   for scheduled payments arising under the original terms
                        of the Swap Agreement or the terms of the Swap Agreement
                        as amended in accordance with the terms of this
                        Agreement; and/or

                  (y)   for the proceeds of enforcement of the Security
                        Documents received and applied accordance with Clause
                        10.7 of this Agreement;

            (B)   exercise any right to terminate or close out any swap
                  transaction under the Swap Agreement prior to its originally
                  stated maturity or the terms of the Swap Agreement as amended
                  in accordance with the terms of this Agreement unless any
                  action has been taken by the Agent under Clause 19.20
                  (Acceleration); or

            (C)   discharge by set-off, any right of combination of accounts or
                  otherwise any of the Swap Debt except to the extent such Swap
                  Debt is permitted to be paid under paragraph (A) above; or

            (D)   take any steps to enforce its rights under the Swap Bank
                  Mortgage;

      (ii)  subject to sub-paragraph (iii) below, so long as any amount under
            this Agreement is or may become outstanding, no Swap Bank may agree
            any amendment to the Swap Agreement to which it is a party without
            the prior written consent of all of the other Swap Banks;

      (iii) so long as any amount under this Agreement is or may become
            outstanding, if JP Morgan Chase Bank, N.A. (in its capacity as a
            Swap Bank) agrees any amendment to the Swap Agreement to which it is
            a party, and such amendment(s) result from a Tranche being drawn
            down or the Vessel being delivered on a date other than the relevant
            expected date, each other Swap Bank hereby undertakes to amend the
            Swap Agreement to which it is a party on the same terms; and

      (iv)  so long as any amount under this Agreement is or may become
            outstanding, the Borrower will not (except as the Agent (acting on
            the instructions of the Majority Banks) has previously agreed in
            writing) create or permit to subsist any Security Interest over any
            of its assets or give any financial support to any person for, in
            respect of or in connection with, any of the Swap Debt other than
            under the original terms of the Swap Agreements or the Security
            Documents.

(b)   Two Way Payments:

      The Borrower and the Swap Banks agree that:

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                                       62

      (i)   each Swap Agreement will provide for "two way payments" or payments
            under the "Second Method" in the event of a termination of a swap
            transaction whether upon a Termination Event or an Event of Default
            (in each case as defined in the Swap Agreement);

      (ii)  on or following the occurrence of an enforcement of an Event of
            Default if an amount falls due from any Swap Bank to the Borrower,
            that amount shall be paid by the relevant Swap Bank to the Agent for
            application in accordance with Clause 10.7 of this Agreement; and

      (iii) promptly upon the taking by the Agent of any action under Clause
            19.20 (Acceleration), if instructed to do so by the Agent (acting on
            the instructions of the Majority Banks), the Swap Banks will
            exercise any rights they may have to terminate the swap transactions
            under the Swap Agreements.

(c)   Swap Agreement:

      The Swap Banks will provide to the Agent copies of all agreements and
      documents constituting or evidencing any swap facilities provided to the
      Borrower.

17.47 TIME CHARTER

      The Borrower may not exercise any termination rights under the Time
      Charter without the prior written consent of the Agent (acting on the
      instruction of all of the Banks).

18.   VALUATION

18.1  VALUATION

      For the purposes of this Clause 18:

      (a)   the value of the Vessel shall be the mean average of two valuations
            each certified in euro and carried out by two of the Approved
            Valuers, one selected by the Agent and one selected by the Borrower
            (or by the Agent if the Borrower does not make a selection within
            five (5) Business Days of being requested to do so by the Agent) and
            both reporting to the Agent on the basis of sale for prompt delivery
            of the Vessel for cash (free of Security Interests) at arm's-length
            on normal commercial terms as between willing seller and buyer;

      (b)   any valuation shall be on a without Charter basis; and

      (c)   there shall be deducted from any value or valuation the amount which
            is owing and might become owing and which is secured on the asset
            concerned by any prior or equal ranking Security Interest (other
            than in favour of the Finance Parties to secure the Secured
            Liabilities).

18.2  DELIVERY OF VALUATIONS

(a)   The Borrower will from the Delivery Date procure one valuation of the
      Vessel per annum from two of the Approved Valuers prepared in accordance
      with Clause 18.1 (Valuation).

(b)   The Borrower will procure in favour of the Agent on behalf of the Finance
      Parties and the Approved Valuers all such information, facilities and
      rights of inspection as they may

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                                       63

      reasonably (having regard to the use and operation of the Vessel under
      charter) require in order to effect such valuations.

(c)   All valuations shall be at the expense of the Borrower.

(d)   If an Event of Default has occurred and is continuing, the Borrower shall
      be liable to pay for up to five valuations of the Vessel (one from each of
      the Approved Valuers) under Clause 18.2(a) in any one calendar year.

(e)   Any valuation under this Clause 18 shall be binding and conclusive as
      regards the Borrower.

19.   DEFAULT

19.1  EVENTS OF DEFAULT

      Each of the events set out in Clauses 19.2 (Non-Payment) to 19.18
      (Litigation) (inclusive) is an Event of Default (whether or not caused by
      any reason whatsoever outside the control of the Borrower or any other
      person).

19.2  NON-PAYMENT

      The Borrower does not pay on the due date any amount of principal or
      interest payable by it under the Finance Documents or any payment due
      under Section 2 of any Swap Agreement at the place at and in the currency
      in which it is expressed to be payable, or (where no grace period is
      specified in this Agreement) any other amount payable by it under the
      Finance Document is not paid within two Business Days of the due date (in
      the case of an amount due on demand, the due date is the date of the
      demand) at the place and in the currency in which it is expressed to be
      payable.

19.3  BREACH OF SPECIFIC OBLIGATIONS

The Borrower does not comply with any of its obligations under Clause 17.37
      (Scope of Obligatory Insurances) or Clause 17.39 (Obligatory Insurances).

19.4  BREACH OF OTHER OBLIGATIONS

      The Borrower or the Guarantor does not comply with any provision of the
      Finance Documents (other than those referred to in Clause 19.2
      (Non-Payment) or Clause 19.3 (Breach of specific obligations)) and that
      failure to comply is, if capable of remedy within 15 days, not remedied
      within 15 days of the earlier of:

      (a)   the Agent notifying the Borrower or the Guarantor of that failure;
            and

      (b)   the Borrower or the Guarantor becoming aware of the same;

      or, if the default is capable of remedy but not within the said period of
      15 days, in the opinion of the Agent, the Borrower or, as the case may be,
      the Guarantor, fails within the said period of 15 days to exercise due
      diligence in taking steps to remedy the default in question at the
      earliest practicable opportunity.

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                                       64

19.5  MISREPRESENTATION

(a)   A representation, warranty or statement made or repeated in or in
      connection with any Finance Document or in any document delivered by or on
      behalf of the Borrower or the Guarantor under or in connection with any
      Finance Document is incorrect in any material respect when made or deemed
      to be made or repeated.

(b)   If the failure or omission giving rise to the misrepresentation under
      paragraph (a) above is capable of remedy, that failure or omission is not
      remedied within 14 days of the earlier of:

      (i)   the Agent notifying the Borrower or the Guarantor of the failure or
            omission; and

      (ii)  the Borrower or the Guarantor becoming aware of the same.

19.6  REGISTRATION OF MORTGAGE AND SWAP BANK MORTGAGE

      The Mortgage and the Swap Bank Mortgage are not approved by the Registrar
      of Ships in the Canary Islands and fully and effectively registered in
      accordance with the laws of Spain within sixty (60) days of the Delivery
      Date.

19.7  CROSS-DEFAULT

(a)   Any Financial Indebtedness of the Borrower or the Guarantor is not paid
      when due (or within any applicable grace period) or if it falls within
      Clause 17.14(c) (Limitation on Financial Indebtedness), is not being
      disputed in accordance with Clause 17.14(c) (Limitation on Financial
      Indebtedness);

(b)   an event of default howsoever described occurs under any document relating
      to any Financial Indebtedness of the Borrower or the Guarantor;

(c)   any guarantee of Financial Indebtedness given by the Borrower or the
      Guarantor is not honoured when due and called upon or within five Business
      Days thereafter;

(d)   any Security Interest securing Financial Indebtedness over any asset of
      the Borrower or the Guarantor is enforced;

(e)   any breach or default under any Swap Agreement or any Swap Agreement is
      terminated for any reason;

(f)   the Borrower or the Guarantor is in default or breach under any of the
      Related Contracts (other than a default or breach of the Sales Contract
      whilst and for so long as Stage One is in effect or the Master Agreement
      whilst and for so long as Stage Two is in effect or the Time Charter which
      arises solely as a result of a suspension of advances pursuant to Clause
      12.3 (Suspension of drawdowns)) or any of the Related Contracts is
      otherwise terminated or ceases to be in full force and effect (unless such
      termination or cessation is contemplated as part of the implementation of
      Stage Two and the provisions of Clause 17.45 (Stage Two Documents) are
      complied with) or becomes illegal or unenforceable, and in the case of a
      Technical Management Agreement or a Vessel Management Contract, is not
      replaced in accordance with the provisions of Clause 17.28(e)
      (Management); or

(g)   the Guarantor or any Affiliate of the Guarantor is in default (howsoever
      described) or breach of any material liability or obligation under any:

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                                       65

      (i)   Charter or other contract for the employment of; and/or

      (ii)  agreement relating to any Financial Indebtedness in relation to,

      a vessel under the management of the Guarantor or any Affiliate of the
      Guarantor, and for the avoidance of doubt if any material litigation has
      been commenced against the Guarantor or any Affiliate of the Guarantor
      under any such agreement and in the opinion of the Agent such material
      litigation is reasonably likely to have a Material Adverse Effect if
      adversely determined against the Guarantor or the relevant Affiliate, this
      shall amount to a breach or default under such agreement; or

(h)   the Borrower enters into the Stage Two Documents in circumstances where
      the provisions of Clause 17.45 (Stage Two Documents) have not been fully
      complied with and/or the conditions precedent set out in Schedule 2 Part
      II have not been satisfied in full.

19.8  INSOLVENCY

(a)   The Borrower or the Guarantor is, or is deemed for the purposes of any law
      to be, unable to pay its debts as they fall due or to be insolvent, or
      admits inability to pay its debts as they fall due;

(b)   the Borrower or the Guarantor makes a general assignment for the benefit
      of its creditors; or

(c)   the Borrower or the Guarantor, other than by reason of a voluntary
      restructuring approved in advance by the Agent (acting on the instructions
      of the Majority Banks), begins negotiations with one or more of its
      creditors for readjustment or rescheduling of any of its Financial
      Indebtedness.

19.9  INSOLVENCY PROCEEDINGS

(a)   The Borrower or the Guarantor applies for the declaration of insolvency
      ("concurso") or consents to the appointment of a receiver, administrator,
      trustee, liquidator or similar officer of itself or of all or a material
      part of its assets, or if a third party applies for the insolvency of the
      Borrower or the Guarantor.

(b)   Any petition, application, proposal or order is made or resolution passed
      or proposed for the liquidation, administration, winding-up, insolvency or
      dissolution of the Borrower or the Guarantor or for a moratorium on any of
      its debts.

19.10 APPOINTMENT OF RECEIVERS AND MANAGERS

(a)   Any liquidator, trustee in bankruptcy, judicial custodian, compulsory
      manager, receiver, administrative receiver, administrator or the like is
      appointed in respect of the Borrower or the Guarantor or any substantial
      part of its assets; or

(b)   any other steps are taken to enforce any Security Interest over any
      substantial part of the assets of the Borrower or the Guarantor which
      steps are not discontinued within 30 days or, if not so discontinued, the
      Agent is satisfied and continues to be satisfied that the claim is being
      adequately contested and pursued with due diligence.

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                                       66

19.11 CREDITORS' PROCESS

      Any attachment, sequestration, distress or execution affects any asset of
      the Borrower or the Guarantor and is not discharged within 14 days of the
      same being so levied or sued out.

19.12 ANALOGOUS PROCEEDINGS

      There occurs, in relation to the Borrower or the Guarantor any event
      analogous to or having a substantially similar effect to any of the events
      specified in Clauses 19.8 to 19.11 inclusive under the laws of any
      applicable jurisdiction.

19.13 CESSATION OF BUSINESS

      The Borrower or the Guarantor ceases to carry on all or a substantial part
      of its business.

19.14 CHANGE OF CONTROL

      Any single person, or group of persons acting in concert, acquires direct
      or indirect control of the Borrower or the Guarantor. For the purposes of
      this Clause 19.14 "control" means ownership of more than fifty per cent.
      of the voting share capital of the Borrower or the Guarantor or such
      direct or indirect ownership so as to be able to direct its policies or
      management by contract.

19.15 UNLAWFULNESS

      It is or becomes unlawful for:

      (a)   the Borrower or the Guarantor to perform any of the material terms
            of the Finance Documents; or

      (b)   a Finance Party to exercise any material right or power vested in it
            under any Finance Document.

19.16 MATERIAL ADVERSE CHANGE

      Any event or series of events occurs after the date of this Agreement
      which could reasonably be expected to have a Material Adverse Effect
      unless that event or series of events is remediable and is remedied within
      14 days of its occurrence provided that, without prejudice to any action
      already taken by the Finance Parties in accordance with this Agreement,
      the Event of Default shall cease if, during that 14 days' period, the
      event or series of events ceases to have or ceases to be reasonably likely
      to have a Material Adverse Effect.

19.17 IMPERILMENT

      Any circumstances occur or are threatened in relation to the state of the
      flag of the Vessel or the jurisdiction or incorporation of the Borrower or
      the Guarantor which would reasonably be expected to imperil the interests
      of the Finance Parties under any Finance Document unless other
      arrangements satisfactory to the Majority Banks are made to remove such
      peril.

19.18 LITIGATION

      Any litigation, arbitration or administrative procedures are commenced
      against the Borrower or the Guarantor, unless the Borrower or, as the case
      may be, the Guarantor demonstrates to

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                                       67

      the Agent within 14 days of that commencement that the litigation,
      arbitration or administrative procedures are not reasonably likely to be
      adversely determined or, if so adversely determined, could not reasonably
      be expected to have a Material Adverse Effect.

19.19 PRE-APPROVAL OF MORTGAGE

      The Borrower has not, by the date falling 90 days from the first Drawdown
      Date, obtained pre-approval of the Mortgage and the Swap Bank Mortgage
      from the Registrar of Ships in the Canary Islands.

19.20 ACCELERATION

      On and at any time after the occurrence of an Event of Default and while
      the Event of Default is continuing the Agent (acting on the instructions
      of the Majority Banks) may by notice to the Borrower:

      (a)   cancel the Total Commitments; and/or

      (b)   demand that all or part of the Loan, together with accrued interest,
            and all other amounts accrued under this Agreement, be immediately
            due and payable, whereupon they shall become immediately due and
            payable; and/or

      (c)   demand that all or part of the Loan be payable on demand whereupon
            it shall immediately become payable on demand by the Agent.

20.   THE AGENT AND THE FINANCE PARTIES

20.1  APPOINTMENT AND DUTIES OF THE AGENT

(a)   Each Finance Party (other than the Agent) irrevocably appoints the Agent
      to act as its agent under and in connection with the Finance Documents.

(b)   Each Party appointing the Agent, irrevocably authorises the Agent on its
      behalf to perform the duties and to exercise the rights, powers and
      discretions that are specifically delegated to it under or in connection
      with the Finance Documents, together with any other reasonably incidental
      or desirable rights, powers and discretions.

(c)   The Agent has only those duties which are expressly specified in the
      Finance Documents. Those duties are solely of a mechanical and
      administrative nature.

(d)   Each Bank (in the case of each existing Bank at the date of this
      Agreement, on or before the date of this Agreement, and in the case of any
      New Bank, on or before the date the novation referred to in Clause 27.3
      (Procedure for novations) becomes effective) will enter into a power of
      attorney in favour of the Spanish Security Agent in the form of Schedule 9
      (Form of Bank's Power of Attorney) in all substantive respects.

20.2  APPOINTMENT AND DUTIES OF THE SPANISH SECURITY AGENT

(a)   Each Finance Party (other than the Agent and the Spanish Security Agent)
      irrevocably appoints the Spanish Security Agent to act as its agent and
      attorney under and in connection with the Mortgage, the Swap Bank Mortgage
      and the Pledge of Shares for the purposes specified in this Clause 20.2.

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                                       68

(b)   Each Party appointing the Spanish Security Agent irrevocably authorises
      the Spanish Security Agent on its behalf to perform the duties and to
      exercise the rights, powers and discretions that are necessary to
      administer and, upon the instructions of the Majority Banks (through the
      Agent) enforce (and collect the proceeds of such enforcement) the
      Mortgage, the Swap Bank Mortgage and the Pledge of Quota Shares.

(c)   The Spanish Security Agent's duties, rights, powers and discretions are
      limited to those referred to in paragraph (b) above.

(d)   Any and all monies received by the Spanish Security Agent or any Swap Bank
      as a result of the enforcement of the Mortgage, the Swap Bank Mortgage
      and/or the Pledge of Quota Shares shall be paid forthwith to the Agent for
      application in accordance with this Agreement.

20.3  ROLE OF THE ARRANGER

      Except as otherwise provided in this Agreement, the Arranger has no
      obligations of any kind to any other Party under or in connection with any
      Finance Document.

20.4  RELATIONSHIP

      The relationship between each of the Agent and the Spanish Security Agent
      with the other Finance Parties is that of agent and principal only. Except
      as contemplated by the Security Documents, nothing in this Agreement
      constitutes either of the Agent or the Spanish Security Agent as trustee
      or fiduciary for any other Party or any other person and the Agent need
      not hold in trust any moneys paid to it for a Party or be liable to
      account for interest on those moneys.

20.5  MAJORITY BANKS' INSTRUCTIONS

      Each of the Agent and the Spanish Security Agent will be fully protected
      if it acts in accordance with the instructions of the Majority Banks in
      connection with the exercise of any right, power or discretion or any
      matter not expressly provided for in the relevant Finance Documents and
      will promptly notify the Banks of any such event. Any such instructions
      given by the Majority Banks will be binding on all the Banks. In the
      absence of such instructions the Agent and the Spanish Security Agent may
      act as they reasonably consider to be in the best interests of all the
      Banks.

20.6  DELEGATION

      Each of the Agent and the Spanish Security Agent may act under the
      relevant Finance Documents through their personnel and agents.

20.7  RESPONSIBILITY FOR DOCUMENTATION

      Neither the Agent, the Spanish Security Agent nor the Arranger is
      responsible to any other Party for:

      (a)   the execution, genuineness, validity, enforceability or sufficiency
            of any Finance Document or any other document (save in respect of
            the execution thereof by the Agent or Arranger, as the case may be);

      (b)   the collectability of amounts payable under any Finance Document; or

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                                       69

      (c)   the accuracy of any statements (whether written or oral) made in or
            in connection with any Finance Document (including the Information
            Memorandum).

20.8  DEFAULT

(a)   Neither the Agent nor the Spanish Security Agent is obliged to monitor or
      enquire as to whether or not a Default has occurred. Neither the Agent nor
      the Spanish Security Agent will be deemed to have knowledge of the
      occurrence of a Default. However, if the Agent or the Spanish Security
      Agent receives notice from a Party referring to this Agreement, describing
      the Default and stating that the event is a Default, it shall promptly
      notify the Banks.

(b)   The Agent and/or the Spanish Security Agent may require the receipt of
      security satisfactory to it whether by way of payment in advance or
      otherwise, against any liability or loss which it will or may incur in
      taking any proceedings or action arising out of or in connection with any
      Finance Document before it commences these proceedings or takes that
      action.

20.9  EXONERATION

(a)   Without limiting paragraph (b) below, neither the Agent nor the Spanish
      Security Agent will be liable to any other Party for any action taken or
      not taken by it under or in connection with any Finance Document, unless
      directly caused by the Agent's reckless disregard with knowledge of the
      probable consequences or wilful misconduct or by the wilful misconduct of
      any agent of the Agent or the Spanish Security Agent.

(b)   No Party may take any proceedings against any officer, employee or agent
      of the Agent or the Spanish Security Agent in respect of any claim it
      might have against the Agent or the Spanish Security Agent or in respect
      of any act or omission of any kind (including reckless disregard with
      knowledge of the probable consequences or wilful misconduct) by that
      officer, employee or agent in relation to any Finance Document.

20.10 RELIANCE

      Each of the Agent and the Spanish Security Agent may:

      (a)   rely on any notice or document believed by it to be genuine and
            correct and to have been signed by, or with the authority of, the
            proper person;

      (b)   rely on any statement made by a director or employee of any person
            regarding any matters which may reasonably be assumed to be within
            his knowledge or within his power to verify; and

      (c)   engage, pay for and rely on legal or other professional advisers
            selected by it (including those in the Agent's or, as the case may
            be, the Spanish Security Agent's employment and those representing a
            Party other than the Agent).

20.11 CREDIT APPROVAL AND APPRAISAL

      Without affecting the responsibility of the Borrower for information
      supplied by it or on its behalf in connection with any Finance Document,
      each Finance Party confirms that it:

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                                       70

      (a)   has made its own independent investigation and assessment of the
            financial condition and affairs of the Borrower and its related
            entities in connection with its participation in this Agreement and
            has not relied exclusively on any information provided to it by the
            Agent, the Spanish Security Agent or the Arranger in connection with
            any Finance Document; and

      (b)   will continue to make its own independent appraisal of the
            creditworthiness of the Borrower and its related entities while any
            amount is or may be outstanding under the Finance Documents or any
            Commitment is in force.

      For the avoidance of doubt, the Borrower shall not be liable to pay for
      the costs and expenses of any Finance Party in relation to steps taken in
      connection with the matters referred to in paragraphs (a) and (b) above.

20.12 INFORMATION

(a)   Each of the Agent and the Spanish Security Agent shall promptly forward to
      the person concerned the original or a copy of any document which is
      delivered to the Agent or, as the case may be, the Spanish Security Agent
      by a Party for that person.

(b)   The Agent and the Spanish Security Agent shall promptly supply a Bank with
      a copy of each document received by the Agent and the Spanish Agent
      respectively under Clause 4 (Conditions Precedent), Clause 17
      (Undertakings) and Clause 18 (Valuation) upon the request and at the
      reasonable expense of that Bank except that bank shall not be liable for
      any expense in relation to information supplied by the Borrower to the
      Agent in accordance with Clause 17.3 (Financial information), Clause 17.37
      (Scope of Obligatory Insurances) and Clause 18.2 (Delivery of Valuations).

(c)   Except where this Agreement specifically provides otherwise, neither the
      Agent nor the Spanish Security Agent is obliged to review or check the
      accuracy or completeness of any document it forwards to another Party.

(d)   Except as provided above, neither the Agent nor the Spanish Security Agent
      has any duty:

      (i)   either initially or on a continuing basis to provide any Bank with
            any credit or other information concerning the financial condition
            or affairs of the Borrower or any related entity of the Borrower
            whether coming into its possession or that of any of its related
            entities before, on or after the date of this Agreement; or

      (ii)  unless specifically requested to do so by a Bank in accordance with
            a Finance Document, to request any certificates or other documents
            from the Borrower.

20.13 THE AGENT, THE SPANISH SECURITY AGENT AND THE ARRANGER INDIVIDUALLY

(a)   If it is also a Bank, each of the Agent, the Spanish Security Agent and
      the Arranger has the same rights and powers under this Agreement as any
      other Bank and may exercise those rights and powers as though it were not
      the Agent, the Spanish Security Agent or the Arranger.

(b)   Each of the Agent, the Spanish Security Agent and Arranger may:

      (i)   carry on any business with the Borrower or its related entities;

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                                       71

      (ii)  act as agent or trustee for, or in relation to any financing
            involving, the Borrower or its related entities; and

      (iii) retain any profits or remuneration in connection with its activities
            under this Agreement or in relation to any of the foregoing.

(c)   In acting as the Agent or, as the case may be, the Spanish Security Agent,
      the agency division of the Agent or, as the case may be, the Spanish
      Security Agent will be treated as a separate entity from its other
      divisions and departments. Any information acquired by the Agent or, as
      the case may be, the Spanish Security Agent which, in its opinion, is
      acquired by it otherwise than in its capacity as the Agent or, as the case
      may be, the Spanish Security Agent may be treated as confidential by the
      Agent or, as the case may be, the Spanish Security Agent and will not be
      deemed to be information possessed by the Agent in its capacity as such.

(d)   The Borrower irrevocably authorises the Agent and the Spanish Security
      Agent to disclose to the other Finance Parties any information which, in
      its opinion, is received by it in its capacity as the Agent or, as the
      case may be, the Spanish Security Agent.

(e)   Each of the Agent and the Spanish Agent may deduct from any amount
      received by it for the Banks pro rata any unpaid fees, costs and expenses
      of the Agent or, as the case may be, the Spanish Security Agent incurred
      by it in connection with the relevant Finance Documents.

20.14 INDEMNITIES

(a)   Without limiting the liability of the Borrower under the Finance
      Documents, each Finance Party shall forthwith on demand indemnify each of
      the Agent and the Spanish Security Agent for that Finance Party's
      proportion of any liability or loss incurred by the Agent or, as the case
      may be, the Spanish Security Agent in any way relating to or arising out
      of its acting as the Agent or, as the case may be, the Spanish Security
      Agent, except to the extent that the liability or loss arises directly
      from:

      (i)   the Agent's or, as the case may be, the Spanish Security Agent's
            wilful misconduct or reckless disregard with knowledge of the
            probable consequences; or

      (ii)  the Borrower's failure to make any payment to the Agent or the
            Spanish Security Agent in respect of the management time of the
            Agent or the Spanish Security Agent pursuant to Clause 20.19
            (Extraordinary management time and resources).

(b)   A Bank's proportion of the liability or loss set out in paragraph (a)
      above is the proportion of its participation in the relevant Tranche (if
      any) on the date of the demand. If, however, the relevant Tranche is not
      outstanding on the date of demand, then the proportion will be the
      proportion which its Commitment bears to the Total Commitments at the date
      of demand or, if the Total Commitments have been cancelled, bore to the
      Total Commitments immediately before being cancelled.

(c)   The Borrower shall forthwith on demand reimburse each Bank for any payment
      made by it under paragraph (a) above.

20.15 COMPLIANCE

(a)   Each of Agent and the Spanish Security Agent may refrain from doing
      anything which might, in its opinion, constitute a breach of any law or
      regulation binding or applicable to it or be

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                                       72

      otherwise actionable at the suit of any person, and may do anything which,
      in its opinion, is necessary or desirable to comply with any law or
      regulation of any jurisdiction.

(b)   Without limiting paragraph (a) above, neither the Agent nor the Spanish
      Security Agent need disclose any information relating to the Borrower or
      any of its related entities if the disclosure might, in the opinion of the
      Agent, or, as the case may be, the Spanish Security Agent constitute a
      breach of any law or regulation or any duty of secrecy or confidentiality
      or be otherwise actionable at the suit of any person.

20.16 RESIGNATION OF AGENT AND SPANISH SECURITY AGENT

(a)   Notwithstanding its irrevocable appointment, and subject to sub-paragraph
      (g) below either or both of the Agent and the Spanish Security Agent may
      resign by giving notice to the Finance Parties and the Borrower, in which
      case the Agent may forthwith appoint one of its Affiliates as successor
      Agent with the approval of the Borrower (such approval not to be
      unreasonably withheld or delayed) or, failing that, the Majority Banks may
      appoint a successor Agent. The Spanish Security Agent may appoint one of
      the other Banks as successor Spanish Security Agent with the approval of
      the Borrower (such approval not to be unreasonably withheld or delayed)
      or, failing that, the Majority Banks may appoint one of the Banks as a
      successor Spanish Security Agent.

(b)   If the appointment of a successor Agent or, as the case may be, the
      Spanish Security Agent is to be made by the Majority Banks but they have
      not, within 30 days after notice of resignation, appointed a successor
      Agent which accepts the appointment, the retiring Agent or, as the case
      may be, the retiring Spanish Security Agent may appoint a successor Agent
      or, as the case may be, a successor Spanish Security Agent (in the case of
      the latter being one of the Banks) with the approval of the Borrower (such
      approval not to be unreasonably withheld).

(c)   The resignation of the retiring Agent or, as the case may be, the Spanish
      Security Agent and the appointment of any successor Agent or, as the case
      may be, any successor Spanish Security Agent will both become effective
      only upon the successor Agent or, as the case may be, the successor
      Spanish Security Agent notifying all the Parties that it accepts the
      appointment. On giving the notification, the successor Agent or, as the
      case may be, the successor Spanish Security Agent will succeed to the
      position of the retiring Agent or, as the case may be, the successor
      Spanish Security Agent and the terms "AGENT" and "SPANISH SECURITY AGENT"
      respectively will mean the successor Agent or, as the case may be, the
      successor Spanish Security Agent.

(d)   The retiring Agent or, as the case may be, the retiring Spanish Security
      Agent shall, at its own cost, make available to the successor Agent or, as
      the case may be, the successor Spanish Security Agent such documents and
      records and provide such assistance as the successor Agent or, as the case
      may be, the Spanish Security Agent may reasonably request for the purposes
      of performing its functions as the Agent or, as the case may be, the
      successor Spanish Security Agent under this Agreement.

(e)   Upon its resignation becoming effective, this Clause 20 (The Agent and the
      Finance Parties) shall continue to benefit the retiring Agent or, as the
      case may be, the retiring Spanish Security Agent in respect of any action
      taken or not taken by it under or in connection with the Finance Documents
      while it was the Agent or, as the case may be, the Spanish Security Agent,
      and, subject to paragraph (d) above, it shall have no further obligation
      under any Finance Document other than any previously incurred and
      continuing liabilities not

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                                       73

      transferred to the successor Agent or, as the case may be, the successor
      Spanish Security Agent.

(f)   The Majority Banks may, by notice to the Agent or, as the case may be, the
      Spanish Security Agent, require it to resign in accordance with paragraph
      (a) above. In this event the Agent or, as the case may be, the Spanish
      Security Agent shall resign in accordance with paragraph (a) above but it
      shall not be entitled to appoint one of its Affiliates as successor Agent
      or, as the case may be, the successor Spanish Security Agent.

(g)   (i)   Notwithstanding the foregoing provisions of this Clause 20.16, the
            Spanish Security Agent may not resign, nor may the Majority Banks
            require it to resign, unless the successor Spanish Security Agent is
            for the time being a Bank.

      (ii)  If and for so long as any Bank is also the Spanish Security Agent,
            it shall not be entitled to assign, transfer or novate the whole of
            its Commitment pursuant to Clause 27.2 (Transfers by Banks) unless
            at the same time it resigns as Spanish Security Agent and a
            successor Spanish Security Agent is appointed pursuant to this
            Clause 20.16.

      (iii) In the event any Bank becomes a successor Spanish Security Agent in
            accordance with the terms of this Clause 20.16, each of the Banks
            shall give to such successor Spanish Security Agent power of
            attorney in the form of Schedule 9 (Form of Bank's Power of
            Attorney).

20.17 BANKS

(a)   Each of the Agent and the Spanish Security Agent may treat each Bank as a
      Bank, entitled to payments under this Agreement and as acting through its
      Facility Office(s) until it has received notice from the Bank to the
      contrary by not less than five Business Days prior to the relevant
      payment.

(b)   Unless a Bank notifies the Agent to the contrary, each Bank confirms to
      the Agent, on the date that it becomes a Bank, that it is beneficially
      entitled to its share in each Tranche and its accrued interest and is
      either:

      (i)   not resident for tax purposes in the United Kingdom; or

      (ii)  a bank for the purposes of section 349 of the Income and Corporation
            Taxes Act 1988.

      Each Bank must promptly notify the Agent if there is a change in its
      position from that set out in sub-paragraph (i) or (ii) above.

(c)   Each Bank undertakes to the Agent that it is in a position to and will
      provide to the Borrower on or before the first interest payment date and
      annually thereafter a certificate of its tax residency in a European Union
      Member country.

(d)   The Agent may at any time, and shall if requested to do so by the Majority
      Banks, convene a meeting of the Banks.

20.18 SECURITY DOCUMENTS

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                                       74

(a)   Each of the Agent and the Spanish Security Agent in each case in its
      capacity as trustee or otherwise under the Security Documents:

      (i)   is, other than arising directly from the Agent's or, as the case may
            be, the Spanish Security Agent's wilful misconduct or reckless
            disregard with knowledge of the consequences, not liable for any:

            (A)   failure, omission or defect in perfecting or registering the
                  security constituted or created by any Finance Document;

            (B)   failure to obtain any licence, consent or other authority for
                  the execution of any Security Document, including, without
                  limitation, the consent of any person required under the terms
                  of any Security Document;

      (ii)  may accept without enquiry such title as the Borrower may have to
            any asset secured by any Security Document; and

      (iii) is not under any obligation to hold any Finance Document or any
            other document in connection with the Finance Documents or the
            assets secured by any Finance Document (including title deeds) in
            its own possession or to take any steps to protect or preserve the
            same other than as directed by the Majority Banks.

(b)   Except as otherwise provided in the Finance Documents, all moneys which
      under the trusts contained in the Finance Documents are received by the
      Agent or, as the case may be, the Spanish Security Agent in its capacity
      as trustee or otherwise may be invested in the name of or under the
      control of the Agent or, as the case may be, the Spanish Security Agent
      for and on behalf of the Banks in any investment authorised by English law
      for the investment by trustees of trust money or in any other investments
      which may be selected by the Agent. Additionally, the same may be placed
      on deposit in the name of or under control of the Agent for and on behalf
      of the Banks at such bank or institution (including the Agent) and upon
      such terms as the Agent may think fit.

20.19 EXTRAORDINARY MANAGEMENT TIME AND RESOURCES

      The Borrower shall forthwith on demand pay the Agent and the Spanish
      Security Agent for the cost of utilising its management time or other
      resources in connection with:

      (a)   any amendment, waiver, consent or suspension of rights (or any
            proposal for any of the foregoing) requested by or on behalf of the
            Borrower and relating to a Finance Document, a Related Contract or
            any other document referred to in any Finance Document; or

      (b)   the occurrence of a Default; or

      (c)   the enforcement of, or the preservation of or any attempt to enforce
            or preserve any rights under, any Finance Document.

      Any amount payable to the Agent and/or the Spanish Security Agent under
      this clause will be calculated on the basis of such reasonable daily or
      hourly rates as the Agent or, as the case may be, the Spanish Security
      Agent may notify to the Borrower, and is in addition to any fee paid or
      payable to the Agent or, as the case may be, the Spanish Security Agent
      under Clause 21 (Fees).

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                                       75

20.20 SET-OFF BETWEEN SWAP BANKS

      A Swap Bank may set off any matured obligation owed to it by any other
      Swap Bank pursuant to any swap arrangements entered into between them
      pursuant to this transaction against any matured obligation owed by it to
      that other Swap Bank, regardless of the place of payment or currency of
      either obligation. If the obligations are in different currencies, the
      Swap Bank setting-off may convert either obligation at a market rate of
      exchange in its usual course of business for the purpose of the set off.
      If either obligation is unliquidated or unascertained, the Swap Bank
      setting-off may set off in an amount estimated by it in good faith to be
      the amount of that obligation.

21.   FEES

21.1  ARRANGEMENT FEE

      The Borrower shall pay to the Arranger for its own account an arrangement
      fee in the amount and at the time(s) agreed in the relevant Fee Letter.

21.2  AGENT'S FEE

      The Borrower shall pay to the Agent for its own account an agency fee in
      the amount and at the times agreed in the relevant Fee Letter.

21.3  COMMITMENT FEE

      The Borrower shall pay to the Agent for each Bank a commitment fee
      calculated at the rate of 0.40 per cent. per annum on the undrawn,
      uncancelled amount of that Bank's Commitment during the Commitment Period.
      The commitment fee is payable quarterly in arrear (but in any event the
      last payment shall be made on the Delivery Date) during the Commitment
      Period, for so long as any Commitments remain undrawn and have not been
      cancelled. Accrued commitment fee shall also be payable to the Agent for
      the relevant Bank(s) on the cancelled amount of its Commitment at the time
      the cancellation comes into effect.

21.4  VAT

      Any fee referred to in this Clause 21 (Fees) is exclusive of any value
      added tax or any other tax which might be chargeable in connection with
      that fee. If any value added tax or other tax is so chargeable, it shall
      be paid by the Borrower at the same time as it pays the relevant fee.

22.   EXPENSES

22.1  INITIAL AND SPECIAL COSTS

      The Borrower shall forthwith on demand pay the Agent, the Spanish Security
      Agent, the Banks and the Arranger the amount of all reasonable (or
      otherwise capped) costs and expenses (including legal fees) incurred by
      any of them in connection with:

      (a)   the negotiation, preparation, translation, printing and execution
            of:

            (i)   this Agreement and any other documents (including Stage One
                  Documents and Stage Two Documents but excluding a Novation
                  Certificate) referred to in this Agreement; and

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                                       76

            (ii)  any other Finance Document, Stage One Document or Stage Two
                  Document (other than a Novation Certificate) executed after
                  the date of this Agreement;

      (b)   any amendment, waiver, consent or suspension of rights (or any
            proposal for any of the foregoing) requested by or on behalf of the
            Borrower and relating to a Finance Document, a Stage One Document, a
            Stage Two Document or a document referred to in any Finance
            Document; and

      (c)   any other matter, not of an ordinary administrative nature, arising
            out of or in connection with a Finance Document, a Stage One
            Document, a Stage Two Document or any other document referred to in
            any Finance Document and not solely out of the general business of
            the Agent, the Banks or the Arranger.

22.2  ENFORCEMENT COSTS

      The Borrower shall forthwith on demand pay to each Finance Party the
      amount of all costs and expenses (including legal fees) incurred by it:

      (a)   in connection with the enforcement of, or the preservation of (or
            attempt to enforce or preserve) any rights under, any Finance
            Document, any Stage One Document or any Stage Two Document; or

      (b)   in undertaking any reasonable investigation of any possible Default.

23.   STAMP DUTIES

      The Borrower shall pay and forthwith on demand indemnify each Finance
      Party against any liability it incurs in respect of any stamp,
      registration and similar tax which is or becomes payable in connection
      with the entry into, performance or enforcement of any Finance Document.

24.   INDEMNITIES

24.1  GENERAL INDEMNITY

(a)   The Borrower hereby agrees that it shall promptly pay and discharge, or
      cause to be paid or discharged, upon the same becoming payable (and shall,
      if requested by a Finance Party, produce to that Finance Party evidence of
      the payment and discharge thereof) and indemnify on demand and keep
      indemnified each Finance Party on a full indemnity basis against, whether
      directly or indirectly, a claim against it by, or a liability to, a third
      party including, without limitation, in relation to any taxes (other than
      any taxes levied or assessed on net income, profits or gains) or any other
      Losses which relate to or arise directly or indirectly out of or are in
      any way connected to:

      (i)   the condition, testing, delivery, design, leasing, chartering,
            sub-chartering, construction, manufacture, purchase acquisition,
            bailment, fitting out, sale importation to or exportation from any
            country, registration, ownership, possession, management, control,
            inspection, surveying, engineering, contracting, installation,
            manning, provisioning, the provision of bunkers and lubricating
            oils, dry-docking, use, operation, maintenance, repair, service,
            modification, overhaul, replacement, removal, performance,
            transportation, flag, navigation, certification, classification,
            nature, description, acceptance, insurance, refurbishment,
            conversion, change, alteration, or laying-up of the Vessel or any
            part thereof or otherwise in connection

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                                       77

             with the Vessel including, without prejudice to the generality of
             the foregoing, any Losses arising from any pollution or other
             environmental damage caused by or emanating from the Vessel or
             caused by the Vessel becoming a wreck or an obstruction to
             navigation;

      (ii)   any repossession, return, redelivery, storage, maintenance,
             protection, attempted sale, sale or other disposition of the Vessel
             following the termination of the chartering of the Vessel which, if
             carried out by the Agent or the Banks, is carried out in accordance
             with the terms of the Finance Documents;

      (iii)  the complete or partial removal, decommissioning disposal, making
             Vessel safe, destruction or abandonment or loss of the Vessel
             including any matter which the Vessel contains or has at any time
             contained;

      (iv)   any damage or loss to the Vessel irrespective of how caused;

      (v)    the operation or use of the Vessel or any design, article or
             material of the Vessel or relating thereto giving rise to any
             infringement (or alleged infringement) of any patent or other
             intellectual property rights or any other rights whatsoever;

      (vi)   the occupation, arrest, confiscation, requisition, theft,
             registration, compulsory acquisition, restraint of the Vessel or
             the prevention thereof, seizure, taking in execution, impounding,
             forfeiture or detention of the Vessel, or in securing the release
             of the Vessel (including, without limitation by the provision of or
             by procuring a guarantee, bond, cash deposit or other like
             security);

      (vii)  any Environmental Claim relating to the Vessel or any Finance Party
             arising from the transactions contemplated by the Finance
             Documents, the Stage One Documents or the Stage Two Documents;

      (viii) any premiums, calls, supplementary calls and contributions in
             relation to any of the Obligatory Insurances and any of the
             insurances which the Agent maintains in accordance with Clause
             17.38 (Mortgagee's interest and additional perils insurance)
             (including without limitation any such premiums referred to in
             Clause 7 (Owners to provide) of the Time Charter; or

      (ix)   Losses suffered by a Finance Party whether directly or indirectly
             by way of claims against a Finance Party or any of them, by any
             person who has incurred expenditure in taking response or
             preventative measures against loss or damage or injury, or who has
             suffered or alleged that it has suffered loss, damage or injury in
             connection with anything done or omitted to be done by any person
             in relation to, or in respect of or in connection with, the Vessel,
             including in connection with any Hazardous Material emanating or
             threatening to emanate from the Vessel or from operations being
             carried on by the Vessel and any claims for removal and response
             cost and/or for loss, damage or injury to the environment resulting
             from the release or discharge or threatened release or discharge of
             any Hazardous Material from the Vessel.

(b)   In circumstances where the Borrower makes a payment to a Finance Party or
      to any third party pursuant to paragraph (a) above, the relevant Finance
      Party in respect of which such payment has been made agrees that the
      Borrower may be subrogated to the rights of that relevant Finance Party
      against the relevant third party. In such circumstances the relevant
      Finance Party agrees to co-operate with the Borrower in exercising such
      rights of subrogation, provided that:

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                                       78

      (i)   the relevant Finance Party receives a full indemnity from the
            Borrower in terms satisfactory to such Finance Party as to the costs
            and expenses of such co-operation; and

      (ii)  the relevant Finance Party's name may not be used in any action
            without that Finance Party's prior written consent (which consent
            the relevant Finance Party shall have full discretion to withhold).

24.2  CURRENCY INDEMNITY

(a)   If a Finance Party receives an amount in respect of the Borrower's
      liability under the Finance Documents or if that liability is converted
      into a claim, proof, judgment or order in a currency other than the
      currency (the "CONTRACTUAL CURRENCY") in which the amount is expressed to
      be payable under the relevant Finance Document:

      (i)   the Borrower shall indemnify that Finance Party as an independent
            obligation against any loss or liability arising out of or as a
            result of the conversion;

      (ii)  if the amount received by that Finance Party, when converted into
            the contractual currency at the Agent's Spot Rate of Exchange on the
            relevant date, is less than the amount owed in the contractual
            currency, the Borrower shall forthwith on demand pay to that Finance
            Party an amount in the contractual currency equal to the deficit;
            and

      (iii) the Borrower shall pay to the Finance Party concerned on demand any
            exchange costs and taxes payable in connection with any such
            conversion.

(b)   The Borrower waives any right it may have in any jurisdiction to pay any
      amount under the Finance Documents in a currency other than that in which
      it is expressed to be payable.

24.3  OTHER INDEMNITIES

      The Borrower shall forthwith on demand indemnify each Finance Party
      against any loss or liability which that Finance Party incurs as a
      consequence of:

      (a)   the occurrence of any Default;

      (b)   the operation of Clause 19.19 (Acceleration) or Clause 30 (Pro Rata
            Sharing) (except to the extent such loss or liability is due solely
            to the reckless disregard with knowledge of the probable
            consequences or wilful misconduct of the Agent or any Bank);

      (c)   any payment of principal or an overdue amount being received from
            any source otherwise than on the last day of a relevant Interest
            Period or any interest period determined by the Agent under Clause
            9.3 (Default interest);

      (d)   the default or termination by the Borrower, or any replacement or
            amendment in relation to, any Swap Agreement; or

      (e)   the payment of any additional amount by any Swap Bank under any Swap
            Agreement as a result of such Swap Bank being obliged to deduct tax
            or an amount in respect of tax, or otherwise make any other
            deduction, from any amounts payable or paid by that Swap Bank under
            the relevant Swap Agreement; or

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                                       79

      (f)   (other than by reason of the wilful misconduct or reckless disregard
            with knowledge of the probable consequences of, or default by, a
            Finance Party) a Tranche not being advanced after the Borrower has
            delivered the Request for a Tranche or a prepayment not being
            effected in accordance with a prepayment notice.

      The Borrower's liability in each case includes any loss of margin or other
      loss or expense on account of funds borrowed, contracted for or utilised
      to fund any amount payable under any Finance Document, any amount repaid
      or prepaid or any Tranche.

24.4  EXCLUSIONS FROM INDEMNITIES

      The indemnities contained in this Clause 24 shall not extend to any claim
      or liability of a Finance Party to the extent that such claim or
      liability:

      (a)   arises from an act or omission on the part of that Finance Party
            which constitutes wilful misconduct or recklessness with knowledge
            of the probable consequences on the part of such Finance Party;

      (b)   is caused by any failure on the part of that Finance Party to comply
            with any of its express obligations under any of the Finance
            Documents to which that Finance Party is a party (but excluding any
            such breach or failure that arises as a result of the failure of a
            party to such Finance Document (other than that Finance Party) duly
            and punctually to perform its obligations);

      (c)   represents any loss of the right to receive future income or
            profits;

      (d)   is part of the normal administrative or overhead expenses of that
            Finance Party except to the extent the same arise on or following an
            Event of Default which is continuing; or

      (e)   is one in respect of which that Finance Party is expressly and
            specifically indemnified and has received and is entitled to retain
            such indemnity under any other provision of the Finance Documents.

24.5  PRESERVATION OF INDEMNITIES

(a)   Without prejudice to any right to damages or other claim which any Party
      may, at any time, have against another under this Agreement or under any
      of the Finance Documents it is hereby agreed and declared that the
      indemnities in favour of the Finance Parties by the Borrower contained in
      this Agreement or any of the Finance Documents shall continue in full
      force and effect notwithstanding any sale or other disposition of the
      Vessel, Total Loss or any breach of the terms hereof or thereof by the
      Borrower (including fundamental breach), the lawful repudiation by a
      Finance Party or the Borrower of this Agreement or any of the Finance
      Documents or the expiration of the Time Charter or any other Charter (or
      any renewal of such Time Charter or any other Charter) through effluxion
      of time or otherwise or the termination of the hire or sale of the Vessel
      hereunder or any other circumstances whatsoever.

(b)   If any payment received by a Finance Party in respect of moneys owing or
      due and payable by the Borrower hereunder shall on the subsequent
      liquidation or other insolvency of the Borrower be avoided under any laws
      relating to insolvency or liquidation, such payment shall not be
      considered as discharging or diminishing the liability of the Borrower
      under this

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                                       80

      Agreement and this Agreement shall continue to apply as if such payment
      had at all times remained owing by the Borrower.

25.   EVIDENCE AND CALCULATIONS

25.1  ACCOUNTS

      Accounts maintained by a Finance Party in connection with this Agreement
      are prima facie evidence of the matters to which they relate.

25.2  CERTIFICATES AND DETERMINATIONS

      Any certification or determination by a Finance Party of a rate or amount
      under the Finance Documents is, in the absence of manifest error,
      conclusive evidence of the matters to which it relates.

25.3  CALCULATIONS

      Interest (including any applicable Mandatory Cost) and the fee payable
      under Clause 21.3 (Commitment Fee) accrue from day to day and are
      calculated on the basis of the actual number of days elapsed and a year of
      360 days.

26.   AMENDMENTS AND WAIVERS

26.1  PROCEDURE

(a)   Subject to Clause 26.2 (Exceptions) and to sub-paragraph (b) below, any
      term of the Finance Documents may be amended or waived with the agreement
      of the Borrower, the Majority Banks and (to the extent that the amendment
      or waiver might reasonably be expected to prejudice the Agent) the Agent.
      The Agent may effect, on behalf of the Finance Parties, an amendment or
      waiver to which the Majority Banks have agreed.

(b)   The Agent shall promptly notify the other Parties of any amendment or
      waiver effected under paragraph (a) above, and any such amendment or
      waiver shall be binding on all the Parties.

26.2  EXCEPTIONS

      An amendment or waiver which relates to:

      (a)   the Final Maturity Date;

      (b)   the definition of "MAJORITY BANKS" in Clause 1.1;

      (c)   an extension of the date for, or a decrease in an amount or a change
            in the currency of, any payment under the Finance Documents;

      (d)   any reduction in the Margin (other than in accordance with the terms
            of this Agreement);

      (e)   an increase in a Bank's Commitment;

      (f)   a term of a Finance Document which expressly requires the consent of
            each Bank;
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                                       81

      (g)   Clause 2.2 (Nature of a Finance Party's rights and obligations),
            Clause 30 (Pro Rata Sharing) or this Clause 26 (Amendments and
            Waivers); or

      (h)   any release of any Security Interest in favour of the Finance
            Parties generally unless permitted by this Agreement,

      may not be effected without the consent of the Borrower and each Bank.

26.3  WAIVERS AND REMEDIES CUMULATIVE

      The rights of each Finance Party under the Finance Documents:

      (a)   may be exercised as often as necessary;

      (b)   are cumulative and not exclusive of its rights under the general
            law; and

      (c)   may be waived only in writing and specifically.

      Delay in exercising or non-exercise of any such right is not a waiver of
      that right.

27.   CHANGES TO THE PARTIES

27.1  TRANSFERS BY BORROWER

      The Borrower may not assign, transfer, novate or dispose of any of, or any
      interest in, its rights and/or obligations under the Finance Documents.

27.2  TRANSFERS BY BANKS

(a)   A Bank (the "EXISTING BANK") may, subject to paragraph (b) below at any
      time assign, transfer or novate any of its Commitment, in whole or in
      part, and/or any rights and/or any obligations under this Agreement to
      another bank or financial institution (the "NEW BANK"). The prior consent
      of the Borrower is required for any such assignment, transfer or novation,
      unless:

      (i)   the New Bank is another Bank or an Affiliate of a Bank; or

      (ii)  a Default has occurred, is continuing and has not been waived.

      However, the prior consent of the Borrower must not be unreasonably
      withheld or delayed and will be deemed to have been given if, within 14
      days of receipt by the Borrower of an application for consent, it has not
      been expressly refused.

(b)   A transfer of obligations will be effective only if:

      (i)   the obligations are novated in accordance with Clause 27.3
            (Procedure for novations);

      (ii)  the New Bank confirms to the Agent and the Borrower that it
            undertakes to be bound by the terms of this Agreement as a Bank in
            form and substance satisfactory to the Agent and the Borrower. On
            the transfer becoming effective in this manner the Existing Bank
            shall be relieved of its obligations under this Agreement to the
            extent that they are transferred to the New Bank;



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                                       82

      (iii) the New Bank accedes to the Mortgage, the Swap Bank Mortgage and the
            Pledge of Quota Shares by execution of a deed of assignment of
            interest in the form of Schedule 10 (Form of Deed of Assignment of
            Interest); and

      (iv)  the New Bank grants a power of attorney in favour of the Spanish
            Security Agent in the form of Schedule 9 (Form of Bank's Power of
            Attorney) in all substantial respects.

(c)   Nothing in this Agreement restricts the ability of a Bank to sub-contract
      an obligation if that Bank remains liable under this Agreement for that
      obligation.

(d)   On each occasion an Existing Bank assigns, transfers or novates any of its
      rights and/or obligations under this Agreement, the New Bank shall, on the
      date the assignment, transfer and/or novation takes effect, pay to the
      Agent for its own account a fee of L1,000.

(e)   An Existing Bank is not responsible to a New Bank for:

      (i)   the execution, genuineness, validity, enforceability or sufficiency
            of any Finance Document or any other document;

      (ii)  the collectability of amounts payable under any Finance Document; or

      (iii) the accuracy of any statements (whether written or oral) made in or
            in connection with any Finance Document.

(f)   Each New Bank confirms to the Existing Bank and the other Finance Parties
      that it:

      (i)   has made its own independent investigation and assessment of the
            financial condition and affairs of the Borrower and its related
            entities in connection with its participation in this Agreement and
            has not relied exclusively on any information provided to it by the
            Existing Bank in connection with any Finance Document; and

      (ii)  will continue to make its own independent appraisal of the
            creditworthiness of the Borrower and its related entities while any
            amount is or may be outstanding under the Finance Documents or any
            Commitment is in force.

(g)   Nothing in any Finance Document obliges an Existing Bank to:

      (i)   accept a re-transfer from a New Bank of any of the rights and/or
            obligations assigned, transferred or novated under this clause; or

      (ii)  support any losses incurred by the New Bank by reason of the
            non-performance by the Borrower of its obligations under the Finance
            Documents or otherwise.

(h)   Any reference in this Agreement to a Bank includes a New Bank, but
      excludes a Bank if no amount is or may be owed to or by that Bank under
      this Agreement and its Commitment has been cancelled or reduced to nil.



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                                       83

27.3  PROCEDURE FOR NOVATIONS

(a)   A novation is effected if:

      (i)   the Existing Bank and the New Bank deliver to the Agent a duly
            completed certificate, substantially in the form of Schedule 5 (a
            "NOVATION CERTIFICATE"); and

      (ii)  the Agent executes it;

      (iii) the New Bank, the Existing Bank and the Spanish Security Agent
            execute the Spanish public documents required to formalise the
            Novation Certificate and the Spanish Security Documents, and the New
            Bank issues a notarised power of attorney substantially in the form
            of Schedule 9 (Form of Bank's Power of Attorney); and

      (iv)  in the event that the Mortgage and the Swap Bank Mortgages have
            already been executed and registered at the Special Register of
            Ships in the Canary Islands, the New Bank executes, notarises and
            apostilles a deed of assignment in favour of the Spanish Security
            Agent substantially in the form of Schedule 10 (Form of Deed of
            Assignment of Interest).

(b)   Each Party (other than the Existing Bank and the New Bank) irrevocably
      authorises the Agent to execute any duly completed Novation Certificate on
      its behalf.

(c)   To the extent that they are expressed to be the subject of the novation in
      the Novation Certificate:

      (i)   the Existing Bank and the other Parties (the "EXISTING PARTIES")
            will be released from their obligations to each other (the
            "DISCHARGED OBLIGATIONS");

      (ii)  the New Bank and the existing Parties will assume obligations
            towards each other which differ from the discharged obligations only
            insofar as they are owed to or assumed by the New Bank instead of
            the Existing Bank;

      (iii) the rights of the Existing Bank against the existing Parties and
            vice versa (the "DISCHARGED RIGHTS") will be cancelled; and

      (iv)  the New Bank and the existing Parties will acquire rights against
            each other which differ from the discharged rights only insofar as
            they are exercisable by or against the New Bank instead of the
            Existing Bank,

      all on the date of execution of the Novation Certificate by the Agent or,
      if later, the date specified in the Novation Certificate.

27.4  REFERENCE BANKS

      If a Reference Bank (or, if a Reference Bank is not a Bank, the Bank of
      which it is an Affiliate) ceases to be one of the Banks, the Agent shall
      (in consultation with the Borrower) appoint another Bank or an Affiliate
      of a Bank to replace that Reference Bank.

27.5  REGISTER

      The Agent shall keep a register of all the Parties and shall supply any
      other Party (at that Party's expense) with a copy of the register on
      request.



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                                       84

27.6  FACILITY OFFICE

      Any Bank may from time to time change its Facility Office for the purposes
      of this Agreement. In the event of any such change the relevant Bank shall
      promptly notify the Agent and on receipt by the Agent from the relevant
      Bank of notice of such change, the Agent shall promptly notify the
      Borrower.

27.7  ACCESSION OF SWAP BANKS

      No person providing interest rate or hedging facilities to the Borrower
      will be entitled to share in any of the security constituted by the
      Security Documents in respect of any of the liabilities or debt arising
      under such swap or hedging facilities or benefit from the undertakings or
      the parties to this Agreement unless and until the Agent has agreed in
      writing to the identity of such person (such agreement not to be
      unreasonably withheld where such person is a Senior Creditor (or its
      Affiliate)) and to the swap or hedging facilities being provided by such
      person and such person has agreed to become a Swap Bank by executing and
      delivering to the Agent a duly completed Deed of Accession. Upon delivery
      of such a Deed of Accession to the Agent such person will acquire all its
      rights and assume all its obligations as a Swap Bank under this Agreement
      in relation to such swap or hedging facilities.

27.8  REPLACEMENT SWAP AGREEMENTS

      The Borrower may, at any time, request that the Swap Agreement be
      substituted for a Replacement Swap Agreement. The Agent and the Swap Banks
      may, in their absolute discretion, approve the termination of the Swap
      Agreement and the entry by the Borrower into a Replacement Swap Agreement
      where they are satisfied that:

(a)   the Replacement Swap Agreements are on substantially the same terms as the
      existing Swap Agreements and the Agent has received in writing confirming
      from each of the Swap Banks consenting to the termination of the existing
      Swap Agreements and the entry into Replacement Swap Agreements;

(b)   the termination of the existing Swap Agreements and the entry into the
      Replacement Swap Agreements will not affect the existing security
      arrangements in respect of the Swap Agreements, or, to the extent that
      such security arrangements will be affected, the Agent is satisfied that
      replacement security will be effected on or prior to the termination of
      the existing Swap Agreements, including but not limited to an assignment
      by the Borrower in favour of the Agent of the Replacement Swap Agreement
      and either a deed of amendment of the Swap Mortgage or the execution of a
      new mortgage in connection with the Replacement Swap Agreement;

(c)   the Borrower has paid or undertaken to pay all costs and expenses in
      connection with the termination of the existing Swap Agreement and the
      execution of the Replacement Swap Agreements, including any documents,
      side letters and notices in connection therewith and including but not
      limited to any Break Costs;

(d)   the Agent has received a legal opinion from Allen & Overy, Madrid, Spanish
      legal advisers to the Finance Parties, in all respects satisfactory to the
      Agent; and

(e)   there are no adverse tax, credit or other relevant implications which it
      is possible, in the opinion of the Agent, may arise as a result of the
      Replacement Swap Agreements.



<PAGE>

                                       85

28.   DISCLOSURE OF INFORMATION

(a)   Subject to paragraph (b) below, a Bank may disclose to one of its
      Affiliates or any person with whom it is proposing to enter, or has
      entered into, any kind of transfer, participation or other agreement in
      relation to this Agreement:

      (i)   a copy of any Finance Document; and

      (ii)  any information which that Bank has acquired under or in connection
            with any Finance Document.

(b)   The rights of disclosure set out in paragraph (a) above are subject to:

      (i)   the relevant information only being disclosed for the purposes of
            the relevant transfer, participation or other agreement;

      (ii)  the relevant Bank considering it necessary to disclose the relevant
            information in order for the recipient of the information properly
            to determine (on a fully informed basis) whether or not it wishes to
            participate in the relevant transfer, participation or other
            agreement; and

      (iii) the recipient of the relevant information undertaking to the
            Borrower or to the Agent or relevant Bank (but for the benefit of
            the Borrower) to be bound by an obligation equivalent to this Clause
            28(b).

29.   SET-OFF

      A Finance Party may upon notice to the Borrower, following the occurrence
      of an Event of Default and whilst it continues, set off any matured
      obligation owed by the Borrower under the Finance Documents (to the extent
      beneficially owned by that Finance Party) against any obligation (whether
      or not matured) 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, the Finance Party may convert
      either obligation at the Agent's Spot Rate of Exchange on the relevant
      date for the purpose of the set-off. If either obligation is unliquidated
      or unascertained, the Finance Party may set off in an amount estimated by
      it in good faith to be the amount of that obligation.

30.   PRO RATA SHARING

30.1  REDISTRIBUTION

      If any amount owing by the Borrower under this Agreement to a Finance
      Party (the "RECOVERING FINANCE PARTY") is discharged by payment, set-off
      or any other manner other than through the Agent in accordance with Clause
      10 (Payments) (a "RECOVERY"), then:

      (a)   the recovering Finance Party shall, within three Business Days,
            notify details of the recovery to the Agent;

      (b)   the Agent shall determine whether the recovery is in excess of the
            amount which the recovering Finance Party would have received had
            the recovery been received by the Agent and distributed in
            accordance with Clause 10 (Payments);



<PAGE>

                                       86

      (c)   subject to Clause 30.3 (Exceptions), the recovering Finance Party
            shall, within three Business Days of demand by the Agent, pay to the
            Agent an amount (the "REDISTRIBUTION") equal to the excess;

      (d)   the Agent shall treat the redistribution as if it were a payment by
            the Borrower under Clause 10 (Payments) and shall pay the
            redistribution to the Finance Parties (other than the recovering
            Finance Party) in accordance with Clause 10.7 (Payments); and

      (e)   after payment of the full redistribution, the recovering Finance
            Party will be subrogated to the portion of the claims paid under
            paragraph (d) above, and the Borrower will owe the recovering
            Finance Party a debt which is equal to the redistribution,
            immediately payable and of the type originally discharged.

30.2  REVERSAL OF REDISTRIBUTION

      If under Clause 30.1 (Redistribution):

      (a)   a recovering Finance Party must subsequently return a recovery, or
            an amount measured by reference to a recovery, to the Borrower; and

      (b)   the recovering Finance Party has paid a redistribution in relation
            to that recovery,

      each Finance Party shall, within three Business Days of demand by the
      recovering Finance Party through the Agent, reimburse the recovering
      Finance Party all or the appropriate portion of the redistribution paid to
      that Finance Party together with interest on the amount to be returned to
      the recovering Finance Party for the period whilst it held the
      redistribution. Thereupon the subrogation in Clause 30.1(e)
      (Redistribution) will operate in reverse to the extent of the
      reimbursement.

30.3  EXCEPTIONS

      (a)   A recovering Finance Party need not pay a redistribution to the
            extent that it would not, after the payment, have a valid claim
            against the Borrower in the amount of the redistribution pursuant to
            Clause 30.1(e) (Redistribution).

      (b)   A recovering Finance Party is not obliged to share with any other
            Finance Party any amount which the recovering Finance Party has
            received or recovered as a result of taking legal proceedings, if
            the other Finance Party had an opportunity to participate in those
            legal proceedings but did not do so or did not take separate legal
            proceedings.

31.   SEVERABILITY

      If a provision of any Finance Document is or becomes illegal, invalid or
      unenforceable in any jurisdiction, that shall not affect:

      (a)   the legality, validity or enforceability in that jurisdiction of any
            other provision of the Finance Documents; or

      (b)   the legality, validity or enforceability in other jurisdictions of
            that or any other provision of the Finance Documents.



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                                       87

32.   COUNTERPARTS

      Each Finance Document may be executed in any number of counterparts, and
      this has the same effect as if the signatures on the counterparts were on
      a single copy of the Finance Documents.

33.   NOTICES

33.1  GIVING OF NOTICES

      All notices or other communications under or in connection with the
      Finance Documents shall be given in writing and unless otherwise stated,
      may be by letter or facsimile. Any such notice will be deemed to be given
      as follows:

      (a)   if by letter, when delivered personally or on actual receipt; and

      (b)   if by facsimile, when received in legible form.

      However, a notice given in accordance with the above but received on a
      non-working day or after business hours in the place of receipt will only
      be deemed to be given on the next working day in that place.

33.2  ADDRESSES FOR NOTICES

(a)   The address and facsimile number of each Party (other than the Borrower,
      and Agent) for all notices under or in connection with the Finance
      Documents are:

      (i)   those notified by that Party for this purpose to the Agent on or
            before it becomes a Party; or

      (ii)  any other notified by that Party for this purpose to the Agent by
            not less than five Business Days' notice.

(b)   The address and facsimile number of the Borrower are:

      C/Musgo n degrees 5, 2 degrees Plta.,
      LA FLORIDA, 28023
      Madrid
      Facsimile: 00 34 91 307 7043
      Attention: Andres Luna

      or such other as the Borrower may notify to the other Parties by not less
      than five Business Days' notice.



<PAGE>

                                       88

(c)   The address and facsimile number of the Agent are:

      125 London Wall
      London
      EC2Y 5AJ
      Facsimile: +44 (0) 207 777 2085/2360
      Attention: Loans Agency

      With a copy to:

      JPMorgan Chase Bank, N.A.
      125 London Wall
      London
      EC2Y 5AJ
      Facsimile: +44 (0) 207 777 1554
      Attention: Corporate Banking

      or such other as the Agent may notify to the other Parties by not less
      than five Business Days' notice.

(d)   The address and facsimile number of the Spanish Security Agent are:

      J.P. Morgan Bank S.A.
      Paseo de la Castellana, 51
      28046 Madrid,
      Spain
      Facsimile: +34 91 319 2900
      Attention: Michael Hernan

      or such other as the Spanish Security Agent may notify to the other
      Parties by not less than five Business Day's notice.

(e)   All notices from or to the Borrower or a Bank shall be sent through the
      Agent.

(f)   The Agent shall, promptly upon request from any Party, give to that Party
      the address or facsimile number of any other Party applicable at the time
      for the purposes of this clause.

34.   LANGUAGE

(a)   Any notice given under or in connection with any Finance Document shall be
      in English.

(b)   All other documents provided under or in connection with any Finance
      Document shall be:

      (i)   in English; or

      (ii)  if not in English, accompanied by a certified English translation
            and, in this case, the English translation shall prevail unless the
            document is a statutory or other official document.



<PAGE>

                                       89

35.   JURISDICTION

35.1  SUBMISSION

      For the benefit of each Finance Party, the Borrower agrees that the courts
      of England have jurisdiction to settle any disputes in connection with any
      Finance Document and accordingly submits to the jurisdiction of the
      English courts.

35.2  SERVICE OF PROCESS

      Without prejudice to any other mode of service, the Borrower:

      (a)   irrevocably appoints WFW Legal Services Limited at its offices, for
            the time being at 15 Appold Street, London EC2A 2HB as its agent for
            service of process relating to any proceedings before the English
            courts in connection with any Finance Document;

      (b)   agrees that failure by a process agent to notify the Borrower of the
            process will not invalidate the proceedings concerned;

      (c)   consents to the service of process relating to any such proceedings
            by prepaid posting of a copy of the process to its address for the
            time being applying under Clause 33.2 (Addresses for notices); and

      (d)   agrees that if the appointment of any person mentioned in paragraph
            (a) above ceases to be effective, the Borrower shall immediately
            appoint a further person in England to accept service of process on
            its behalf in England, and failing such appointment within 15 days
            the Agent is entitled to appoint such a person by notice to the
            Borrower.

35.3  FORUM CONVENIENCE AND ENFORCEMENT ABROAD

      The Borrower:

      (a)   waives objection to the English courts on grounds of inconvenient
            forum or otherwise as regards proceedings in connection with a
            Finance Document; and

      (b)   agrees that a judgment or order of an English court in connection
            with a Finance Document is conclusive and binding on it and may be
            enforced against it in the courts of any other jurisdiction.

35.4  NON-EXCLUSIVITY

      Nothing in this Clause 35 limits the right of a Finance Party to bring
      proceedings against the Borrower in connection with any Finance Document:

      (a)   in any other court of competent jurisdiction; or

      (b)   concurrently in more than one jurisdiction.



<PAGE>

                                       90

35.5  WAIVER OF IMMUNITY

      The Borrower irrevocably and unconditionally:

      (a)   agrees that its exercise of its rights and the performance of its
            obligations under the Finance Documents will constitute private and
            commercial acts done and performed for private and commercial
            purposes and, if any Finance Party brings legal proceedings against
            it or its assets in relation to the Finance Documents, no immunity
            from those proceedings shall be claimed by or on behalf of itself or
            for its assets;

      (b)   waives any such right of immunity which it or its assets now has or
            may acquire after the date of this Agreement; and

      (c)   consents generally to the giving of any relief or the issue of any
            process under those proceedings.

35.6  EXECUTIVE PROCEEDINGS AND SET-OFF

(a)   (i)   This Agreement, as well as any amendments hereto, will be formalised
            in a Spanish notarial document ("escritura publica" or "poliza"), so
            that it may have the status of a notarial document of loan for all
            purposes contemplated in Article 517, number 4 and 5 of the new
            Civil Procedural Law (Law 1/2000 of 7th January) ("Ley de
            Enjuiciamiento Civil").

      (ii)  The sum payable by the Borrower shall be the total aggregate sum
            resulting from the balance shown in the account(s) maintained by the
            Agent (or the relevant Bank, as the case may be) in accordance with
            this Agreement. For the purposes of Articles 571 et seq. of the new
            Civil Procedural Law (Law 1/2000 of 7th January) ("Ley de
            Enjuiciamiento Civil"), the parties expressly agree that such
            balance shall be considered as an acknowledgement of debt and may be
            claimed pursuant to the same provisions of such law.

      (iii) For the purpose of the provisions of Art. 571 et seq. of the new
            Civil Procedural Law (Law 1/2000 of 7th January) ("Ley de
            Enjuiciamiento Civil"), it is expressly agreed by the contracting
            parties that the determination of the debt to be claimed through the
            executive proceedings shall be effected by the Agent (or the
            relevant Bank, as the case may be) by means of the appropriate
            certificate evidencing the balance shown in the account or accounts
            of the Borrower. By virtue of the foregoing, to exercise executive
            action it will be sufficient to present an original notarial first
            copy of this Agreement and the notarial document ("acta notarial")
            that incorporates the certificate issued by the Agent (or the
            relevant Bank, as the case may be) evidencing that the determination
            of the amounts due and payable by the Borrower have been calculated
            as agreed in this Agreement and that such amounts coincide with the
            balance shown in the account or accounts of the Borrower.

(b)   The covenants in sub-paragraphs (a)(ii) and (iii) above are also
      applicable with respect to any Bank with regard to its respective
      Commitment. Such Bank may issue the appropriate certification of the
      balance of the account or accounts of the Borrower and the certification
      of the account balance may be legalised by a notary.

(c)   The amount of the balance so established shall be notified to the Borrower
      in an attestable manner at least one (1) day in advance of exercising the
      action.



<PAGE>

                                       91

(d)   The Borrower hereby expressly authorises the Agent (and any Bank, as
      appropriate), to request and obtain, by itself, certificates issued by the
      notary which has formalised this Agreement in order to evidence its
      accordance with the entries of his registry-book and the date of them for
      the purpose of number 5 of Article 517, of the new Civil Procedural Law
      (Law 1/2000 of 7th January) ("Ley de Enjuiciamiento Civil"), the amount of
      such certificate being for the account of the Borrower in the manner
      provided with respect to other expenses.

36.   GOVERNING LAW

      This Agreement is governed by English law.

This Agreement has been entered into on the date stated at the beginning of this
Agreement.



<PAGE>

                                       92

                                   SCHEDULE 1

                              BANKS AND COMMITMENTS

<TABLE>
<CAPTION>
                 BANKS                                                     COMMITMENTS
<S>                                                                     <C>
Commerzbank Aktiengesellschaft, Sucursal en Espana                      euro 24,166,666.70

Calyon                                                                  euro 24,166,666.70

JPMorgan Chase Bank, N. A.                                              euro 24,166,666.70

HSH Nordbank Aktiengesellschaft.                                        euro 24,166,666.70

The Governor and Company of the Bank of Scotland                        euro 24,166,666.70

DVB Bank NV                                                             euro 24,166,666.70

Caixa de Aforros de Vigo Ourense e Pontevedra - Caixanova               euro 10,000,000.00

Caja de Ahorros provincial San Fernando de Sevilla y Jerez              euro  5,000,000.00

Kreditanstalt fur Wiederaufbau                                          euro 20,000,000.00

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

          Total Commitments                                             euro   180,000,000

                                                                        ------------------
</TABLE>



<PAGE>

                                       93

                                   SCHEDULE 2

                                     PART I

                     INITIAL CONDITIONS PRECEDENT DOCUMENTS

1.    BORROWER

(a)   A certified copy* of the constitutional documents of the Borrower.

(b)   A certified copy* of a notarised resolution of the board of directors of
      the Borrower:

      (i)   approving the terms of, and the transactions contemplated by, each
            Finance Document and each Related Contract and resolving that it
            execute each Finance Document and each Related Contract then to be
            executed;

      (ii)  authorising a specified person or persons to execute each Finance
            Document and each Related Contract on its behalf; and

      (iii) empowering individuals of Allen & Overy, Madrid as its attorney to
            effect notarisation of each of the relevant Finance Documents and
            Related Contracts on its behalf; and

      (iv)  authorising a specified person or persons, on its behalf, to sign
            and/or despatch all other documents and notices to be signed and/or
            despatched by it under or in connection with each Finance Document
            and each Related Contract.

(c)   A specimen of the signature of each person authorised by the resolution
      referred to in paragraph (b) above.

(d)   A copy of the reporting form PE-1 assigning a NOF number to this
      Agreement, duly sealed by the Bank of Spain.

(e)   A certified copy* of all other resolutions, consents, licences, exemptions
      and filings, corporate, official or otherwise which the Agent may
      reasonably require in connection with this Agreement or any other Finance
      Document.

2.    GUARANTOR

(a)   A certified copy* of the constitutional documents of the Guarantor.

(b)   A certified copy* of a notarised resolution of the board of directors of
      the Guarantor:

      (i)   approving the terms of, and the transactions contemplated by, the
            Finance Documents and Related Contracts to which it is a party and
            resolving that it execute the Finance Documents and Related
            Contracts to which it is a party;

      (ii)  authorising a specified person or persons to execute the Finance
            Documents and Related Contracts to which it is a party on its
            behalf; and



<PAGE>

                                       94

      (iii) authorising a specified person or persons, on its behalf, to sign
            and/or despatch all other documents and notices to be signed and/or
            despatched by it under or in connection with the Finance Documents
            and Related Contracts to which it is a party.

(c)   A specimen of the signature of each person authorised by the resolution
      referred to in paragraph (b) above.

(d)   A certified copy* of a notarised resolution of the shareholder(s) of the
      Guarantor approving the resolutions referred to in paragraph 3(b) above.

3.    FINANCE DOCUMENTS AND RELATED CONTRACTS

(a)   A duly executed original of this Agreement.

(b)   A Spanish Public Document of the executed original of this Agreement.

(c)   In the event the repayment schedule is not completed at the time this
      Agreement is notarised, evidence satisfactory to the Agent that the
      completed repayment schedule has been separately notarised by means of an
      additional Spanish Public Document.

(d)   A duly executed original of the Sales Contract Assignment.

(e)   A Spanish Public Document of the executed original of the Sales Contract
      Assignment.

(f)   A duly executed original of the Memorandum of Agreement Assignment.

(g)   A Spanish Public Document of the executed original of the Memorandum of
      Agreement Assignment.

(h)   A duly executed original of the Refund Guarantees Assignment.

(i)   A Spanish Public Document of the executed original of Refund Guarantees
      Assignment.

(j)   A duly executed original of the General Assignment.

(k)   Executed original of the General Assignment with its signatures legalised
      by a Spanish Notary Public.

(l)   A duly executed original of the Earnings Account Assignment.

(m)   A Spanish Public Document of the executed original of the Earnings Account
      Assignment.

(n)   A duly executed original of the Vessel Management Assignment.

(o)   Executed original of the Vessel Management Assignment with its signatures
      legalised by a Spanish Notary Public.

(p)   A duly executed original of the Insurances Assignment.

(q)   A Spanish Public Document of the executed original of the Insurances
      Assignment.

(r)   A duly executed original of the Swap Agreement, together with evidence
      satisfactory to the Agent of satisfaction of any conditions precedent
      therein.



<PAGE>

                                       95

(s)   A Spanish Public Document of the executed original Swap Agreement.

(t)   A duly executed original of the Swap Agreement Assignment.

(u)   A Spanish Public Document of the executed Swap Agreement Assignment.

(v)   A Spanish Public Document of the executed Pledge of Quota Shares.

(w)   A duly executed original of the Guarantee.

(x)   Executed original of the Guarantee with its signatures legalised by a
      Spanish Notary Public.

(y)   All share certificates and other documents of title or evidence of
      ownership in relation to the Shares together with all share transfers and
      other documents which may be requested by the Agent.

(z)   A certified copy* of each Related Contract, duly executed (other than
      those agreements which relate to Stage Two Only).

(aa)  A duly executed original of each Fee Letter together with confirmation
      from the Agent of payment by the Borrower of amounts due thereunder.

(bb)  Duly executed originals of all notices of assignment required to be served
      under each Security Document referred to above and the acknowledgements
      thereof, duly executed by each relevant counterparty.

4.    OTHER DOCUMENTS

(a)   A copy of any other authorisation or other document, opinion or assurance
      which the Agent considers to be necessary or desirable in connection with
      the entry into and performance of, and the transactions contemplated by,
      any Finance Document or any Related Contract or for the validity and
      enforceability of any Finance Document or any Related Contract.

(b)   A letter from WFW Legal Services Limited agreeing to its appointment as
      process agent for the Borrower and the Guarantor under the Finance
      Documents.

(c)   Confirmation from JPMorgan Chase Bank N.A. (formerly JPMorgan Chase Bank,
      London branch) to the Agent confirming that the Earnings Account and the
      Disbursement Account have been duly opened and funded.

(d)   A copy of a power of attorney given by the Borrower to the Spanish
      Security Agent for the purposes of notarising this Agreement and the other
      relevant Finance Documents, duly executed, notarised and apostilled.

(e)   A copy of each Power of Attorney given by each Bank in the form of
      Schedule 9 (Form of Bank's Power of Attorney) duly executed, notarised and
      apostilled.

5.    PERMISSIBLE DELAYS INSURANCE

(a)   A certified copy of all current Permissible Delays Insurances policies in
      respect of the Vessel.



<PAGE>

                                       96

(b)   Evidence that the name of the Agent has been endorsed on the Permissible
      Delays Insurances policies as additional insured and loss payee.

(c)   A duly executed and notarised notice of assignment (and acknowledgement of
      the same) of the Permissible Delays Insurances in respect of the Vessel
      duly executed by the Borrower substantially in the form provided for in
      the Insurances Assignment.

(d)   Fax confirmation from each broker, insurer and club concerned with
      Permissible Delays Insurances of the Vessel that:

      (i)   the relevant cover is in effect;

      (ii)  they will accept notice of assignment of the Permissible Delays
            Insurances in favour of the Agent;

      (iii) they will restrict their lien for unpaid premiums under any fleet
            policy to unpaid premiums in respect of that Vessel only;

      (iv)  they will issue a letter of undertaking in the current LIBA form (in
            the case of Lloyds brokers), substantially in the form provided for
            in the Insurances Assignment (in the case of non-Lloyds brokers and
            insurers other than clubs) or in their current standard form (in the
            case of clubs);

      (v)   they will accept endorsement of a loss payable clause on the
            policies in the form provided for in the Insurances Assignment (in
            the case of brokers and insurers other than clubs) or will note the
            interest of the Agent in the entry for the Vessel by way of a loss
            payable clause in their current standard form (in the case of
            clubs); and

      (vi)  they are not aware of any mortgage, charge, assignment or other
            encumbrance affecting the Permissible Delays Insurances with which
            they are concerned (other than any previously disclosed by the
            Borrower to the Agent in writing).

(e)   Confirmation from the Agent of the Banks' satisfaction with a final
      insurance report prepared by The Miller Insurance Group.

6.    LEGAL OPINIONS

(a)   A legal opinion of Allen & Overy, London office, English legal advisers to
      the Agent, addressed to the Finance Parties.

(b)   A legal opinion of Allen & Overy, Madrid office, Spanish legal advisers to
      the Agent, addressed to the Finance Parties.

(c)   Legal opinions (in-house) in relation to execution by the issuers of the
      Refund Guarantees.

*     Each certified copy document must be certified by a director, officer or
      duly authorised attorney of the Borrower as being true and complete as at
      a date no earlier than the date of this Agreement.



<PAGE>

                                       97

                                   SCHEDULE 2

                                     PART II

                    STAGE TWO CONDITIONS PRECEDENT DOCUMENTS

1.    BORROWER

(a)   A certified copy* of the constitutional documents of the Borrower.

(b)   A certified copy* of a notarised resolution of the board of directors of
      the Borrower:

      (i)   approving the terms of, and the transactions contemplated by, each
            Stage Two Document and each Security Document then to be entered
            into and resolving that it execute each Stage Two Document and each
            Security Document then to be executed;

      (ii)  authorising a specified person or persons to execute each Stage Two
            Document and each Security Document then to be entered into on its
            behalf; and

      (iii) empowering individuals of Allen & Overy, Madrid as its attorney to
            effect notarisation of each of the relevant Stage Two Documents and
            each Security Document then to be entered into on its behalf; and

      (iv)  authorising a specified person or persons, on its behalf, to sign
            and/or despatch all other documents and notices to be signed and/or
            despatched by it under or in connection with each Stage Two Document
            and each Security Document then to be entered into.

(c)   A specimen of the signature of each person authorised by the resolution
      referred to in paragraph (b) above.

(d)   A certified copy* of all other resolutions, consents, licences, exemptions
      and filings, corporate, official or otherwise which the Agent may
      reasonably require in connection with any Stage Two Document and each
      Security Document then to be entered into.

2.    GUARANTOR

(a)   A certified copy* of the constitutional documents of the Guarantor.

(b)   A certified copy* of a notarised resolution of the board of directors of
      the Guarantor approving the terms of, and the transactions contemplated
      by, the Stage Two Documents and each Security Document then to be entered
      into and confirming that the Guarantee is continuing and remains in full
      force and effect.

(c)   A specimen of the signature of each person authorised by the resolution
      referred to in paragraph (b) above.

(d)   A certified copy* of a notarised resolution of the shareholder(s) of the
      Guarantor approving the resolutions referred to in paragraph 2(b) above.



<PAGE>

                                       98

3.    STAGE TWO DOCUMENTS AND RELEVANT SECURITY DOCUMENTS

(a)   A certified copy* of the Novation Agreement.

(b)   A certified copy* of the Termination Agreement.

(c)   A certified copy* of the Bareboat Charter.

(d)   A certified copy* of the Master Agreement.

(f)   A certified copy* of any other Stage Two Document entered into by the
      Borrower.

(e)   A duly executed original of the Bareboat Charter Assignment.

(f)   A Spanish Public Document of the executed original of the Bareboat Charter
      Assignment.

(g)   A duly executed original of the Master Agreement Assignment.

(h)   A Spanish Public Document of the executed Master Agreement Assignment.

(i)   A duly executed original of any other Security Document which the Agent
      may require in connection with the implementation of Stage Two and the
      giving by the Agent of its consent to the Borrower entering into the Stage
      Two Documents.

(j)   A Spanish Public Document in respect of each Security Document referred to
      in paragraph (i) above.

(j)   Duly executed originals of all notices of assignment required to be served
      under the Bareboat Charter Assignment, the Master Agreement Assignment,
      and each other Security Document referred to in paragraph (i) and the
      acknowledgements thereof, duly executed by each relevant counterparty.

4.    OTHER DOCUMENTS

(a)   A copy of any other authorisation or other document, opinion or assurance
      which the Agent considers to be necessary or desirable in connection with
      the entry into and performance of, and the transactions contemplated by,
      any Stage Two Document or any other Security Document then to be entered
      into or for the validity and enforceability of any Stage Two Document.

(b)   A copy of a power of attorney given by the Borrower to the Spanish
      Security Agent for the purposes of notarising the Stage Two Documents and
      any Security Document then to be entered into, duly executed, notarised
      and apostilled.

5.    PERMISSIBLE DELAYS INSURANCE

      Such documents, evidence, confirmation and re-confirmation as may be
      required by the Agent in connection with the Permissible Delays Insurances
      in order to ensure that the Agent and the Banks have, following the
      implementation of Stage Two, all of the rights and protections to which
      they are entitled under the terms of this Agreement.


<PAGE>

                                       99

6.    LEGAL OPINIONS

(a)   A legal opinion of Allen & Overy, London office, English legal advisers to
      the Agent, addressed to the Finance Parties.

(b)   A legal opinion of Allen & Overy, Madrid office, Spanish legal advisers to
      the Agent, addressed to the Finance Parties.

*     Each certified copy document must be certified by a director, officer or
      duly authorised attorney of the Borrower as being true and complete as at
      a date no earlier than the date of this Agreement.



<PAGE>

                                       100

                                   SCHEDULE 3

                  DELIVERY DATE CONDITIONS PRECEDENT DOCUMENTS

1.    BORROWER

(a)   A certified copy of the constitutional documents of the Borrower.

(b)   In the event that the Borrower takes title to and delivery of the Vessel,
      a certified copy of a notarised resolution of the board of directors of
      the Borrower (unless such a resolution in relation to the issues below is
      still in force):

      (i)   approving the delivery of the Vessel and the terms of, and the
            transactions contemplated by, the Mortgage and the Swap Bank
            Mortgage and resolving that it execute the Mortgage and the Swap
            Bank Mortgage;

      (ii)  authorising a specified person or persons to execute the Mortgage
            and the Swap Bank Mortgage on its behalf; and

      (iii) authorising a specified person or persons, on its behalf, to sign or
            despatch all other documents and notices to be signed or despatched
            by it under or in connection with the Mortgage and the Swap Bank
            Mortgage.

(c)   In the event that the Borrower does not take title to the Vessel, a
      certified copy of a notarised resolution of the board of directors of the
      Borrower:

      (i)   approving the Borrower taking physical possession of the Vessel
            under the terms of the Bareboat Charter;

      (ii)  authorising a specified person or persons to execute such necessary
            documentation as is required to permit the Borrower to take physical
            possession of the Vessel under the terms of the Bareboat Charter;
            and

      (iii) authorising a specified person or persons, on its behalf, to sign or
            despatch all other documents and notices to be signed or despatched
            as necessary to take physical possession of the Vessel under the
            terms of the Bareboat Charter.

(d)   A specimen of the signature of each person authorised by the resolution
      referred to in paragraphs (b) and (c) above.

(e)   A certified copy of all other resolutions, consents, licences, exemptions
      and filings, corporate, official or otherwise which the Agent may
      reasonably require in connection with the Mortgage and the Swap Bank
      Mortgage.

2.    GUARANTOR

(a)   A certified copy* of the constitutional documents of the Guarantor.

(b)   A certified copy* of a notarised resolution of the board of directors of
      the Guarantor (unless such a resolution in relation to the issues below is
      still in force):


<PAGE>

                                      101

      (i)   approving the terms of, and the transactions contemplated by, the
            Finance Documents and Related Contracts to which it is a party and
            resolving that it execute the Finance Documents and Related
            Contracts to which it is a party;

      (ii)  authorising a specified person or persons to execute the Finance
            Documents and Related Contracts to which it is a party on its
            behalf; and

      (iii) authorising a specified person or persons, on its behalf, to sign
            and/or despatch all other documents and notices to be signed and/or
            despatched by it under or in connection with the Finance Documents
            and Related Contracts to which it is a party.

(c)   A specimen of the signature of each person authorised by the resolution
      referred to in paragraph (b) above.

(d)   A certified copy* of a notarised resolution of the shareholder(s) of the
      Guarantor approving the resolutions referred to in paragraph 3(b) above.

3.    AIE

      In the event that the AIE takes title to and delivery of the Vessel in
      accordance with the Stage Two Documents:

      (a)   A certified copy of the constitutional documents of the AIE.

      (b)   A certified copy of a notarised resolution of the board of directors
            of the AIE.

            (i)   approving the delivery of the Vessel and the terms of, and the
                  transactions contemplated by, the Mortgage and the Swap Bank
                  Mortgage and resolving that it execute the Mortgage and the
                  Swap Bank Mortgage;

            (ii)  authorising a specified person or persons to execute the
                  Mortgage and the Swap Bank Mortgage on its behalf; and

            (iii) authorising a specified person or persons, on its behalf, to
                  sign or despatch all other documents and notices to be signed
                  or despatched by it under or in connection with the Mortgage
                  and the Swap Bank Mortgage.

      (c)   A specimen of the signature of each person authorised by the
            resolution referred to in paragraph (b) above.

      (d)   A certified copy of all other resolutions, consents, licences,
            exemptions and filings, corporate, official or otherwise which the
            Agent may reasonably require in connection with the Mortgage and the
            Swap Bank Mortgage.

4.    DOCUMENTS

(a)   A duly executed and notarised original of the Mortgage.

(b)   A duly executed and notarised original of each Swap Bank Mortgage.

(c)   A duly executed original of the Deed of Maintenance Guarantee Assignment.

<PAGE>
                                       102

(d)   A Spanish Public Document of the executed original of the Deed of the
      Maintenance Guarantee Assignment.

(e)   A copy of any other authorisation or other document, opinion or assurance
      which the Agent considers to be necessary or desirable in connection with
      the entry into and performance of, and the transactions contemplated by,
      the Security Documents or for the validity and enforceability of either of
      those documents.

5.    THE VESSEL

(a)   Evidence that:

      (i)   the title to the Vessel is held by the Borrower or the AIE, as
            appropriate, free of all Security Interests other than Permitted
            Liens;

      (ii)  the Vessel is registered in the name of the Borrower or the AIE, as
            appropriate, as a Canary Islands flag ship at the port of Santa Cruz
            de Tenerife in the Canary Islands;

      (iii) there is no Security Interest whatsoever of any kind upon the Vessel
            or the Obligatory Insurances or Earnings of the Vessel other than
            Permitted Liens;

      (iv)  the Mortgage and each Swap Bank Mortgage in respect of the Vessel
            has been duly recorded in the Special Registry of Ships of the
            Canary Islands in accordance with Spanish law and each constitutes a
            first priority security interest over the Vessel and that all taxes
            and fees payable to the Special Registry of Ships of the Canary
            Islands in respect of the Vessel have been paid in full; and

      (v)   evidence that the Vessel is subject to a safety management system
            which complies with the ISM Code.

(b)   A certified copy* of:

      (i)   a classification certificate in respect of the Vessel showing the
            Vessel to be in class without recommendation, condition or
            qualification;

      (ii)  a valid Interim Safety Management Certificate for the Vessel; and

      (iii) a valid Document of Compliance.

(c)   Confirmation acceptable to the Agent that:

      (i)   the Time Charterer has accepted the Vessel pursuant to the terms of
            the Time Charter; and

      (ii)  the Borrower has accepted the Vessel pursuant to the terms of the
            Shipbuilding Contract or, as the case may be, the Sales Contract and
            the Memorandum of Agreement, or, as the case may be, that the AIE
            has accepted the Vessel pursuant to the terms of the Shipbuilding
            Contract and entered into the Bareboat Charter with the Borrower and
            the Borrower has accepted the Vessel under the Bareboat Charter.

6.    INSURANCE

(a)   A certified copy of all current insurance policies in respect of the
      Vessel.

<PAGE>
                                       103

(b)   A duly executed and notarised notice of assignment (and acknowledgement of
      the same) of the Obligatory Insurances in respect of the Vessel duly
      executed by the Borrower substantially in the form provided for in the
      Insurances Assignment.

(c)   Fax confirmation from each broker, insurer and club concerned with the
      Obligatory Insurances of the Vessel that:

      (i)   the relevant cover is in effect and will remain in effect
            notwithstanding any delay in the registration of the Vessel as a
            Canary Islands flag ship at the port of Santa Cruz de Tenerife in
            the Canary Islands following the Delivery Date;

      (ii)  they will accept notice of assignment of the Obligatory Insurances
            in favour of the Agent;

      (iii) they will restrict their lien for unpaid premiums under any fleet
            policy to unpaid premiums in respect of that Vessel only;

      (iv)  they will issue a letter of undertaking in the current LIBA form (in
            the case of Lloyds brokers), in the form provided for in the
            Insurances Assignment (in the case of non-Lloyds brokers and
            insurers other than clubs) or in their current standard form (in the
            case of clubs);

      (v)   they will accept endorsement of a loss payable clause on the
            policies in the form provided for in the Insurances Assignment (in
            the case of brokers and insurers other than clubs) or will note the
            interest of the Agent in the entry for the Vessel by way of a loss
            payable clause in their current standard form (in the case of
            clubs); and

      (vi)  they are not aware of any mortgage, charge, assignment or other
            encumbrance affecting the Obligatory Insurances with which they are
            concerned (other than any previously disclosed by the Borrower to
            the Agent in writing).

(d)   Confirmation from the Agent of the Banks' satisfaction with a final
      insurance report prepared by The Miller Insurance Group.

7.    LEGAL OPINIONS

(a)   A legal opinion of Allen & Overy, London office, English legal advisers to
      the Agent, addressed to the Finance Parties.

(b)   A legal opinion of Allen & Overy, Madrid office, Spanish legal advisers to
      the Agent, addressed to the Finance Parties.

*     Each certified copy document must be certified by a director, officer or
      duly authorised attorney of the Borrower as being true and complete as at
      a date no earlier than the date of this Agreement.

<PAGE>
                                       104

                                   SCHEDULE 4

                                 FORM OF REQUEST

To:   J. P. Morgan Europe Limited as Agent

From: Naviera Teekay Gas IV S.L.

                                                                    Date:[     ]

                          NAVIERA TEEKAY GAS I.V. S.L.

   EURO 180,000,000 CREDIT AGREEMENT DATED 21ST DECEMBER, 2001 ( AS AMENDED,
                   SUPPLEMENTED OR NOVATED FROM TIME TO TIME)

                                  HULL NO. 105

1.    We wish to borrow a Tranche from the Banks as follows:

      (a)   Drawdown Date: [     ]

      (b)   Amount: [     ]

      (c)   Interest Period: [     ]

      (d)   Payment Instructions: [     ].

2.    We confirm that each condition specified in Clause 4.2 (Further conditions
      precedent) is satisfied on the date of this Request.

By:

NAVIERA TEEKAY GAS IV S.L.

Authorised Signatory

<PAGE>
                                       105

                                   SCHEDULE 5

                          FORM OF NOVATION CERTIFICATE

To:   J. P. Morgan Europe Limited as Agent

From: [THE EXISTING BANK] and [THE NEW BANK]

                                                                   Date: [     ]

                           NAVIERA TEEKAY GAS IV S.L.

    EURO 180,000,000 CREDIT AGREEMENT DATED 21ST DECEMBER, 2001 (AS AMENDED,
                   SUPPLEMENTED OR NOVATED FROM TIME TO TIME)

                                  HULL NO. 105

We refer to Clause 27.3 (Procedure for novations).

1.    We [     ] (the "EXISTING BANK") and [      ] (the "NEW BANK") agree to
      the Existing Bank and the New Bank novating all the Existing Bank's rights
      and obligations referred to in the Schedule in accordance with Clause 27.3
      (Procedure for novations).

2.    The specified date for the purposes of Clause 27.3(c) is [date of
      novation].

3.    The Facility Office and address for notices of the New Bank for the
      purposes of Clause 33.2 (Addresses for notices) are set out in the
      Schedule.

4.    This Novation Certificate is governed by English law.

                                  THE SCHEDULE

                      RIGHTS AND OBLIGATIONS TO BE NOVATED

[Details of the rights and obligations of the Existing Bank to be novated].

[NEW BANK]

[Facility Office                    Address for notices]

[Existing Bank]               [New Bank]          J. P. Morgan Europe Limited

By:                           By:                 By:

Date:                         Date:               Date:

<PAGE>
                                       106

                                   SCHEDULE 6

                        CALCULATION OF THE MANDATORY COST

(a)   For the purpose of paragraph (a) of the definition of Mandatory Cost, the
      Mandatory Cost for a Tranche for its Interest Period is the rate
      determined by the Agent to be equal to the arithmetic mean (rounded
      upward, if necessary, to four decimal places) of the respective rates
      notified by each of the Reference Banks to the Agent and calculated in
      accordance with the following formula:

      F x 0.01
      -------- % per annum
        300

      where on the day of application of the formula F is the charge payable by
      the relevant Bank to the Financial Services Authority ("FSA") under the
      Fees Rules (but for this purpose, ignoring any minimum fee under the Fees
      Rules) and expressed in pounds per (pound)1 million of the tariff base of
      the Reference Bank.

(b)   For the purposes of this Schedule 6:

      (i)   "TARIFF BASE" has the meaning given to it in the Fees Rules;

      (ii)  "FEES RULES" means the then current rules on periodic fees in the
            Supervision manual in the FSA Handbook.

(c)   If a Reference Bank does not supply a rate to the Agent, the applicable
      Mandatory Cost will be determined on the basis of the rate(s) supplied by
      the remaining Reference Banks.

(d)   (i)   The formula is applied on the first day of the Interest Period of
            the Tranche.

      (ii)  Each rate calculated in accordance with the formula is, if
            necessary, rounded upward to four decimal places.

(e)   If the Agent determines that a change in circumstances has rendered, or
      will render, the formula inappropriate, the Agent (after consultation with
      the Banks) shall notify the Company 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 all the Parties.

<PAGE>
                                       107

                                   SCHEDULE 7

                               REPAYMENT SCHEDULE

<TABLE>
<CAPTION>
REPAYMENT DUE DATE       PRINCIPAL PAYMENT     LOAN OUTSTANDINGS
------------------       -----------------     -----------------
<S>                      <C>                   <C>
    31/01/2005            -177,600,921.74       177,600,921.74
    28/02/2005                 269,888.70       177,331,033.04
    31/03/2005                 271,423.12       177,059,609.92
    28/04/2005                 272,966.28       176,786,643.64
    31/05/2005                 274,518.21       176,512,125.43
    30/06/2005                 276,078.96       176,236,046.48
    29/07/2005                 277,648.58       175,958,397.90
    31/08/2005                 279,227.13       175,679,170.77
    30/09/2005                 280,814.65       175,398,356.12
    31/10/2005                 282,411.20       175,115,944.92
    30/11/2005                 284,016.82       174,831,928.10
    30/12/2005                 285,631.58       174,546,296.52
    31/01/2006                 287,255.51       174,259,041.01
    28/02/2006                 288,888.68       173,970,152.33
    31/03/2006                 290,531.13       173,679,621.20
    28/04/2006                 292,182.92       173,387,438.28
    31/05/2006                 293,844.10       173,093,594.17
    30/06/2006                 295,514.73       172,798,079.44
    31/07/2006                 297,194.85       172,500,884.59
    30/08/2006                 298,884.53       172,202,000.06
    29/09/2006                 300,583.81       171,901,416.24
    31/10/2006                 302,292.76       171,599,123.48
    30/11/2006                 304,011.42       171,295,112.06
    29/12/2006                 305,739.85       170,989,372.21
    31/01/2007                 307,478.11       170,681,894.10
    28/02/2007                 309,226.25       170,372,667.85
    30/03/2007                 310,984.33       170,061,683.52
    30/04/2007                 312,752.41       169,748,931.12
    31/05/2007                 314,530.53       169,434,400.59
    29/06/2007                 316,318.77       169,118,081.82
    31/07/2007                 318,117.17       168,799,964.64
    31/08/2007                 319,925.80       168,480,038.84
    28/09/2007                 321,744.71       168,158,294.12
    31/10/2007                 323,573.97       167,834,720.16
    30/11/2007                 325,413.62       167,509,306.53
    31/12/2007                 327,263.73       167,182,042.80
    31/01/2008                 329,124.36       166,852,918.44
    29/02/2008                 330,995.57       166,521,922.87
    31/03/2008                 332,877.42       166,189,045.45
    30/04/2008                 334,769.97       165,854,275.48
    30/05/2008                 336,673.27       165,517,602.21
    30/06/2008                 338,587.40       165,179,014.81
    31/07/2008                 340,512.41       164,838,502.39
</TABLE>

<PAGE>
                                       108
<TABLE>
<S>                            <C>              <C>
    29/08/2008                 342,448.37       164,496,054.03
    30/09/2008                 344,395.33       164,151,658.70
    31/10/2008                 346,353.36       163,805,305.34
    28/11/2008                 348,322.52       163,456,982.82
    31/12/2008                 350,302.88       163,106,679.94
    30/01/2009                 352,294.50       162,754,385.44
    27/02/2009                 354,297.44       162,400,088.00
    31/03/2009                 356,311.77       162,043,776.23
    28/04/2009                 358,337.55       161,685,438.68
    29/05/2009                 360,374.85       161,325,063.83
    30/06/2009                 362,423.73       160,962,640.10
    31/07/2009                 364,484.26       160,598,155.84
    28/08/2009                 366,556.50       160,231,599.34
    30/09/2009                 368,640.53       159,862,958.81
    30/10/2009                 370,736.41       159,492,222.41
    30/11/2009                 372,844.20       159,119,378.21
    31/12/2009                 374,963.97       158,744,414.24
    29/01/2010                 377,095.80       158,367,318.44
    26/02/2010                 379,239.74       157,988,078.70
    31/03/2010                 381,395.88       157,606,682.82
    28/04/2010                 383,564.27       157,223,118.54
    28/05/2010                 385,745.00       156,837,373.55
    30/06/2010                 387,938.12       156,449,435.43
    30/07/2010                 390,143.71       156,059,291.72
    31/08/2010                 392,361.84       155,666,929.88
    30/09/2010                 394,592.58       155,272,337.31
    29/10/2010                 396,836.00       154,875,501.31
    30/11/2010                 399,092.18       154,476,409.13
    31/12/2010                 401,361.18       154,075,047.94
    31/01/2011                 403,643.09       153,671,404.85
    28/02/2011                 405,937.97       153,265,466.88
    31/03/2011                 408,245.90       152,857,220.99
    28/04/2011                 410,566.94       152,446,654.04
    31/05/2011                 412,901.19       152,033,752.86
    30/06/2011                 415,248.70       151,618,504.15
    29/07/2011                 417,609.57       151,200,894.59
    31/08/2011                 419,983.85       150,780,910.74
    30/09/2011                 422,371.63       150,358,539.10
    31/10/2011                 424,772.99       149,933,766.11
    30/11/2011                 427,188.00       149,506,578.11
    30/12/2011                 429,616.74       149,076,961.37
    31/01/2012                 432,059.29       148,644,902.07
</TABLE>

<PAGE>
                                       109

                                   SCHEDULE 8

                         FORM OF COMPLIANCE CERTIFICATE

To:   J. P. Morgan Europe Limited (as Agent)

From: Naviera Teekay Gas IV S.L.

   NAVIERA TEEKAY GAS IV S.L. - EURO 180,000,000 CREDIT AGREEMENT DATED 21ST
     DECEMBER, 2001 (AS AMENDED, SUPPLEMENTED OR NOVATED FROM TIME TO TIME)

                      (THE "CREDIT AGREEMENT") HULL NO. 105

1.    Terms defined in the Credit Agreement have the same meaning in this
      Certificate.

2.    I/We hereby certify that [no Default has occurred and is continuing or is
      outstanding] [a Default under Clause [ ] is outstanding and the following
      steps are being taken to remedy it [ ](1)](1).

3.    The information in this certificate is based on information which has been
      properly extracted from the audited consolidated accounts of the Parent
      for the year ended [ ], is clerically accurate and has been calculated in
      accordance with the Credit Agreement.

Yours faithfully,

[......................](1)

Chief Executive Officer

[or]

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

[Senior Officer]

<PAGE>
                                       110

and

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

[Senior Officer]

<PAGE>
                                       111

                                   SCHEDULE 9

                        FORM OF BANK'S POWER OF ATTORNEY

                                POWER OF ATTORNEY

On this ... day of .........., 2001.

Before me, ..................., Notary Public of ............., [Country].

Appears Mr. ............, of legal age, [profession], with address at .........,
with passport no. ............., issued in ..........., on ............... and I
have identified him.

Mr. .............................. acts on behalf of [NAME OF THE BANK]
corporate address at [..............] and with company registration number
[..................]. [NAME OF THE BANK] is a company validly incorporated and
duly existing under the Laws of [.............].

I have checked the personal identity of the appearer and the appearer has, in my
opinion, the legal authority necessary to validly execute this document on
behalf of [NAME OF THE BANK] [pursuant to a power of attorney granted to him in
a deed executed before a Notary Public of................, Mr.................
the ............ with number ........ of his notarial file] or [in conformity
with a resolution of its board of directors of.............dated ..........] or
[as director of the company duly appointed on ................].

By these presents [NAME OF BANK] GRANTS FULL POWERS OF ATTORNEY to:

1.    [Mr. Eduardo SEBASTIAN DE ERICE y MALO DE MOLINA, lawyer, married, born on
      19th June 1967, of Spanish nationality, domiciled at Pedro de Valdivia 10,
      Madrid, holder of Spanish Identity Card number 51388757, to Ms. Marta
      BERTRAN LOPEZ-IBOR, lawyer, married, born on 21st October 1974, of Spanish
      nationality, domiciled at Antonio Maura 7, Madrid, holder of Spanish
      Identity Card number 2907552, to Mr. Jesus Daniel CARNERO PRIETO, lawyer,
      single, born on 23rd August, 1974, of Spanish nationality, domiciled at
      Pedro de ValdivIa 10, Madrid, holder of Spanish Identity Card number
      44900981 to Ms. Beartriz SAINZ STUYCK, lawyer, single, born on 20th April,
      1977 of Spanish nationality, domiciled at Perdo de Valdivia 10, Madrid,
      holder of Spanish Identity Card number 2541666-M and to Mr. Mariano LOPEZ
      PENAS, lawyer, single, born on 13th July, 1976, of Spanish nationality,
      domiciled at Pedro de Validivia 10, Madrid, holder of Spanish Identity
      Card number 23261045H] or [ANY AUTHORISED SIGNATORY OF THE BANK WHICH THE
      BANK WISHES TO EXECUTE THE DOCUMENTATION] (each, an "ATTORNEY"), so that
      any of them, severally, may exercise, in the name and stead of [NAME OF
      THE BANK], the following faculties:

      (a)   to appear before a Notary Public and sign and/or intervene as
            "poliza" the Facility Agreement entered into between Naviera Teekay
            Gas IV S.L. as Borrower (the "BORROWER"), J. P. Morgan Europe
            Limited as Agent (the "AGENT"), JPMorgan Chase Bank, N.A. as a Swap
            Bank, J. P. Morgan plc as arranger, J.P. Morgan Bank S.A. (in this
            capacity, the "SPANISH SECURITY AGENT") and the several banks and
            financial institutions referred to therein as the banks (the
            "BANKS") and the several banks and financial institutions referred
            to as Swap Banks (as supplemented and amended from time to time, the
            "FACILITY AGREEMENT");

<PAGE>
                                       112

      b)    to ratify, if necessary or convenient any such "poliza" executed by
            an orally appointed representative in the name or on behalf of [NAME
            OF THE BANK];

      (c)   to execute (under hand or personal seal) and/or do any and all
            deeds, documents, acts and things, including the signing of
            approvals or forms required before the Spanish Tax Authorities,
            and/or the execution of any further notarial deed of amendment
            ("escritura publica de rectificacion o subsanacion") that may be
            required for the purpose of sub-paragraphs (a) or (b) above; and

      (d)   to execute (under hand or personal seal) and/or do any and all
            deeds, documents, acts and things which the Attorney may consider
            necessary or expedient for the purpose or in connection with
            sub-paragraphs (a), (b), or (c) above;

2.    J.P. Morgan Bank S.A. with registered address at Gran Via, 17 Bilbao,
      Spain and registered at the Mercantile Registry of Vizcaya at Volume 869,
      Book 163 and Sheet B1-13139 and with Tax Identity Number A-48726350 acting
      as joint and several creditor and in its capacity as Spanish Security
      Agent as its attorney (an "ATTORNEY"), so that it may exercise, in the
      name and stead of [NAME OF THE BANK], the following faculties:

      (a)   to execute, accept, administer and/or enforce any pledge over the
            shares in the Borrower and any vessel mortgage created for the
            benefit of [NAME OF THE BANK] in its capacity as a Bank;

      (b)   to ratify, if necessary or convenient any such "poliza" executed by
            an orally appointed representative in the name or on behalf of [NAME
            OF THE BANK]; and

      (c)   to execute (under hand or personal seal), administer and enforce
            and/or do any and all deeds, documents, acts and things which it may
            consider necessary or expedient for the purpose or in connection
            with sub-paragraphs (a) and (b) above; and

3.    J.P. Morgan Europe Limited with registered address at 125 London Wall,
      London, EC2Y 5AJ and with company registration number 938937 in its
      capacity as Agent for the Finance Parties (as defined in the Senior
      Facility Agreement) as its attorney (an "ATTORNEY"), so that it may
      exercise, in the name and stead of [NAME OF THE BANK], the following
      faculties:

      (a)   to execute, accept, administer and enforce any of the guarantees or
            assignments granted by third parties of the Borrower in favour of
            the Agent and for the benefit, among others, of [NAME OF THE BANK]
            in its capacity as a Bank;

      (b)   to ratify, if necessary or convenient any such "poliza" executed by
            an orally appointed representative in the name or on behalf of [NAME
            OF THE BANK]; and

      (c)   to execute (under hand or personal seal), administer and enforce
            and/or do any and all deeds, documents, acts and things which it may
            consider necessary or expedient for the purpose or in connection
            with sub-paragraphs (a) and (b) above.

I certify and attest that all the formalities requested by the laws of ........
for the validity of this instrument have been duly complied with and that under
the laws of ......... this Power of Attorney is not required to be registered in
any public registry.

In witness whereof the undersigned has caused these powers of attorney to be
executed as a deed in ............, this ....... day of ............... 2001.

<PAGE>
                                       113

Executed as a deed by

[NAME OF THE BANK]

Acting by Mr.............                         Signature of the Notary Public

(Signature of the Notary public legalised in accordance with the apostille
procedure provided for under The Hague Convention of 5th October, 1961).

<PAGE>
                                       114

                                   SCHEDULE 10

                     FORM OF DEED OF ASSIGNMENT OF INTEREST

In Madrid, my residence, on the ___________________, 2001

Before me, ..........................., Notary Public of MadriD and of its Bar.

                                     APPEAR

OF ONE PART, Mr. .................., [details of the appearer to be filled in by
the Spanish notary public]

ON THE SECOND PART, Mr. ........................, [details of the appearer to be
filled in by the Spanish notary public]

AND Mr. ..........................., [details of the appearer to be filled in by
the Spanish notary public]

                                     WHO ACT

Mr. ............................., on behalf of [EXISTING BANK], [details of the
Existing Bank and of the appearer's notarised and apostilled powers of attorney
to be filled in by the Spanish notary public].

Mr. ............................. acts on behalf of [NEW BANK], [details of the
New Bank and of the appearer's notarised and apostilled powers of attorney to be
filled in by the Spanish notary public].

Mr. ............................. acts on behalf of J.P. Morgan Bank S.A.
(formerly The Chase Manhattan Bank CMB, S.A.) a as Spanish Security Agent,
[details of the Agent and of the appearer's notarised and apostilled powers of
attorney to be filled in by the Spanish notary public].

                                     WHEREAS

I.    [EXISTING BANK] is party to a euro 180,000,000 Facility Agreement dated
      ..........., 2001 (the "FACILITY AGREEMENT") between, inter alia, the
      Spanish company Naviera Teekay Gas IV S.L. (formerly Naviera F. Tapias Gas
      IV S.A.) as Borrower (the "BORROWER"), the Existing Bank, J.P. Morgan Bank
      S.A. (formerly The Chase Manhattan Bank CMB, S.A.) as Spanish Security
      Agent and J.P. Morgan Europe Limited (formerly Chase Manhattan
      International Limited) as Agent and the other parties named therein.

II.   The Facility Agreement is secured, inter alia, with the following Spanish
      law security documents (hereinafter together the "SPANISH SECURITY
      DOCUMENTS"):

      (i)   Mortgage over a 138,000 cmb LNG carrying vessel with Hull Number 105
            dated ................ (the "MORTGAGE") relating to the Facility
            Agreement granted by the Borrower under a notarial deed authorised
            by the Notary Public of [Madrid] Mr. ..................... under
            number ...... of his notarial file, and recorded in the [Mercantile
            Registry of the Canary Islands] under Book ....., Folio ....., on
            the ...............

<PAGE>
                                       115

      (ii)  Pledge over the shares in the Borrower, dated ........... (the
            "PLEDGE") relating to the Facility Agreement granted by [insert
            details of current shareholder/pledgors] in a notarial deed
            authorised by the Notary Public of [Madrid] Mr. ..................
            under number ..... of his notarial file.

III.  Under a Novation Agreement dated .......... (the "NOVATION AGREEMENT")
      between [EXISTING BANK] and [NEW BANK] and the Agent, the [EXISTING BANK]
      has assigned to [NEW BANK] [part/all] its rights, obligations and
      commitments under the Facility Agreement with effect as of
      [...............], including, but not limited, all its rights under the
      Spanish Security Documents.

IV.   [EXISTING BANK] and [NEW BANK] have agreed to formalise the Novation
      Agreement for purposes of Spanish law, and in particular, to validly
      assign its rights under the Mortgage and to permit the registration of the
      assignment of the Mortgage in the [Mercantile Registry of the Canary
      Islands].

                                     CLAUSES

FIRST: The [EXISTING BANK] and [NEW BANK], with the assistance of the Spanish
Security Agent, hereby formalise the Novation Agreement in this notarial deed
delivering to me, the Notary, an original executed copy of the Novation
Certificate, which the parties ratify in its entirety, together with its
certified translation into Spanish, and are hereby incorporated unto this
notarial deed.

The New Bank hereby declares that he knows the terms and conditions of the
Facility Agreement and of the Spanish Security Documents, which it ratifies in
its entirety.

SECOND: For the purposes of Spanish law, the Existing Bank has assigned
[part/all] of its commitments, rights and obligations under the Facility
Agreement as follows:

[details of the portion assigned]

THIRD: The assignment described in the foregoing clauses implies the assignment
of all documents granted as security thereof, including the Spanish Security
Agreements. For such purposes, the portion that the Existing Bank and the New
Bank will have under the Spanish Security Documents will be as follows:

[details of the portion of the Existing Bank and of the portion of the New Bank]

Specifically, for the purposes of clause ...... of the Mortgage, the parties
hereby establish that the share of each the Existing Bank and the New Bank is
fixed as follows:

[details of the portion of the Existing Bank and of the portion of the New Bank
for the purposes of the Mortgage]

FOURTH: [NEW BANK] hereby requests the registration of the Novation Agreement
and of the assignment under the Mortgage in the [Mercantile Registry of the
Canary Islands], and hereby appoints Mr. [..............] and/or Mr.
[..............], so that any of them may file this notarial deed with the
relevant public registry in order to register the assignment of the Mortgage
with the registry, and if applicable to give notice to the Borrower so that the
Novation Agreement and the assignment of the Pledge is duly recorded in the
Registry Book of Share of the Borrower.

For the above purposes, if in the examination of this notarial deed, the
Registrar considers that any clause, provision, paragraph, sub-paragraph line or
mention of this deed is not recordable, the parties

<PAGE>
                                       116

hereby expressly accept his opinion and hereby renounce to the registration of
such clause, provision, paragraph, sub-paragraph line or mention, and
specifically requests the partial registration of this deed, so that the
assignment of the Mortgage is duly recorded.

The parties agree, through their attorneys, to execute any and all deeds,
documents, acts and things that they may consider necessary or expedient to duly
register the assignment of the Mortgage to [NEW BANK].

FIFTH: All the costs and expenses derived from the execution of this deed will
be borne by [NEW BANK].

SIXTH: This notarial deed of assignment is governed by Spanish law. [EXISTING
BANK] and [NEW BANK] submit for any litigation which may derive from this deed
to the non-exclusive jurisdiction and competence of the Courts of the city
[Madrid].

So it is said and accepted by the appearers in their capacity as they act, whom
I orally admonish about the legal implications.

After reading this notarial deed, the appearers agree to it, approve it, ratify
it and sign with me, the Notary.

<PAGE>
                                       117

                                   SCHEDULE 11

                     FORM OF DEED OF ACCESSION OF SWAP BANK

THIS DEED dated [   ], [ ] is supplemental to a credit agreement (the "CREDIT
AGREEMENT") dated [   ], [ ] between, inter alia, Naviera Teekay Gas IV S.L. as
the Borrower, the Banks, J.P. Morgan Europe Limited (formerly Chase Manhattan
International Limited) as Agent and J.P. Morgan Bank S.A. (formerly The Chase
Manhattan Bank CMB, S.A.) as Spanish Security Agent.

Words and expressions defined in the Credit Agreement have the same meaning when
used in this Deed.

[Name of new Swap Bank] hereby agrees with each other person who is or who
becomes a party to the Credit Agreement that with effect on and from the date
hereof it will be bound by the Credit Agreement as a Swap Bank as if it had been
party originally to the Credit Agreement in that capacity and that it shall
perform all of the undertakings and agreements set out in the Credit Agreement
and given by a Swap Bank.

The details of Swap Debt covered by this Deed is as follows [    ].

The address for notices of the Swap Bank for the purposes of Clause 33 (Notices)
of the Credit Agreement is:

125 London Wall
London
EC2Y 5AJ

This document takes effect as a deed notwithstanding that the Agent only
executes it under hand.

This Deed is governed by English law.

[Insert appropriate execution language]

Acknowledged.

[Agent]

By:

<PAGE>
                                       118

                                   SIGNATORIES

BORROWER

NAVIERA TEEKAY GAS IV S.L.

By:

BANKS

COMMERZBANK AKTIENGESELLSCHAFT, SUCURSAL EN ESPANA

By:

CALYON

By:

JPMORGAN CHASE BANK, N.A.

By:

HSH NORDBANK AKTIENGESELLSCHAFT

By:

THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND

By:

DVB BANK N.V.

By:

CAIXA DE AFORROS DE VIGO OURENSE E PONTEVENDRA - CAIXANOVA

By:

<PAGE>
                                       119

CAJA DE AHORROS PROVINCIAL SAN FERNANDO DE SEVILLA Y JEREZ

By:

KREDITANSTALT FUR WIEDERAUFBAU

By:

SWAP BANKS

JPMORGAN CHASE BANK, N.A.

By:

COMMERZBANK AKTIENGESELLSCHAFT

By:

CALYON

By:

AGENT

J.P. MORGAN EUROPE LIMITED

By:

SPANISH SECURITY AGENT

J.P. MORGAN BANK S.A.

By:

<PAGE>
                                       120

ARRANGER

J. P. MORGAN plc

By:

<PAGE>

                                     121

NUMBER [___]

                                   APPENDIX A

                                     PART I

                      NOTARIAL DEED OF MORTGAGE OVER VESSEL

In Madrid, my residence, on the ______________________, 200[   ]

Before me, ____________________________, Notary Public of Madrid and of its Bar.

                                     APPEAR

OF ONE PART,

Mr_________, of legal age, [single/married], [profession], nationality with
domicile in _______________, holder of [Spanish identity card/passport] number
________

ON THE SECOND PART,

Mr__________, of legal age, [single/married], [profession], nationality, with
domicile in _______________, holder of [Spanish identity card/passport] number
________

                                     WHO ACT

The first one, on behalf of NAVIERA TEEKAY GAS IV S.L., (hereinafter the
"MORTGAGOR"), with registered address at C/Musgo n degrees 5, 2 degrees
Plta., LA FLORIDA 28023, Madrid, and registered in the Mercantile Registry of
Madrid at Volume 16.879, Book 0, Sheet M-288591 and with Tax Identity Number
C.I.F. A-83090605 [in conformity with a resolution of its Board of Directors of
_________________ ] or [as director of the company duly appointed on
______________] or [pursuant to the powers of attorney granted to him in a deed
executed before the Notary Public of ______________, Mr._____________________].

And the second one, on behalf of each of:

1.    J P MORGAN BANK S.A. with registered address at Gran Via, 17, Bilbao,
      Spain and registered in the Mercantile Registry of Vizcaya at Book 163 and
      Sheet B1-13139 and with Tax Identity Number C.I.F. [     ] in its capacity
      as Spanish Security Agent (hereinafter the "SPANISH SECURITY AGENT"),
      pursuant to a power of attorney granted to him in a deed executed before
      the Notary Public of ______________, Mr._____________________];

2.    COMMERZBANK AKTIENGESELLSCHAFT, with company registration
      number_______________________________________COMMERZBANK
      AKTIENGESELLSCHAFT is a company validly incorporated and duly existing
      under the laws of [___________], pursuant to a

<PAGE>

                                      122

      power of attorney granted to him in a deed executed before the Notary
      Public of ______________, Mr._____________________];

3.    CALYON, with company registration number SIREN 304 187 701 at the Registre
      du Commerce et des Societes of Nanterre [ ] is a company validly
      incorporated and duly existing under the laws of France, pursuant to a
      power of attorney granted to him in a deed executed before the Notary
      Public of ______________, Mr._____________________];

4.    JPMORGAN CHASE BANK, N.A., with company registration number [     ] and
      registered office at [    ] is a company validly incorporated and duly
      existing under the laws of England and Wales, pursuant to a power of
      attorney granted to him in a deed executed before the Notary Public of
      ______________, Mr._____________________];

5.    HSH NORDBANK AKTIENGESELLSCHAFT, with company registration
      number________________________________________HSH NORDBANK
      AKTIENGESELLSCHAFT is a company validly incorporated and duly existing
      under the laws of [____________], pursuant to a power of attorney granted
      to him in a deed executed before the Notary Public of ______________,
      Mr._____________________];

6.    THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND, a company incorporated
      by an Act of Scots Parliament and duly existing under the laws of Scotland
      , pursuant to a power of attorney granted to him in a deed executed before
      the Notary Public of ______________, Mr._____________________];

(together hereinafter the "BANKS").

The appearers have, in my opinion, as they act full legal authority to execute
this notarial deed of vessel mortgage.

                                     WHEREAS

I.    The Banks and the Mortgagor are, inter alia, party to a syndicated credit
      facility agreement dated [INSERT DATE] (the "FACILITY AGREEMENT")
      evidenced in a notarial deed dated [INSERT DATE] granted before [INSERT
      DETAILS] number of this notarial file, under which the Mortgagor has
      received a Loan of up to euro180,000,000 from the Banks (hereinafter, the
      "LOAN").

      The commitment and percentage (%) of participations of the Banks under the
      Facility Agreement are as follows:

<TABLE>
<CAPTION>
NAME OF THE BANK            COMMITMENTS   %
----------------            -----------   -
<S>                         <C>          <C>
Commerzbank
Aktiengesellschaft,
Sucursal en Espana

Calyon

JPMorgan Chase Bank, N.A.
</TABLE>

<PAGE>
                                      123

<TABLE>
<S>                         <C>          <C>
HSH Nordbank
Aktiengesellschaft

The Governor and Company
of Bank of Scotland
</TABLE>

      Each interest period is determined in accordance with the Facility
      Agreement (an "INTEREST PERIOD").

      The rate of interest on the Loan for each Interest Period (the "INTEREST
      RATE") shall be the rate per annum determined by J.P. Morgan Europe
      Limited as agent under the Facility Agreement (the "AGENT") to be the
      aggregate of the applicable:

      (a) Margin of 1.20% per annum;

      (b) EURIBOR; and

      (c) the Mandatory Cost (as defined in the Facility Agreement).

      "EURIBOR"

      means for an Interest Period

      (a)   the applicable Screen Rate (as defined in the Facility Agreement) as
            of 11.00 a.m. (Brussels time) on the Rate Fixing Day (as defined in
            the Facility Agreement) for the offering of deposits in euro for a
            period comparable to that Interest Period;

      (b)   if no Screen Rate is available for that Interest Period, the
            arithmetic mean (rounded upwards to the nearest four decimal places)
            of the rates, as supplied to the Agent at its request, quoted by the
            Reference Banks (as defined in the Facility Agreement) to leading
            banks in the European interbank market as of 11.00 a.m. (Brussels
            time) on the Rate Fixing Day for the offering of deposits in euro
            for a period comparable to that Interest Period; or

      (c)   if the rate cannot be determined under paragraph (a) or paragraph
            (b) above, the rate supplied to the Agent at its request by the
            British Bankers' Association for the offering of deposits in euro
            for a period commencing on the Rate Fixing Day and comparable to the
            Interest Period.

      The repayment schedule of the Loan follows: [INSERT REPAYMENT SCHEDULE]

II.   That the Mortgagor is the registered owner of the vessel described in
      Clause 3.

III.  In consideration of the foregoing, the appearers agree to grant this
      notarial deed of Vessel Mortgage as security for the full satisfaction and
      repayment of all present and future obligations and liabilities of the
      Mortgagor under the Facility Agreement described in Recital I which shall
      be governed by the following:

<PAGE>

                                       124

                                     CLAUSES

FIRST .- MORTGAGE.- Without prejudice to its unlimited liability pursuant to the
provisions of Article 1911 of the Spanish Civil Code and pursuant to the
provisions set out in the last paragraph of Art. 1857 of the Civil Code, the
Mortgagor secures all its present and future obligations and liabilities under
the Facility Agreement described in Recital I and the other Finance Documents
defined in the Facility Agreement (hereinafter the "SECURED LIABILITIES").

To such effect, the Mortgagor CREATES A MORTGAGE in favour of all the Banks as
joint and several creditors under the Facility Agreement as stated in Recital I
above in a proportionate manner to their respective commitments under the
Facility Agreement, which accept it, over the vessel described in Clause 3
(hereinafter, the "VESSEL") as security for the payment of the Secured
Liabilities for an amount of principal euro 185,000,000, for any interest,
accrued at the Interest Rate during the term of 24 months up to a maximum amount
pursuant to Article 10 of the Ship Mortgage Law of euro 18,500,000, for any
default interest, accrued at the Default Rate (as defined in the Facility
Agreement) during the term of 24 months for a maximum pursuant to Article 10 of
the Ship Mortgage Law of euro 37,000,000, for the repayment of the legal costs
and expenses from the eventual judicial or extrajudicial enforcement of the
mortgage up to a maximum of euro 9,250,000 and any costs in relation to the
effectiveness of the guarantee and conservation of the Vessel such as, inter
alia, the payment of taxes over the Vessel and the costs of ownership,
maintenance, fees and insurance premiums for the Vessel up to a maximum of euro
9,250,000.

For the purpose of the provisions of Articles 571 and seq. of Law 1/2000 of 7th
January, 2000, it is expressly agreed by the parties that the determination of
the debt able to be claimed in executive proceedings shall be carried out by a
certificate issued by the Spanish Security Agent as agent for the Banks which
evidences the balance of the account or accounts of the Mortgagor. By virtue of
the foregoing, the presentation of this deed duly notarised and of the notarial
record which incorporates the certificate, as issued by the Spanish Security
Agent as agent for the Banks, of the balance shown in the account of the
Mortgagor, evidencing that the determination of the debt has been carried out in
the manner stipulated in this deed by the parties and that the balance coincides
with the one which appears in the account or accounts of the Mortgagor, shall be
sufficient in order to exercise the executive proceedings.

It is hereby expressly agreed that the balance of each such account shall be
considered as an acknowledgement of debt due by the Mortgagor to the Banks, and
may be claimed pursuant to Clause Fifth.

Consequently, it is hereby expressly agreed that the Secured Liabilities amount
to euro 259,000,000.

The mortgage granted in this deed shall remain in full force and effect until
the Banks are satisfied that any and all Secured Liabilities have been
unconditionally and irrevocably paid and discharged in full.

SECOND.- The mortgage will extend to all chattels, rents, issues, profits,
indemnities, time charters and other ancillary elements expressed in article 7
of the Ship Mortgage Law, including any improvements or new equipment that may
be incorporated.

The extension of the mortgage to the aforesaid goods may be waived by the Banks
when requesting the public auction of the Vessel before the Court which deals
with the proceedings.

The mortgage shall be expressly extended to the indemnities raised from
insurance from time to time which belongs to the Vessel as well as to the
premiums which may be paid by the Agent, the Spanish Security Agent or any of
the Banks pursuant to Clause Fourth paragraph (c) below.

<PAGE>

                                      125

The parties instruct the notary public to notify to the relevant insurance
company [INSERT DETAILS IF KNOWN] of the existence of this mortgage over the
Vessel through a Notary conduct ("conducto notarial") in accordance with Article
40 of the Spanish law on Insurance Contract.

THIRD.-

[DESCRIPTION OF THE MORTGAGED VESSEL]

[TITLE]

[REGISTERED]

[CHARGES]

[DETAILS ON INSURANCE POLICIES]

The Vessel has been valued at euro [INSERT AMOUNT - TO BE PROVIDED BY APPROVED
VALUER (AS DEFINED IN THE FACILITY AGREEMENT) AT THE TIME OF DELIVERY].

If the above valuation of the Vessel would be disproportionate to its market
value at the time of enforcement of this notarial deed, the Majority Banks (as
defined in the Facility Agreement) will be entitled to request a second
valuation of an independent expert who will be appointed by the Directorate
General of the Merchant Marine or such equivalent administrative body which
replaced it.

The parties agree that the higher of both valuations of the Vessel shall be used
as the rate for enforcement purposes.

FOURTH.- From the date hereof and whilst any obligations arising from this deed
have not been completely settled, the Mortgagor undertakes, in addition and
without prejudice to the covenants contained in the Facility Agreement:

(a)   to maintain the Vessel in good repair and working condition and to effect
      in the Vessel, any ordinary and extraordinary repairs that would be
      necessary to maintain its value and operation, notifying the Spanish
      Security Agent of any damage or loss suffered by the Vessel;

(b)   to pay contributions, taxes, wages, salaries and social contributions of
      the crew, local taxes and other legitimate expenses that it should pay
      levied on the Vessel or on this mortgage, providing to the Spanish
      Security Agent any receipt issued for such payments if it so requires;

(c)   to insure and maintain insured the Vessel against the risk of fire,
      damages and loss, lightening, explosion and other similar risks for the
      duration of the security, in an insurance company of notorious solvency
      and to pay promptly all the insurance premiums. The Mortgagor undertakes
      from time to time at the request of the Spanish Security Agent to forward
      to the Spanish Security Agent evidence that the relevant premiums have
      been duly paid;

<PAGE>

                                       126

      Neither the insured amount nor any insurance policy can be modified
      without the prior written consent of the Majority Banks. The Agent or any
      of the Banks are expressly authorised to pay the insurance premiums on
      behalf of the Mortgagor if any insurance policy is terminated for any
      cause and has not been replaced by another insurance policy on
      substantially the same terms;

(d)   to keep the certificate of ownership of the Vessel on board pursuant to
      Article 14 of the Ship Mortgage Law;

(e)   generally, to comply with the terms and conditions established in the
      Facility Agreement;

(f)   not to sell or mortgage the Vessel without the prior written consent of
      all of the Banks); and

(g)   not to execute or enter into any type of transaction which implies any
      type of financial facilities or credit rights (the so called "prestamo a
      la gruesa") or credit with rights of retention of title which charge the
      Vessel and which are preferred to this mortgage in accordance with Article
      32 and seq. of the Ship Mortgage Law or by the Convention of Brussels on
      Unification of Rules Related to Ship Mortgages dated 27th May, 1967
      without the prior written consent of the Majority Banks.

FIFTH.- The mortgage may be enforced by the Spanish Security Agent, at the
election of the Majority Banks , following any of the proceedings available
under the Spanish Civil Procedural Law (Law 1/2/2000 of 7th January) and under
mortgage regulations and their related provisions subject to compliance, in each
case, with the provisions of Articles 41 to 44 of the Ship Mortgage Law, upon
the occurrence of any of the events of default listed below:

(a)   in any of the events of default set out in Clause 19 of the Facility
      Agreement, and in particular, default in the payment obligations of the
      Mortgagor;

(b)   the judicial request by the Mortgagor of suspension of payments or
      bankruptcy or the request of bankruptcy by a third party, or the inability
      of the Mortgagor to honour its obligations when due, or the proposal of
      any agreement in benefit of one or more of its creditors.

(c)   default by the Mortgagor of any of its obligations under this deed of
      first ranking mortgage, in particular of the payment of the insurance
      premiums;

(d)   if the Vessel is wrecked for sailing;

(e)   if the Vessel is disposed of without the prior written consent of the
      Majority Banks, provided the Mortgagor has not made a deposit for an
      amount equal to the Secured Liabilities in the manner provided under
      articles 1177 and 1180 of the Spanish Civil code. Any amounts due by the
      Mortgagor to the Banks will be claimed through a notary public prior to
      the enforcement of this Mortgage.

Pursuant to Article 48 of the Ship Mortgage Law this Deed may be enforced at the
election of the Spanish Security Agent (acting on the instructions of the
Majority Banks) in any jurisdiction where the Vessel may be located, in the
jurisdiction where this Deed is executed, in the jurisdiction where this Deed is
registered or, if different, in the jurisdiction of the address of the
Mortgagor.

From now on the Mortgagor expressly authorises the Banks to request, on their
own, the issue of a second and further copies of this notarial deed to the
effect of the provisions set out in paragraph 4 of

<PAGE>

                                      127

Article 517 of the new Civil Procedural Law (Law 1/2000 of 7th January). The
Mortgagor provides its consent so that any second or further copies of this
notarial deed shall have executive character and that this circumstance is
mentioned in the expedition note.

SIXTH.- If the Vessel is abandoned by the Mortgagor, the Spanish Security Agent,
as agent for the Banks, will be entitled to take "interim" possession to
maintain the Vessel, adopting to such effect the required actions to avoid the
loss or damage of the Vessel, including its displacement to any seaport or other
place where the integrity of the Vessel is guaranteed. The certificate of the
relevant Marine authority informing the abandonment, unjustified inactivity or
other similar circumstances will be sufficient to evidence the abandonment of
the Vessel.

All the costs and expenses generated shall be borne by the Mortgagor.

SEVENTH .- The Mortgagor shall pay any expenses arising from the execution,
registration, cancellation and amendment of the mortgage created under this deed
(except the costs of amendments requested at the sole discretion of the Banks),
and those arising from the issue of a First Copy for the Spanish Security Agent
or for any of the Banks, and those arising from its registration in the Special
Registry of Ships of the Canary Islands, the release of the mortgage, and all
taxes (including those that are levied today or in the future). However, the
costs of transferring the interest of any Bank in this Mortgage in accordance
with Clause 11 below shall be borne by the new bank.

The Mortgagor will also pay all costs, expenses and damages due to the
non-compliance of this deed, including the fees of the lawyer and the court
agent, if the Banks or any of them have used their services, even if these were
not legally necessary.

EIGHTH .- The Mortgagor undertakes to execute bearing all costs, at the request
of the Spanish Security Agent, any further notarial deed of amendment
("Escritura de Rectificacion o Subsanacion") that may be required in order to
record this mortgage in the Special Registry of Ships of the Canary Islands and
to amend and complete any defect indicated by the written or oral comments of
the Registrar who examines this deed.

For this purpose, the Mortgagor hereby appoints Mr. [INSERT CONTACT] and Mr.
[Eduardo Sebastian de Erice y Malo de Molina] and Mr. [MARIANO LOPEZ PEOAS], so
that any of them may grant as many notarial deeds of amendment as may be
required to record this mortgage in the Special Registry of Ships of the Canary
Islands and determine the content of such subsanation or rectification deed to
complete or correct any defect indicated by the Registrar which may prevent the
recording of the mortgage.

NINTH .- If in the examination of this deed, the Registrar opines that any
clause, provision, paragraph, subparagraph, line or mention in this deed is not
recordable, the parties expressly accept its opinion and hereby renounce to the
registration of such a clause, provision, paragraph, subparagraph, line or
mention, and specifically request the partial registration of this deed, so that
this deed is recorded and the mortgage is created.

TENTH.- The parties declare that the operation hereby formalised is not subject
to VAT and is subject to Stamp Duty Tax but exempted to it pursuant to article
74 of Law 19/1994 of 6th July on Special Tax Regime in the Canary Islands.

<PAGE>

                                      128

ELEVENTH.-: Any of the Banks shall have the right to assign or novate its
interest in this Mortgage in accordance with the provisions of Clause 27
(Changes to the Parties) of the Facility Agreement without the consent of the
Mortgagor.

The Mortgagor is not allowed to assign this mortgage without the prior written
consent of the Majority Banks.

TWELFTH.-: Any notification required in any enforcement procedure shall be
delivered to the following addresses:

-     The Spanish Security Agent
      Paseo de la Castellana, 51
      28046, Madrid
      Spain

      Facsimile: +34 91 319 2900
      Attention: Michael Hernan

-     The Mortgagor
      c/o Musgo n degrees 5
      2 degrees Plta
      LA FLORIDA
      28023, Madrid

      Facsimile: +34 91 307 7043
      Attention: Andres Luna

THIRTEENTH: This Mortgage shall be governed by Spanish law and by the relevant
international treaties under which Spain is a party, specially by the Convention
of Brussels on Unification of Rules Related to Ship Mortgages dated 27th May,
1967.

So it is said and accepted by the appearers in their capacity as they act, whom
I orally admonish about the legal implications.

After reading this notarial deed, the appearers agree to it, approve it, ratify
it and sign with me, the Notary.

[EXECUTION PROVISIONS TO BE COMPLETED BY THE MADRID NOTARY]

<PAGE>

                                      129

NUMBER [___]

                                   APPENDIX A

                                     PART II

                    AIE NOTARIAL DEED OF MORTGAGE OVER VESSEL
 [TO BE AMENDED BY A & O MADRID FOLLOWING AGREEMENT OF MORTGAGE AMENDMENT DEED]

In Madrid, my residence, on the ______________________, 200[ ]

Before me, ____________________________ Notary Public of Madrid and of its Bar.

                                     APPEAR

OF ONE PART,

Mr_________, of legal age, [single/married], [profession], nationality with
domicile in _______________, holder of [Spanish identity card/passport] number
________

ON THE SECOND PART,

Mr_________, of legal age, [single/married], [profession], nationality, with
domicile in _______________, holder of [Spanish identity card/passport] number
___________

                                     WHO ACT

The first one, on behalf of [A.I.E. INSERT FULL NAME]., (hereinafter the
"MORTGAGOR"), with registered address at [INSERT ADDRESS], and registered in the
Mercantile Registry of [_________] at Volume [______], Book [________], Sheet
[________] and with Tax Identity Number (C.I.F.) [______], [in conformity with a
resolution of its Board of Directors of _________________ ] or [as director of
the company duly appointed on ______________] or [pursuant to the powers of
attorney granted to him in a deed executed before the Notary Public of
______________, Mr._____________________].

And the second one, on behalf of each of:

1.    J.P. MORGAN BANK S.A. with registered address at Gran Via, 17, Bilbao,
      Spain and registered in the Mercantile Registry of at Volume 869 Book 163
      and Sheet BI-13139 and with Tax Identity Number C.I.F. [     ] in its
      capacity as Spanish Security Agent (hereinafter the "SPANISH SECURITY
      AGENT"), pursuant to a power of attorney granted to him in a deed executed
      before the Notary Public of ______________, Mr._____________________];

2.    COMMERZBANK AKTIENGESELLSCHAFT, with company registration
      number____________________________________________COMMERZBANK
      AKTIENGESELLSCHAFT is a company validly incorporated and duly existing
      under the laws of [____________], pursuant to a

<PAGE>

                                      130

      power of attorney granted to him in a deed executed before the Notary
      Public of ______________, Mr._____________________];

3.    CALYON, with company registration number SIREN 304 187 701 at the Registre
      du Commerce et des Societes of Nanterre [ ] is a company validly
      incorporated and duly existing under the laws of France, pursuant to a
      power of attorney granted to him in a deed executed before the Notary
      Public of ______________, Mr._____________________];

4.    JPMORGAN CHASE BANK, N.A., with company registration number [     ] and
      registered office at [     ] is a company validly incorporated and duly
      existing under the laws of England and Wales, pursuant to a power of
      attorney granted to him in a deed executed before the Notary Public of
      ______________, Mr._____________________];

5.    HSH NORDBANK AKTIENGESELLSCHAFT, with company registration
      number_______________________________________HSH NORDBANK
      AKTIENGESELLSCHAFT is a company validly incorporated and duly existing
      under the laws of [____________], pursuant to a power of attorney granted
      to him in a deed executed before the Notary Public of ______________,
      Mr._____________________],

6.    THE GOVERNOR AND COMPANY OF THE BANK OF SCOTLAND, a company incorporated
      by an Act of Scots Parliament and duly existing under the laws of Scotland
      , pursuant to a power of attorney granted to him in a deed executed before
      the Notary Public of ______________, Mr._____________________];

(together hereinafter the "BANKS").

The appearers have, in my opinion, as they act full legal authority to execute
this notarial deed of vessel mortgage.

                                     WHEREAS

I.    The Mortgagor has agreed with NAVIERA TEEKAY GAS IV S.L., (hereinafter the
      "BUYER"), with registered address at C/Musgo n degrees 5, 2 degrees Plta.,
      LA FLORIDA 28023, Madrid to supply a liquid natural gas carrier more
      particularly described in Clause 3 below to the Buyer under the document
      described below.

II.   The Vessel has been constructed by IZAR CONSTRUCCIONES NAVALES, S.A.
      (hereinafter the "BUILDER") in accordance with a shipbuilding contract
      dated 23rd December, 2000 as amended and restated on      , December, 2001
      between SUPERAPPLY LIMITED (hereinafter "SUPERAPPLY") and the Builder and
      as novated in favour of the Mortgagor pursuant to a novation agreement
      dated [INSERT DATE] between the Builder, Superapply and the Mortgagor (the
      "SHIPBUILDING CONTRACT").

III.  The Mortgagor will supply the Vessel to the Buyer pursuant to a bareboat
      charter between the Mortgagor and the Buyer dated [INSERT DATE] (the
      "BAREBOAT CHARTER").

IV.   The Buyer has made instalment payments to the Mortgagor in accordance with
      a schedule of payments annexed to the Bareboat Charter which total euro
      160,000,000.

<PAGE>
                                      131

V.    In order to make the instalment payments to the Mortgagor, the Buyer has
      entered into, inter alia, a syndicated credit facility agreement dated
      December, 2001, (the "FACILITY AGREEMENT") evidenced in a notarial deed
      dated [INSERT DATE] granted before [INSERT DETAILS] number of this
      notarial file. Under the Facility Agreement, the Mortgagor has received a
      loan of up to euro 185,000,000 from the Banks (hereinafter, the "LOAN").

      The commitments and percentage (%) of participations of the Banks under
      the Facility Agreement are as follows:

<TABLE>
<CAPTION>
Name of the Bank       Commitments    %
----------------       -----------    -
<S>                    <C>            <C>
Commerzbank
Aktiengesellschaft,
Sucursal en Espana

Calyon

JPMorgan Chase Bank,
N.A.

HSH Nordbank
Aktiengesellschaft

The Governor and
Company of the
Bank of Scotland
</TABLE>

      Each interest period is determined in accordance with the Facility
      Agreement (an "INTEREST PERIOD").

      The rate of interest on the Loan for each Interest Period (the "INTEREST
      RATE") shall be the rate per annum determined by J.P. Morgan Europe
      Limited as agent under the Facility Agreement (the "AGENT") to be the
      aggregate of the applicable:

      (a) Margin of 1.20% per annum;

      (b) EURIBOR; and

      (c) the Mandatory Cost (as defined in the Facility Agreement).

      "EURIBOR"

      means:

      (a) the applicable Screen Rate (as defined in the Facility Agreement) as
          of 11.00 a.m. (Brussels time) on the Rate Fixing Day (as defined in
          the Facility Agreement) for the offering of deposits in euro for a
          period comparable to that Interest Period;

      (b) if no Screen Rate is available for that Interest period, the
          arithmetic mean (rounded upward to the nearest four decimal place) of
          the rate, as supplied to the Agent at its request, quoted by the
          Reference Banks (as defined in the Facility Agreement) to leading
          banks in the European interbank market as of 11.00 a.m. (Brussels
          time) on

<PAGE>
                                      132

          the Rate Fixing Day for the offering of deposits in euro for a period
          comparable to that Interest Period; and

      (c) if the rate cannot be determined under paragraph (a) or paragraph (b)
          above, the rate supplied to the Agent at its request by the British
          Bankers' Association for the offering of deposits in euro for a period
          commencing on the Rate fixing Date and comparable to the Interest
          Period.

      The repayment schedule of the Loan is as follows:

      [INSERT REPAYMENT SCHEDULE]

VI.   That the Mortgagor is the registered owner of the vessel described in
      Clause 3.

VII.  In consideration of the foregoing, the appearers agree to grant this
      notarial deed of Vessel Mortgage as security for the full satisfaction and
      repayment of all present and future obligations and liabilities of the
      Buyer under the Facility Agreement described in Recital V which shall be
      governed by the following:

                                     CLAUSES

FIRST .- MORTGAGE.- The Mortgagor CREATES A MORTGAGE in favour of all the Banks
as joint and several creditors under the Facility Agreement in a proportionate
manner to their respective commitments under the Facility Agreement as stated in
Recital V above, which accept it, over the vessel described in Clause 3
(hereinafter, the "VESSEL") as security for the payment by the Buyer of all of
the Buyer's present and future obligations and liabilities under the Facility
Agreement (hereinafter the "SECURED LIABILITIES") for an amount of principal
euro 180,000,000, for any interest,], accrued at the Interest Rate during the
term of 24 months up to a maximum amount pursuant to Art. 10 of the Ship
Mortgage Law of euro 18,500,000, for any default interest, accrued at the
Default Rate (as defined in the Facility Agreement) during the term of 24 months
for a maximum pursuant to Article 10 of the Ship Mortgage Law of euro
37,000,000, for the repayment of the legal costs and expenses from the eventual
judicial or extrajudicial enforcement of the mortgage up to a maximum of euro
9,250,000 and any costs in relation to the effectiveness of the guarantee and
conservation of the Vessel such as, inter alia, the payment of taxes over the
Vessel and the costs of ownership, maintenance fees and insurance premiums for
the Vessel up to a maximum of euro 9,250,000.

This mortgage is created without prejudice to the unlimited liability of the
Buyer pursuant to the provisions of Article 1911 of the Spanish Civil Code and
pursuant to the provisions set out in the last paragraph of Article 1857 of the
Spanish Civil Code.

For the purpose of the provisions of Articles 571 and seq. of Law 1/2000 of 7th
January, 2000, it is expressly agreed by the parties that the determination of
the debt able to be claimed in executive proceedings shall be carried out by a
certificate issued by the Spanish Security Agent as agent for the Banks which
evidences the balance of the account or accounts of the Buyer. By virtue of the
foregoing, the presentation of this deed duly notarised and of the notarial
record which incorporates the certificate, as issued by the Spanish Security
Agent as agent for the Banks, of the balance shown in the account of the Buyer,
evidencing that the determination of the debt has been carried out in the manner
stipulated in this deed by the parties and that the balance coincides with the
one which

<PAGE>

                                      133

appears in the account or accounts of the Buyer, shall be sufficient in order to
exercise the executive proceedings.

It is hereby expressly agreed that the balance of each such account shall be
considered as an acknowledgement of debt due by the Buyer to the Banks, and may
be claimed pursuant to Clause Fifth.

Consequently, it is hereby expressly agreed that the Secured Liabilities amount
to euro 259,000,000.

The mortgage granted in this deed shall remain in full force and effect until
the Banks are satisfied that any and all Secured Liabilities have been
unconditionally and irrevocably paid and discharged in full.

SECOND.- The mortgage will extend to all chattels, rents, issues, profits,
indemnities, and other ancillary elements expressed in Article 7 of the Ship
Mortgage Law, including any improvements or new equipment that may be
incorporated.

The extension of the mortgage to the aforesaid goods may be waived by the Banks
when requesting the public auction of the Vessel before the Court which deals
with the proceedings.

The mortgage shall be expressly extended to the indemnities raised from
insurance from time to time which belongs to the Vessel as well as to the
premiums which may be paid by the Agent, the Spanish Security Agent or any of
the Banks pursuant to the Facility Agreement.

The parties instruct the notary public to notify to the [relevant insurance
company][INSERT DETAILS IF KNOWN] of the existence of this mortgage over the
Vessel through a Notary conduct ("conducto notarial") in accordance with Article
40 of the Spanish law on Insurance Contract.

THIRD.-

[DESCRIPTION OF THE MORTGAGED VESSEL]

[TITLE]

[REGISTERED]

[CHARGES]

[DETAILS ON INSURANCE POLICIES]

The Vessel has been valued at euro [INSERT AMOUNT - TO BE PROVIDED BY APPROVED
VALUER (AS DEFINED IN THE FACILITY AGREEMENT) AT THE TIME OF DELIVERY OF THE
VESSEL].

If the above valuation of the Vessel would be disproportionate to its market
value at the time of enforcement of this notarial deed, the Majority Banks (as
defined in the Facility Agreement) will be entitled to request a second
valuation of an independent expert who will be appointed by the Directorate
General of the Merchant Marine or such equivalent administrative body which
replaced it.

The parties agree that the higher of both valuations of the Vessel shall be used
as the rate for enforcement purposes.

<PAGE>

                                      134

FOURTH.- From the date hereof and whilst any obligations arising from this deed
have not been completely settled, the Mortgagor undertakes:

-     to keep the certificate of ownership of the Vessel on board pursuant to
      Article 14 of the Ship Mortgage Law;

-     not to sell or mortgage the Vessel without the prior written consent of
      all of the Banks; and

-     not to execute or enter into any type of transaction which implies any
      type of financial facilities or credit rights (the so called "prestamo a
      la gruesa") or credit with rights of retention of title which charge the
      Vessel and which are preferred to this mortgage in accordance with Article
      32 and seq. of the Ship Mortgage Law or by the Convention of Brussels on
      Unification of Rules Related to Ship Mortgages dated 27th May, 1967
      without the prior written consent of the Majority Banks.

FIFTH.- The mortgage may be enforced by the Spanish Security Agent, at the
election of the Majority Banks, following any of the proceedings available under
the Spanish Civil Procedural Law (Law 1/2/2000 of 7th January) and under
mortgage regulations and their related provisions subject to compliance, in each
case, with the provisions of Articles 41 to 44 of the Ship Mortgage Law, upon
the occurrence of any of the events of default listed below:

(a)   in any of the events of default set out in Clause 19 of the Facility
      Agreement, and in particular, default in the payment obligations of the
      Buyer;

(b)   the judicial request by the Buyer or the Mortgagor of suspension of
      payments or bankruptcy or the request of bankruptcy by a third party, or
      the inability of the Buyer or the Mortgagor to honour its obligations when
      due, or the proposal of any agreement in benefit of one or more of its
      creditors.

(c)   default by the Mortgagor of any of its obligations under this deed of
      mortgage;

(d)   if the Vessel is wrecked for sailing;

(e)   if the Vessel is disposed of without the prior written consent of the
      Majority Banks, provided the Mortgagor has not made a deposit for an
      amount equal to the Secured Liabilities in the manner provided under
      articles 1177 and 1180 of the Spanish Civil code. Any amounts due by the
      Mortgagor to the Banks will be claimed through a notary public prior to
      the enforcement of this Mortgage.

Pursuant to Article 48 of the Ship Mortgage Law this Deed may be enforced at the
election of the Spanish Security Agent (acting on the instructions of the
Majority Banks) in any jurisdiction where the Vessel may be located, in the
jurisdiction where this Deed is executed, in the jurisdiction where this Deed is
registered or, if different, in the jurisdiction of the address of the Buyer or
the Mortgagor.

From now on the Mortgagor expressly authorises the Banks to request, on their
own, the issue of a second and further copies of this notarial deed to the
effect of the provisions set out in paragraph 4 of Article 517 of the new Civil
Procedural Law (Law 1/2000 of 7th January). The Mortgagor provides

<PAGE>
                                      135

its consent so that any second or further copies of this notarial deed shall
have executive character and that this circumstance is mentioned in the
expedition note.

SIXTH.- If the Vessel is abandoned by the Mortgagor, the Spanish Security Agent,
as agent for the Banks, will be entitled to take "interim" possession to
maintain the Vessel, adopting to such effect the required actions to avoid the
loss or damage of the Vessel, including its displacement to any seaport or other
place where the integrity of the Vessel is guaranteed. The certificate of the
relevant Marine authority informing the abandonment, unjustified inactivity or
other similar circumstances will be sufficient to evidence the abandonment of
the Vessel.

All the costs and expenses generated shall be borne by the Mortgagor.

SEVENTH .-

Any expenses arising from the execution, registration, cancellation and
amendment of the mortgage created under this deed and those arising from the
issue of a First Copy for the Spanish Security Agent or for any Banks, and those
arising from its registration in the Special Registry of Ship of the Canary
Islands, the release of this deed of mortgage and all taxes (including those
that are levied today or in the future) shall be paid by the Buyer in accordance
with Clause 10.7 (Payments) of the Facility Agreement.

The Mortgagor will also pay all costs, expenses and damages due to its
non-compliance with this deed, including the fees of the lawyer and the court
agent, if the Banks or any of them have used their services, even if these were
not legally necessary.

EIGHTH .- If any further notarial deed of amendment ("Escritura de Rectificacion
o Subsanacion") is required in order to record this mortgage in the Special
Registry of Ships of the Canary Islands and to amend and complete any defect
indicated by the written or oral comments of the Registrar who examines this
deed, the Mortgagor undertakes to enter such further notarial deed of amendment.

For this purpose, the Mortgagor hereby appoints Mr. [INSERT CONTACT] and Mr.
[Eduardo Sebastian de Erice y Malo de Molina] and Mr. [INSERT CONTACT], so that
any of them may grant as many notarial deeds of amendment as may be required to
record this mortgage in the Special Registry of Ships of [the Canary Islands]
and determine the content of such subsanation or rectification deed to complete
or correct any defect indicated by the Registrar which may prevent the recording
of the mortgage.

NINTH .- If in the examination of this deed, the Registrar opines that any
clause, provision, paragraph, subparagraph, line or mention in this deed is not
recordable, the parties expressly accept its opinion and hereby renounce to the
registration of such a clause, provision, paragraph, subparagraph, line or
mention, and specifically request the partial registration of this deed, so that
this deed is recorded and the mortgage is created.

TENTH.- The parties declare that the operation hereby formalised is not subject
to VAT and is subject to Stamp Duty Tax but exempted to it pursuant to article
74 of Law 19/1994 of 6th July on Special Tax Regime in the Canary Islands.

<PAGE>

                                      136

ELEVENTH.-: Any of the Banks shall have the right to assign or novate its
interest in this Mortgage in accordance with the provisions of Clause 27
(Changes to the Parties) of the Facility Agreement without the consent of the
Mortgagor.

The Mortgagor is not allowed to assign this mortgage without the prior written
consent of the Majority Banks.

TWELFTH.-: Any notification required in any enforcement procedure shall be
delivered to the following addresses:

-     The Spanish Security Agent
      Paseo de la Castellana, 51
      28046 Madrid
      Spain
      Facsimile: +34 91 319 2900
      Attention: Michael Hernan

-     The Mortgagor
      Paseo de la Castellana, 55
      28023Madrid
      Spain
      Facsimile: [INSERT NUMBER]
      Attention: [INSERT CONTACT]

THIRTEENTH: This Mortgage shall be governed by Spanish law and by the relevant
international treaties under which Spain is a party, specially by the Convention
of Brussels on Unification of Rules Related to Ship Mortgages dated 27th May,
1967.

So it is said and accepted by the appearers in their capacity as they act, whom
I orally admonish about the legal implications.

After reading this notarial deed, the appearers agree to it, approve it, ratify
it and sign with me, the Notary.

[EXECUTION PROVISIONS TO BE COMPLETED BY THE MADRID NOTARY]

<PAGE>

                                      137
NUMBER [___]

                                   APPENDIX B

                                     PART I

                      NOTARIAL DEED OF MORTGAGE OVER VESSEL

                              [SWAP BANK MORTGAGE]

In Madrid, my residence, on the ______________________, 200[ ]

Before me, ____________________________, Notary Public of Madrid and of its Bar.

                                     APPEAR

OF ONE PART,

Mr_________, of legal age, [single/married], [profession], nationality with
domicile in _______________, holder of [Spanish identity card/passport] number
________

ON THE SECOND PART,

Mr_________, of legal age, [single/married], [profession], nationality, with
domicile in________________, holder of [Spanish identity card/passport] number
________

                                     WHO ACT

The first one, on behalf of NAVIERA TEEKAY GAS IV S.L., (hereinafter the
"MORTGAGOR"), with registered address at C/Musgo n degrees 5, 2 degrees
Plta., LA FLORIDA 28023, Madrid, and registered in the Mercantile Registry of
Madrid at Volume 16.879, Book 0, Sheet M-288591 and with Tax Identity Number
C.I.F. A-83090605 [in conformity with a resolution of its Board of Directors of
_________________ ] or [as director of the company duly appointed on
______________] or [pursuant to the powers of attorney granted to him in a deed
executed before the Notary Public of ______________, Mr._____________________].

And the second one, on behalf of each of:

1.    J.P. MORGAN BANK S.A. with registered address at Gran Via, 17, Bilbao,
      Spain and registered in the Mercantile Registry of Vizcaya at Volume 869
      Book 163 and Sheet B1-13139 and with Tax Identity Number C.I.F.[INSERT
      NO.] in its capacity as Spanish Security Agent (hereinafter the "SPANISH
      SECURITY AGENT"), pursuant to a power of attorney granted to him in a deed
      executed before the Notary Public of ______________,
      Mr._____________________];

2.    [INSERT DETAILS OF APPROPRIATE SWAP BANK], in its capacity as a Swap Bank
      (hereinafter, the "BANK"), with [company registration][corporate] number
      [INSERT NUMBER]. The Bank is a

<PAGE>
                                      138

      company validly incorporated and duly existing under the laws of [England
      and Wales], pursuant to a power of attorney granted to him in a deed
      executed before the Notary Public of ________ , Mr.
      ________________________.

The appearers have, in my opinion, as they act full legal authority to execute
this notarial deed of vessel mortgage.

                                     WHEREAS

I.    The Mortgagor and the Bank have entered into an interest rate swap
      transaction dated [INSERT DATE] (the "TRANSACTION") which is governed by,
      supplements and forms part of an ISDA Master Agreement between the
      Mortgagor and the Bank dated as of [INSERT DATE] (the "ISDA" and, together
      with the Transaction, the "SWAP AGREEMENT").

II.   That the Mortgagor is the registered owner of the vessel described in
      Clause 3.

III.  In consideration of the foregoing, the appearers agree to grant this
      notarial deed of Vessel Mortgage as security for the full satisfaction and
      repayment of all present and future obligations and liabilities of the
      Mortgagor under the Swap Agreement described in Recital I which shall be
      governed by the following:

                                     CLAUSES

FIRST .- MORTGAGE.- Without prejudice to its unlimited liability pursuant to the
provisions of Article 1911 of the Spanish Civil Code and pursuant to the
provisions set out in the last paragraph of Art. 1857 of the Civil Code, the
Mortgagor secures all its present and future obligations and liabilities under
the Swap Agreement described in Recital I (hereinafter the "SECURED
LIABILITIES").

To such effect, the Mortgagor CREATES A MORTGAGE with equal ranking to:

1.    the vessel mortgage granted before me [INSERT DETAILS OF THE SPANISH
      NOTARY PUBLIC] at the date hereof in favour of the Banks (as defined in
      the credit facility agreement dated [INSERT DATE], between, inter alia,
      the Mortgagor and the Spanish Security Agent the ("FACILITY AGREEMENT") to
      secure the payment obligations of the Mortgagor under the Facility
      Agreement;

2.    the vessel mortgage granted before me [INSERT DETAILS OF THE SPANISH
      NOTARY PUBLIC] at the date hereof in favour of [INSERT NAME OF APPROPRIATE
      SWAP BANK] to secure the payment obligations of the Mortgagor under a swap
      agreement with [INSERT NAME OF APPROPRIATE SWAP BANK];

3.    the vessel mortgage granted before me [INSERT DETAILS OF THE SPANISH
      NOTARY PUBLIC] at the date hereof in favour of [INSERT NAME OF APPROPRIATE
      SWAP BANK] to secure the payment obligations of the Mortgagor under a swap
      agreement with [INSERT NAME OF APPROPRIATE SWAP BANK];

      in favour of the Bank as creditor under the Swap Agreement, which accepts
      it, over the vessel described in clause 3 (hereinafter, the "VESSEL") as
      security for the payment of the Secured Liabilities for an amount of
      principal euro [COMPLETE WHEN DETAILS OF RELEVANT SWAP BANK'S SWAP
      COMMITMENT IS ASCERTAINED - I.E. THE PROPORTION OF TOTAL AMOUNT OF THE
      SWAP (E185 MILLION) TAKEN BY SWAP BANK (THE "MORTGAGE VALUE")], for
      any interest accrued at the

<PAGE>

                                      139

      Interest Rate (as defined in the Facility Agreement) during the term of 24
      months up to a maximum amount pursuant to Art. 10 of the Ship Mortgage Law
      of euro [INSERT 10% OF THE MORTGAGE VALUE], for any default interest
      accrued at the Default Rate (as defined in the Facility Agreement) during
      the term of 24 months for a maximum pursuant to Art. 10 of the Ship
      Mortgage Law of euro [INSERT 20% OF THE MORTGAGE VALUE], for the repayment
      of the legal costs and expenses from the eventual judicial or
      extrajudicial enforcement of the mortgage up to a maximum of euro [INSERT
      5% OF THE MORTGAGE VALUE] and any costs in relation to the effectiveness
      of the guarantee and conservation of the Vessel such as, inter alia, the
      payment of taxes over the Vessel and the ownership maintenance fees and
      insurance premium for the Vessel up to a maximum of euro [INSERT 5% OF
      MORTGAGE VALUE].

For the purpose of the provisions of Articles 571 and seq. of Law 1/2000 of 7th
January, 2000, it is expressly agreed by the parties that the determination of
the debt able to be claimed in executive proceedings shall be carried out by a
certificate issued by the Bank which evidences the balance of the account or
accounts of the Mortgagor. By virtue of the foregoing, the presentation of this
deed duly notarised and of the notarial record which incorporates the
certificate, as issued by the Bank, of the balance shown in the account of the
Mortgagor, evidencing that the determination of the debt has been carried out in
the manner stipulated in this deed by the parties and that the balance coincides
with the one which appears in the account or accounts of the Mortgagor, shall be
sufficient in order to exercise the executive proceedings.

It is hereby expressly agreed that the balance of each such account shall be
considered as an acknowledgement of debt due by the Mortgagor to the Bank, and
may be claimed pursuant to Clause Fifth.

Consequently, it is hereby expressly agreed that the Secured Liabilities amount
to euro [INSERT 140% OF MORTGAGE VALUE].

The mortgage granted in this deed shall remain in full force and effect until
the Bank is satisfied that any and all Secured Liabilities have been
unconditionally and irrevocably paid and discharged in full.

SECOND.- The mortgage will extend to all chattels, rents, issues, profits,
indemnities, time charters and other ancillary elements expressed in article 7
of the Ship Mortgage Law, including any improvements or new equipment that may
be incorporated.

The extension of the mortgage to the aforesaid goods may be waived by the Bank
when requesting the public auction of the Vessel before the Court which deals
with the proceedings.

The mortgage shall be expressly extended to the indemnities raised from
insurance from time to time which belongs to the Vessel as well as to the
premiums which may be paid by the Bank pursuant to Clause Fourth paragraph (c)
below.

The parties instruct the notary public to notify to the relevant insurance
company [INSERT DETAILS IF KNOWN] of the existence of this mortgage over the
Vessel through a Notary conduct ("conducto notarial") in accordance with Article
40 of the Spanish law on Insurance Contract.

THIRD.-

[DESCRIPTION OF THE MORTGAGED VESSEL]

<PAGE>

                                      140

[TITLE]

[REGISTERED]

[CHARGES]

[DETAILS ON INSURANCE POLICIES]

The Vessel has been valued at euro [INSERT AMOUNT - TO BE PROVIDED BY APPROVED
VALUER (AS DEFINED IN THE FACILITY AGREEMENT) AT THE TIME OF DELIVERY OF THE
VESSEL].

If the above valuation of the Vessel would be disproportionate to its market
value at the time of enforcement of this notarial deed, the Bank will be
entitled to request a second valuation of an independent expert who will be
appointed by the Directorate General of the Merchant Marine or such equivalent
administrative body which replaced it.

The parties agree that the higher of both valuations of the Vessel shall be used
as the rate for enforcement purposes.

FOURTH.- From the date hereof and whilst any obligations arising from this deed
have not been completely settled, the Mortgagor undertakes, in addition and
without prejudice to the covenants contained in the Swap Agreement:

(a)   to maintain the Vessel in good repair and working condition and to effect
      in the Vessel, any ordinary and extraordinary repairs that would be
      necessary to maintain its value and operation, notifying the Bank of any
      damage or loss suffered by the Vessel;

(b)   to pay contributions, taxes, wages, salaries and social contributions of
      the crew, local taxes and other legitimate expenses that it should pay
      levied on the Vessel or on this mortgage, providing to the Bank any
      receipt issued for such payments if it so requires;

(c)   to insure and maintain insured the Vessel against the risk of fire,
      damages and loss, lightening, explosion and other similar risks for the
      duration of the security, in an insurance company of notorious solvency
      and to pay promptly all the insurance premiums. The Mortgagor undertakes
      from time to time at the request of the Bank to forward to the Bank
      evidence that the relevant premiums have been duly paid;

      Neither the insured amount nor any insurance policy can be modified
      without the prior written consent of the Bank. The Bank is expressly
      authorised to pay the insurance premiums on behalf of the Mortgagor if any
      insurance policy is terminated for any cause and has not been replaced by
      another insurance policy on substantially the same terms;

(d)   to keep the certificate of ownership of the Vessel on board pursuant to
      Article 14 of the Ship Mortgage Law;

(e)   generally, to comply with the terms and conditions established in the
      Facility Agreement;

(f)   not to sell or mortgage the Vessel without the prior written consent of
      all of the Banks (as defined in the Facility Agreement); and

<PAGE>

                                      141

(g)   not to execute or enter into any type of transaction which implies any
      type of financial facilities or credit rights (the so called "prestamo a
      la gruesa") or credit with rights of retention of title which charge the
      Vessel and which are preferred to this mortgage in accordance with Article
      32 and seq. of the Ship Mortgage Law or by the Convention of Brussels on
      Unification of Rules Related to Ship Mortgages dated 27th May, 1967
      without the prior written consent of the Bank.

FIFTH.- The mortgage may be enforced by the Spanish Security Agent, at the
election of the Bank , following any of the proceedings available under the
Spanish Civil Procedural Law (Law 1/2/2000 of 7th January) and under mortgage
regulations and their related provisions subject to compliance, in each case,
with the provisions of Articles 41 to 44 of the Ship Mortgage Law, upon the
occurrence of any of the events of default listed below:

(a)   in any of the events of default set out in Swap Agreement, and in
      particular, default in the payment obligations of the Mortgagor;

(b)   the judicial request by the Mortgagor of suspension of payments or
      bankruptcy or the request of bankruptcy by a third party, or the inability
      of the Mortgagor to honour its obligations when due, or the proposal of
      any agreement in benefit of one or more of its creditors.

(c)   default by the Mortgagor of any of its obligations under this deed of
      first ranking mortgage, in particular of the payment of the insurance
      premiums;

(d)   if the Vessel is wrecked for sailing;

(e)   if the Vessel is disposed of without the prior written consent of the
      Bank, provided the Mortgagor has not made a deposit for an amount equal to
      the Secured Liabilities in the manner provided under articles 1177 and
      1180 of the Spanish Civil code. Any amounts due by the Mortgagor to the
      Bank will be claimed through a notary public prior to the enforcement of
      this Mortgage.

Pursuant to Article 48 of the Ship Mortgage Law this Deed may be enforced at the
election of the Spanish Security Agent (acting on the instructions of the Bank)
in any jurisdiction where the Vessel may be located, in the jurisdiction where
this Deed is executed, in the jurisdiction where this Deed is registered or, if
different, in the jurisdiction of the address of the Mortgagor.

From now on the Mortgagor expressly authorises the Bank to request, on their
own, the issue of a second and further copies of this notarial deed to the
effect of the provisions set out in paragraph 4 of Article 517 of the new Civil
Procedural Law (Law 1/2000 of 7th January). The Mortgagor provides its consent
so that any second or further copies of this notarial deed shall have executive
character and that this circumstance is mentioned in the expedition note.

SIXTH.- If the Vessel is abandoned by the Mortgagor, the Bank will be entitled
to take "interim" possession to maintain the Vessel, adopting to such effect the
required actions to avoid the loss or damage of the Vessel, including its
displacement to any seaport or other place where the integrity of the Vessel is
guaranteed. The certificate of the relevant Marine authority informing the
abandonment, unjustified inactivity or other similar circumstances will be
sufficient to evidence the abandonment of the Vessel.

All the costs and expenses generated shall be borne by the Mortgagor.

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                                      142

SEVENTH .- The Mortgagor shall pay any expenses arising from the execution,
registration, cancellation and amendment of the mortgage created under this deed
(except the costs of amendments requested at the sole discretion of the Bank),
and those arising from the issue of a First Copy for the Bank, and those arising
from its registration in the Special Registry of Ships of the Canary Islands,
the release of the mortgage, and all taxes (including those that are levied
today or in the future). However, the costs of transferring the interest of the
Mortgagee in this Mortgage in accordance with Clause 11 below shall be borne by
the new mortgagee.

The Mortgagor will also pay all costs, expenses and damages due to the
non-compliance of this deed, including the fees of the lawyer and the court
agent, if the Bank has used its services, even if these were not legally
necessary.

EIGHTH .- The Mortgagor undertakes to execute bearing all costs, at the request
of the Bank, any further notarial deed of amendment ("Escritura de Rectificacion
o Subsanacion") that may be required in order to record this mortgage in the
Special Registry of Ships of the Canary Islands and to amend and complete any
defect indicated by the written or oral comments of the Registrar who examines
this deed.

For this purpose, the Mortgagor hereby appoints Mr. [INSERT CONTACT] and Mr.
[Eduardo Sebastian de Erice y Malo de Molina] and Mr. [MARIANO LOPEZ PEOAS], so
that any of them may grant as many notarial deeds of amendment as may be
required to record this mortgage in the Special Registry of Ships of the Canary
Islands and determine the content of such subsanation or rectification deed to
complete or correct any defect indicated by the Registrar which may prevent the
recording of the mortgage.

NINTH .- If in the examination of this deed, the Registrar opines that any
clause, provision, paragraph, subparagraph, line or mention in this deed is not
recordable, the parties expressly accept its opinion and hereby renounce to the
registration of such a clause, provision, paragraph, subparagraph, line or
mention, and specifically request the partial registration of this deed, so that
this deed is recorded and the mortgage is created.

TENTH.- The parties declare that the operation hereby formalised is not subject
to VAT and is subject to Stamp Duty Tax but exempted to it pursuant to article
74 of Law 19/1994 of 6th July on Special Tax Regime in the Canary Islands.

ELEVENTH.-: The Bank shall have the right to assign or novate its interest in
this Mortgage in accordance with the provisions of Clause 27 (Changes to the
Parties) of the Facility Agreement without the consent of the Mortgagor.

The Mortgagor is not allowed to assign this mortgage without the prior written
consent of the Bank.

<PAGE>

                                      143

TWELFTH.-: Any notification required in any enforcement procedure shall be
delivered to the following addresses:

-     The Bank
      Paseo de la Castellana, 51
      28046, Madrid
      Spain

      Facsimile: +34 91 319 2900
      Attention: Michael Hernan

-     The Mortgagor
      c/o Musgo n degrees 5
      2 degrees Plta
      LA FLORIDA
      28023, Madrid

      Facsimile: +34 91 307 7043
      Attention: Andres Luna

THIRTEENTH: This Mortgage shall be governed by Spanish law and by the relevant
international treaties under which Spain is a party, specially by the Convention
of Brussels on Unification of Rules Related to Ship Mortgages dated 27th May,
1967.

So it is said and accepted by the appearers in their capacity as they act, whom
I orally admonish about the legal implications.

After reading this notarial deed, the appearers agree to it, approve it, ratify
it and sign with me, the Notary.

[EXECUTION PROVISIONS TO BE COMPLETED BY THE MADRID NOTARY]

<PAGE>

                                      144

NUMBER [...]

                                   APPENDIX B

                                     PART II

                      NOTARIAL DEED OF MORTGAGE OVER VESSEL

                               [AIE SWAP MORTGAGE]
         [TO BE AMENDED BY A & O MADRID FOLLOWING AGREEMENT OF SWAP BANK
                            MORTGAGE AMENDMENT DEED]

In Madrid, my residence, on the ______________________, 200[ ]

Before me, ............................, Notary Public of Madrid and of its Bar.

                                     APPEAR

OF ONE PART,

Mr........., of legal age, [single/married], [profession], nationality with
domicile in ..............., holder of [Spanish identity card/passport] number
.........

ON THE SECOND PART,

Mr........., of legal age, [single/married], [profession], nationality, with
domicile in ..............., holder of [Spanish identity card/passport] number
.........

                                     WHO ACT

The first one, on behalf of [A.I.E. INSERT FULL NAME], (hereinafter the
"MORTGAGOR"), with registered address at [INSERT ADDRESS], and registered in the
Mercantile Registry of [.........] at Volume [......], Book, Sheet [........]
and with Tax Identity Number C.I.F. [INSERT NUMBER] [in conformity with a
resolution of its Board of Directors of _________________ ] or [as director of
the company duly appointed on ______________] or [pursuant to the powers of
attorney granted to him in a deed executed before the Notary Public of
______________, Mr._____________________].

And the second one, on behalf of each of:

1.    J.P. MORGAN BANK S.A. with registered address at Gran Via, 17, Bilabo,
      Spain and registered in the Mercantile Registry of Vizcaya at Volume 869
      Book 163 and Sheet B1-13139 and with Tax Identity Number C.I.F. [INSERT
      NO.] in its capacity as Spanish Security Agent (hereinafter the "SPANISH
      SECURITY AGENT"), pursuant to a power of attorney granted to him in a deed
      executed before the Notary Public of ______________,
      Mr._____________________];

<PAGE>

                                      145

2.    [INSERT DETAILS OF APPROPRIATE SWAP BANK], in its capacity as a Swap Bank
      (hereinafter, the "BANK"), with [company registration][corporate] number
      [INSERT NUMBER]. The Bank is a company validly incorporated and duly
      existing under the laws of [INSERT LAW], pursuant to a power of attorney
      granted to him in a deed executed before the Notary Public of ________ ,
      Mr.______________________.

The appearers have, in my opinion, as they act full legal authority to execute
this notarial deed of vessel mortgage.

                                     WHEREAS

I.    The Mortgagor has agreed with NAVIERA TEEKAY GAS IV S.L., (hereinafter the
      "BUYER"), with registered address at C/Musgo n degrees 5, 2 degrees
      Plta., LA FLORIDA 28023, Madrid to supply a liquid natural gas carrier
      more particularly described in Clause 3 below to the Buyer under the
      document described below.

II.   The Vessel has been constructed by IZAR CONSTRUCCIONES NAVALES, S.A.
      (hereinafter the "BUILDER") in accordance with a shipbuilding contract
      dated [INSERT DATE], 2000 as amended and restated on [INSERT DATE],
      December, 2001 between Superapply Limited (the "SPC") and the Builder and
      as novated in favour of the Mortgagor pursuant to a novation agreement
      dated [INSERT DATE] between the Builder, the SPC and the Mortgagor (the
      "SHIPBUILDING CONTRACT").

III.  The Mortgagor will supply the Vessel to the Buyer pursuant to a bareboat
      charter between the Mortgagor and the Buyer dated [INSERT DATE] (the
      "BAREBOAT CHARTER").

IV.   The Buyer has made instalment payments to the Mortgagor in accordance with
      a schedule of payments annexed to the Bareboat Charter which total euro
      160,000,000.

V.    The Buyer and the Bank have entered into a an interest rate swap
      transaction dated [INSERT DATE] the "TRANSACTION") which is governed by,
      supplements and forms part of an ISDA Master Agreement between the
      Mortgagor and the Bank dated as of [INSERT DATE] (the "ISDA" and together
      with the Transaction, the "SWAP AGREEMENT").

VI.   The Mortgagor is the registered owner of the vessel described in Clause 3.

VII.  In consideration of the foregoing, the appearers agree to grant this
      notarial deed of Vessel Mortgage as security for the full satisfaction and
      repayment of all present and future obligations and liabilities of the
      Buyer under the Swap Agreement described in Recital V which shall be
      governed by the following:

                                     CLAUSES

FIRST .- MORTGAGE.- The Mortgagor CREATES A MORTGAGE with equal ranking to:

1.    the vessel mortgage granted before me [INSERT DETAILS OF THE SPANISH
      NOTARY PUBLIC] at the date hereof in favour of the Banks (as defined in
      the credit facility agreement dated [INSERT DATE], between, inter alia,
      the Buyer and the Spanish Security Agent (the "FACILITY AGREEMENT") to
      secure the payment obligations of the Buyer under the Facility Agreement;

<PAGE>

                                      146

2.    the vessel mortgage granted before me [INSERT DETAILS OF THE SPANISH
      NOTARY PUBLIC] at the date hereof in favour of [INSERT NAME OF APPROPRIATE
      SWAP BANK] to secure the payment obligations of the Mortgagor under a swap
      agreement with [INSERT NAME OF APPROPRIATE SWAP BANK];

3.    the vessel mortgage granted before me [INSERT DETAILS OF THE SPANISH
      NOTARY PUBLIC] at the date hereof in favour of [INSERT NAME OF APPROPRIATE
      SWAP BANK] to secure the payment obligations of the Mortgagor under a swap
      agreement with [INSERT NAME OF APPROPRIATE SWAP BANK];]

in favour of the Bank as creditor under the Swap Agreement, which accepts it,
over the vessel described in clause 3 (hereinafter, the "VESSEL") as security
for the payment of the Secured Liabilities for an amount of principal euro
[COMPLETE WHEN DETAILS OF RELEVANT SWAP BANK'S SWAP COMMITMENT IS ASCERTAINED -
I.E. THE PROPORTION OF TOTAL AMOUNT OF THE SWAP (E185MILLION) TAKEN BY SWAP
BANK (THE "MORTGAGE VALUE")], for any interest accrued at the Interest Rate (as
defined in the Facility Agreement) during the term of 24 months up to a maximum
amount pursuant to Art. 10 of the Ship Mortgage Law of euro [INSERT 10% OF
MORTGAGE VALUE], for any default interest accrued at the Default Rate (as
defined in the Facility Agreement) during the term of 24 months for a maximum
pursuant to Art. 10 of the Ship Mortgage Law of euro [INSERT 20% OF MORTGAGE
VALUE], for the repayment of the legal costs and expenses from the eventual
judicial or extrajudicial enforcement of the mortgage up to a maximum of euro
[INSERT 5% OF MORTGAGE VALUE] and any costs in relation to the effectiveness of
the guarantee and conservation of the Vessel such as, inter alia, the payment of
taxes over the Vessel and the ownership maintenance fees and insurance premium
for the Vessel up to a maximum of euro [INSERT 5% OF MORTGAGE VALUE].

For the purpose of the provisions of Articles 571 and seq. of Law 1/2000 of 7th
January, 2000, it is expressly agreed by the parties that the determination of
the debt able to be claimed in executive proceedings shall be carried out by a
certificate issued by the Bank which evidences the balance of the account or
accounts of the Mortgagor. By virtue of the foregoing, the presentation of this
deed duly notarised and of the notarial record which incorporates the
certificate, as issued by the Bank, of the balance shown in the account of the
Mortgagor, evidencing that the determination of the debt has been carried out in
the manner stipulated in this deed by the parties and that the balance coincides
with the one which appears in the account or accounts of the Mortgagor, shall be
sufficient in order to exercise the executive proceedings.

It is hereby expressly agreed that the balance of each such account shall be
considered as an acknowledgement of debt due by the Mortgagor to the Bank, and
may be claimed pursuant to Clause Fifth.

Consequently, it is hereby expressly agreed that the Secured Liabilities amount
to euro [INSERT 140% OF MORTGAGE VALUE].

The mortgage granted in this deed shall remain in full force and effect until
the Bank is satisfied that any and all Secured Liabilities have been
unconditionally and irrevocably paid and discharged in full.

SECOND.- The mortgage will extend to all chattels, rents, issues, profits,
indemnities, time charters and other ancillary elements expressed in article 7
of the Ship Mortgage Law, including any improvements or new equipment that may
be incorporated.

The extension of the mortgage to the aforesaid goods may be waived by the Bank
when requesting the public auction of the Vessel before the Court which deals
with the proceedings.

<PAGE>

                                      147

The mortgage shall be expressly extended to the indemnities raised from
insurance from time to time which belongs to the Vessel as well as to the
premiums which may be paid by the Bank pursuant to Clause Fourth paragraph (c)
below.

The parties instruct the notary public to notify to the relevant insurance
company [INSERT DETAILS IF KNOWN] of the existence of this mortgage over the
Vessel through a Notary conduct ("conducto notarial") in accordance with Article
40 of the Spanish law on Insurance Contract.

THIRD.-

[DESCRIPTION OF THE MORTGAGED VESSEL]

[TITLE]

[REGISTERED]

[CHARGES]

[DETAILS ON INSURANCE POLICIES]

The Vessel has been valued at euro [INSERT AMOUNT - TO BE PROVIDED BY APPROVED
VALUER (AS DEFINED IN THE FACILITY AGREEMENT) AT THE TIME OF DELIVERY OF THE
VESSEL].

If the above valuation of the Vessel would be disproportionate to its market
value at the time of enforcement of this notarial deed, the Bank will be
entitled to request a second valuation of an independent expert who will be
appointed by the Directorate General of the Merchant Marine or such equivalent
administrative body which replaced it.

The parties agree that the higher of both valuations of the Vessel shall be used
as the rate for enforcement purposes.

FOURTH.- From the date hereof and whilst any obligations arising from this deed
have not been completely settled, the Mortgagor undertakes, in addition and
without prejudice to the covenants contained in the Swap Agreement:

(a)   to maintain the Vessel in good repair and working condition and to effect
      in the Vessel, any ordinary and extraordinary repairs that would be
      necessary to maintain its value and operation, notifying the Bank of any
      damage or loss suffered by the Vessel;

(b)   to pay contributions, taxes, wages, salaries and social contributions of
      the crew, local taxes and other legitimate expenses that it should pay
      levied on the Vessel or on this mortgage, providing to the Bank any
      receipt issued for such payments if it so requires;

(c)   to insure and maintain insured the Vessel against the risk of fire,
      damages and loss, lightening, explosion and other similar risks for the
      duration of the security, in an insurance company of notorious solvency
      and to pay promptly all the insurance premiums. The Mortgagor undertakes
      from time to time at the request of the Bank to forward to the Bank
      evidence that the relevant premiums have been duly paid;

<PAGE>

                                      148

      Neither the insured amount nor any insurance policy can be modified
      without the prior written consent of the Bank. The Bank is expressly
      authorised to pay the insurance premiums on behalf of the Mortgagor if any
      insurance policy is terminated for any cause and has not been replaced by
      another insurance policy on substantially the same terms;

(d)   to keep the certificate of ownership of the Vessel on board pursuant to
      Article 14 of the Ship Mortgage Law;

(e)   generally, to comply with the terms and conditions established in the
      Facility Agreement;

(f)   not to sell or mortgage the Vessel without the prior written consent of
      the Bank); and

(g)   not to execute or enter into any type of transaction which implies any
      type of financial facilities or credit rights (the so called "prestamo a
      la gruesa") or credit with rights of retention of title which charge the
      Vessel and which are preferred to this mortgage in accordance with Article
      32 and seq. of the Ship Mortgage Law or by the Convention of Brussels on
      Unification of Rules Related to Ship Mortgages dated 27th May, 1967
      without the prior written consent of the Bank.

FIFTH.- The mortgage may be enforced by the Spanish Security Agent, at the
election of the Bank , following any of the proceedings available under the
Spanish Civil Procedural Law (Law 1/2/2000 of 7th January) and under mortgage
regulations and their related provisions subject to compliance, in each case,
with the provisions of Articles 41 to 44 of the Ship Mortgage Law, upon the
occurrence of any of the events of default listed below:

(a)   in any of the events of default set out in Swap Agreement, and in
      particular, default in the payment obligations of the Mortgagor;

(b)   the judicial request by the Mortgagor of suspension of payments or
      bankruptcy or the request of bankruptcy by a third party, or the inability
      of the Mortgagor to honour its obligations when due, or the proposal of
      any agreement in benefit of one or more of its creditors.

(c)   default by the Mortgagor of any of its obligations under this deed of
      first ranking mortgage, in particular of the payment of the insurance
      premiums;

(d)   if the Vessel is wrecked for sailing;

(e)   if the Vessel is disposed of without the prior written consent of the
      Bank, provided the Mortgagor has not made a deposit for an amount equal to
      the Secured Liabilities in the manner provided under articles 1177 and
      1180 of the Spanish Civil code. Any amounts due by the Mortgagor to the
      Bank will be claimed through a notary public prior to the enforcement of
      this Mortgage.

Pursuant to Article 48 of the Ship Mortgage Law this Deed may be enforced at the
election of the Spanish Security Agent (acting on the instructions of the Bank)
in any jurisdiction where the Vessel may be located, in the jurisdiction where
this Deed is executed, in the jurisdiction where this Deed is registered or, if
different, in the jurisdiction of the address of the Mortgagor.

From now on the Mortgagor expressly authorises the Bank to request, on their
own, the issue of a second and further copies of this notarial deed to the
effect of the provisions set out in paragraph 4 of Article 517 of the new Civil
Procedural Law (Law 1/2000 of 7th January). The Mortgagor provides

<PAGE>

                                      149

its consent so that any second or further copies of this notarial deed shall
have executive character and that this circumstance is mentioned in the
expedition note.

SIXTH.- If the Vessel is abandoned by the Mortgagor, the Bank will be entitled
to take "interim" possession to maintain the Vessel, adopting to such effect the
required actions to avoid the loss or damage of the Vessel, including its
displacement to any seaport or other place where the integrity of the Vessel is
guaranteed. The certificate of the relevant Marine authority informing the
abandonment, unjustified inactivity or other similar circumstances will be
sufficient to evidence the abandonment of the Vessel.

All the costs and expenses generated shall be borne by the Mortgagor.

SEVENTH .- The Mortgagor shall pay any expenses arising from the execution,
registration, cancellation and amendment of the mortgage created under this deed
(except the costs of amendments requested at the sole discretion of the Bank),
and those arising from the issue of a First Copy for the Bank, and those arising
from its registration in the Special Registry of Ships of the Canary Islands,
the release of the mortgage, and all taxes (including those that are levied
today or in the future). However, the costs of transferring the interest of the
Mortgagee in this Mortgage in accordance with Clause 11 below shall be borne by
the new mortgagee.

The Mortgagor will also pay all costs, expenses and damages due to the
non-compliance of this deed, including the fees of the lawyer and the court
agent, if the Bank has used its services, even if these were not legally
necessary.

EIGHTH .- The Mortgagor undertakes to execute bearing all costs, at the request
of the Bank, any further notarial deed of amendment ("Escritura de Rectificacion
o Subsanacion") that may be required in order to record this mortgage in the
Special Registry of Ships of the Canary Islands and to amend and complete any
defect indicated by the written or oral comments of the Registrar who examines
this deed.

For this purpose, the Mortgagor hereby appoints Mr. [INSERT CONTACT] and Mr.
[Eduardo Sebastian de Erice y Malo de Molina] and Mr. [MARIANO LOPEZ PEOAS], so
that any of them may grant as many notarial deeds of amendment as may be
required to record this mortgage in the Special Registry of Ships of the Canary
Islands and determine the content of such subsanation or rectification deed to
complete or correct any defect indicated by the Registrar which may prevent the
recording of the mortgage.

NINTH .- If in the examination of this deed, the Registrar opines that any
clause, provision, paragraph, subparagraph, line or mention in this deed is not
recordable, the parties expressly accept its opinion and hereby renounce to the
registration of such a clause, provision, paragraph, subparagraph, line or
mention, and specifically request the partial registration of this deed, so that
this deed is recorded and the mortgage is created.

TENTH.- The parties declare that the operation hereby formalised is not subject
to VAT and is subject to Stamp Duty Tax but exempted to it pursuant to article
74 of Law 19/1994 of 6th July on Special Tax Regime in the Canary Islands.

<PAGE>

                                      150

ELEVENTH.-: The Bank shall have the right to assign or novate its interest in
this Mortgage in accordance with the provisions of Clause 27 (Changes to the
Parties) of the Facility Agreement without the consent of the Mortgagor.

The Mortgagor is not allowed to assign this mortgage without the prior written
consent of the Bank.

TWELFTH.-: Any notification required in any enforcement procedure shall be
delivered to the following addresses:

-     The Bank
      Paseo de la Castellana, 51
      28046, Madrid
      Spain

      Facsimile: +34 91 319 2900
      Attention: Michael Hernan

-     The Mortgagor
      c/o Musgo n degrees 5
      2 degrees Plta
      LA FLORIDA
      28023, Madrid

      Facsimile: +34 91 307 7043
      Attention: Andres Luna

THIRTEENTH: This Mortgage shall be governed by Spanish law and by the relevant
international treaties under which Spain is a party, specially by the Convention
of Brussels on Unification of Rules Related to Ship Mortgages dated 27th May,
1967.

So it is said and accepted by the appearers in their capacity as they act, whom
I orally admonish about the legal implications.

After reading this notarial deed, the appearers agree to it, approve it, ratify
it and sign with me, the Notary.

[EXECUTION PROVISIONS TO BE COMPLETED BY THE MADRID NOTARY]

<PAGE>

                                    AGREEMENT

                             DATED 21 December, 2001

                                  E180,000,000

                                 CREDIT FACILITY

                           NAVIERA TEEKAY GAS IV S.L.

                                   as Borrower

                  THE SEVERAL BANKS AND FINANCIAL INSTITUTIONS

                                    as Banks

                           J.P. MORGAN EUROPE LIMITED

                                    as Agent

                              J.P. MORGAN BANK S.A.

                            as Spanish Security Agent

                                       and

                            JPMORGAN CHASE BANK, N.A.

                       COMMERZBANK AKTIENGESELLSCHAFT, and

                                     CALYON

                                  as Swap Banks

                                 as arranged by

                                J. P. MORGAN plc

                                  ALLEN & OVERY
                                ALLEN & OVERY LLP
                                     LONDON

<PAGE>

                                      INDEX

<TABLE>
<CAPTION>
CLAUSE                                                                                                        PAGE
<S>                                                                                                           <C>
1.       Interpretation......................................................................................   1
2.       The Facility........................................................................................  23
3.       Purpose.............................................................................................  24
4.       Conditions Precedent................................................................................  24
5.       Drawdown............................................................................................  26
6.       Repayment...........................................................................................  26
7.       Prepayment and Cancellation.........................................................................  27
8.       Interest Periods....................................................................................  28
9.       Interest............................................................................................  29
10.      Payments............................................................................................  30
11.      Taxes...............................................................................................  32
12.      Market Disruption...................................................................................  34
13.      Increased Costs.....................................................................................  35
14.      Illegality..........................................................................................  36
15.      Mitigation..........................................................................................  36
16.      Representations and Warranties......................................................................  37
17.      Undertakings........................................................................................  42
18.      Valuation...........................................................................................  62
19.      Default.............................................................................................  63
20.      The Agent and the Finance Parties...................................................................  67
21.      Fees................................................................................................  75
22.      Expenses............................................................................................  75
23.      Stamp Duties........................................................................................  76
24.      Indemnities.........................................................................................  76
25.      Evidence and Calculations...........................................................................  80
26.      Amendments and Waivers..............................................................................  80
27.      Changes to the Parties..............................................................................  81
28.      Disclosure of Information...........................................................................  85
29.      Set-off.............................................................................................  85
30.      Pro Rata Sharing....................................................................................  85
31.      Severability........................................................................................  86
32.      Counterparts........................................................................................  87
33.      Notices.............................................................................................  87
34.      Language............................................................................................  88
35.      Jurisdiction........................................................................................  89
36.      Governing Law.......................................................................................  91

SCHEDULE

1.       Banks and Commitments...............................................................................  92
2.       Part I - Stage One Initial Conditions Precedent Documents...........................................  93
         Part II - Stage Two Initial Conditions Precedent Documents                                            97
3.       Delivery Date Conditions Precedent Documents........................................................ 100
4.       Form of Request..................................................................................... 104
5.       Form of Novation Certificate........................................................................ 105
6.       Calculation of the Mandatory Cost................................................................... 106
7.       Repayment Schedule.................................................................................. 107
</TABLE>

<PAGE>

<TABLE>
<S>                                                                                                           <C>
8.       Form of Compliance Certificate...................................................................... 109
9.       Form of Bank's Power of Attorney.................................................................... 111
10.      Form of Deed of Assignment of Interest.............................................................. 114
11.      Form of Deed of Accession of Swap Bank.............................................................. 117

SIGNATORIES.................................................................................................. 118

NUMBER [...]................................................................................................. 121
Appendix A        Part I - Notarial Deed of Mortgage Over Vessel............................................. 121
Appendix A        Part II - Notarial Deed of Mortgage Over Vessel............................................ 129
NUMBER [...]................................................................................................. 137
Appendix B Part I - Notarial Deed of Mortgage Over Vessel.................................................... 137
NUMBER [...]................................................................................................. 144
Appendix B Part II - Notarial Deed of Mortgage Over Vessel................................................... 144
</TABLE>