<PAGE>

                                                                   EXHIBIT 10.14









                             Date November [o], 2005





                           TEEKAY SHIPPING CORPORATION



                                       and



                            TEEKAY LNG PARTNERS L.P.





           ---------------------------------------------------------

                               PURCHASE AGREEMENT

           ---------------------------------------------------------

                                   RELATING TO
                            THE SALE AND PURCHASE OF
      THE ENTIRE OWNERSHIP INTEREST IN, AND ALL PROMISSORY NOTES ISSUED BY,


                             AFRICAN SPIRIT L.L.C.,

                               ASIAN SPIRIT L.L.C.

                                       AND

                             EUROPEAN SPIRIT L.L.C.





<PAGE>


                                      INDEX

<TABLE>
<CAPTION>
CLAUSE                                                                      PAGE
<C>                                                                         <C>
1        DEFINITIONS AND INTERPRETATION                                       1


2        AGREEMENT FOR SALE                                                   4


3        CONSIDERATION                                                        4


4        COMPLETION                                                           5


5        WARRANTIES                                                           7


6        REMEDIES OF THE PURCHASER                                            8


7        IMPLEMENTATION                                                      11


8        COSTS                                                               11


9        OTHER PROVISIONS                                                    11


10       NOTICES                                                             13


11       GOVERNING LAW AND JURISDICTION                                      14


12       TERMINATION                                                         14


SCHEDULE A  WARRANTIES AND REPRESENTATIONS                                  A-1


SCHEDULE B  VESSELS                                                         B-1

</TABLE>
                                       i







<PAGE>

THIS AGREEMENT is made on November [o], 2005

BETWEEN:

(1)      TEEKAY SHIPPING CORPORATION, a Marshall Islands company having a
         principal office at TK House, Bayside Executive Park, West Bay Street &
         Blake Road, P.O. Box AP-59212, Nassau, Bahamas (the "VENDOR"); and

(2)      TEEKAY LNG PARTNERS L.P., a Marshall Islands limited partnership with
         its general partner, Teekay GP L.L.C., having a principal office at TK
         House, Bayside Executive Park, West Bay Street & Blake Road, P.O. Box
         AP-59212, Nassau, Bahamas (the "PURCHASER")

WHEREAS:

(A)      The Vendor is the legal and beneficial owner of 100% of the limited
         liability interests of each of African Spirit L.L.C., Asian Spirit
         L.L.C. and European Spirit L.L.C., each a limited liability company
         formed under the laws of the Republic of the Marshall Islands with a
         registered office at Trust Company Complex, Ajeltake Road, Ajeltake
         Island, Majuro, Marshall Islands MH96960 and a principal office c/o
         Teekay Shipping Corporation, TK House, Bayside Executive Park, West Bay
         Street & Blake Road, P.O. Box AP-59212, Nassau, Bahamas (collectively,
         the "COMPANIES"), comprising 100% of the entire issued equity interests
         of the Companies (collectively, the "INTERESTS").

(B)      The Vendor is the holder of three demand promissory notes, each dated
         November ___, 2005 and issued by one of the Companies in an amount of
         US$48,333,333.33 (US$145,000,000.00 in the aggregate) with a term of
         ten years and interest accruing thereon at an annual rate of 7.065 per
         cent (collectively, the "NOTES").

(C)      The Vendor has agreed to sell, and the Purchaser has agreed to
         purchase, the Interests and the Notes, on and subject to the terms and
         conditions hereinafter appearing.

IT IS AGREED as follows:

1        DEFINITIONS AND INTERPRETATION

1.1      DEFINITIONS. In this Agreement, including the Schedules and the
         recitals, unless the context requires otherwise:

         "ASSETS" means, collectively, the Interests and the Notes;

         "BUSINESS DAY" means a day (other than a Saturday or Sunday) on which
         banks in New York are open for the transaction of normal banking
         business (other than solely for trading and settlement in Dollars) or,
         for the purposes of Clause 10, a day on which banks are open for the
         transaction of normal banking business in the country of receipt of a
         notice;

         "BUSINESS INFORMATION" means all information and records (in whatever
         form held and whether commercial, financial, technical or otherwise)
         relating to the Companies or the business or activities or affairs of
         the Companies, which can be reasonably considered to be confidential to
         the Companies;

         "CLAIM" means a claim for breach of Warranty by the Purchaser against
         the Vendor;


                                       1
<PAGE>


         "CLOSING" means completion of the sale and purchase of the Assets in
         accordance with Clause 4.1;

         "CLOSING DATE" means the day the Offering closes;

         "COMPANIES" has the meaning ascribed in recital (A) of this Agreement.

         "CONSIDERATION" means the consideration payable by the Purchaser for
         the Assets as stated in Clause 3;

         "CONTRACTS" means those agreements, contracts, understandings and
         arrangements to which any of the Companies is a party or to which any
         of the Assets, the Vessels or any other assets of the Companies are
         subject or by which they are bound which are material to any of the
         Companies or its trading activities, set out in Section 3.1 of the
         Disclosure Schedule;

         "COVERED ENVIRONMENTAL LOSSES" means all environmental and toxic tort
         Losses and Expenses suffered or incurred by the Purchaser, the
         Purchaser Group Companies or the Companies by reason of or arising out
         of:

         (a) any violation or correction of violation of Environmental Laws; or

         (b) any event or condition associated with ownership or operation by
         the Vendor or the Vendor Group Companies of the Assets (including,
         without limitation, the presence of Hazardous Substances on, under,
         about or migrating to or from the Assets or the disposal or release of
         Hazardous Substances generated by operation of the Assets), including,
         without limitation, (i) the cost and expense of any investigation,
         assessment, evaluation, monitoring, containment, cleanup, repair,
         restoration, remediation or other corrective action required or
         necessary under Environmental Laws, (ii) the cost or expense of the
         preparation and implementation of any closure, remedial, corrective
         action or other plans required or necessary under Environmental Laws
         and (iii) the cost and expense for any environmental or toxic tort
         pre-trial, trial or appellate legal or litigation support work;

         but only to the extent that such violation complained of under clause
         (a), or such events or conditions included in clause (b), occurred
         before the Closing Date; and, provided that, in no event shall Losses
         or Expenses to the extent arising from a change in any Environmental
         Law after the Closing Date be deemed "Covered Environmental Losses."

         "CREDIT FACILITY COMMITMENT" has the meaning ascribed in Clause 3.2(c);

         "DISCLOSED" means fully, fairly and expressly disclosed by the
         Transaction Documents or the Disclosure Schedule and, for this purpose
         "fairly disclosed" means any information disclosed in such manner and
         in such detail or with sufficient explanation as to enable a reasonable
         purchaser to make an informed assessment or estimation of the matter
         concerned and its financial, operational or other consequences to the
         Companies;

         "DISCLOSURE SCHEDULE" means the Disclosure Schedule provided to
         Purchaser by Vender concurrently with the execution and delivery of
         this Agreement;

         "DOLLARS" means United States Dollars;



                                       2
<PAGE>

         "ENVIRONMENTAL LAWS" means all federal, state, foreign and local laws,
         statutes, rules, regulations, orders, judgments and ordinances relating
         to protection of health and safety and the environment, each as amended
         through the Closing Date.

         "HAZARDOUS SUBSTANCES" means (a) substances which contain substances
         defined in or regulated under applicable Environmental Laws; (b)
         petroleum and petroleum products, including crude oil and any fractions
         thereof; (c) natural gas, synthetic gas and any mixtures thereof; (d)
         any substances with respect to which a federal, state, foreign or local
         agency requires environmental investigation, monitoring, reporting or
         remediation; (e) any hazardous waste or solid waste, within the meaning
         of any Environmental Law; (f) any solid, hazardous, dangerous or toxic
         chemical, material, waste or substance, within the meaning of and
         regulated by any Environmental Law; (g) any radioactive material; and
         (h) any asbestos-containing materials that represent a health hazard.

         "INDEBTEDNESS" means any borrowings or other indebtedness whatsoever
         owed by the Companies;

         "INTERESTS" has the meaning ascribed in recital (A) of this Agreement.

         "INSOLVENCY EVENT" means in relation to any of the Purchaser, the
         Vendor or the Companies (as the context may require) that any of the
         following actions has occurred in relation to it:

         (i) an order has been made or an effective resolution passed or other
         proceedings or actions taken (including, without limitation, the
         presentation of a petition) with a view to its administration,
         bankruptcy, winding-up, liquidation or dissolution; or

         (ii) it has had a receiver, administrative receiver, manager or
         administrator appointed over all or any substantial part of its
         undertaking or assets; or

         (iii) any event has occurred or situation arisen in any jurisdiction
         that has a substantially similar effect to any of the foregoing;

         "LOSSES AND EXPENSES" means liabilities, losses, damages, claims,
         demands, awards and expenses (including, without limitation, legal
         costs) and includes, for the avoidance of doubt, any value added tax
         (VAT) (or similar tax) payable in relation to any such matter,
         circumstance or item (except to the extent that the party claiming
         Losses and Expenses obtains credit for such VAT as input tax);

         "NOTES" has the meaning ascribed in recital (B) of this Agreement;

         "OFFERING" means an underwritten public offering of limited partnership
         units for which Purchaser has filed a registration statement on Form
         F-1 with the U.S. Securities and Exchange Commission on November 2,
         2005;

         "OPTION" has the meaning ascribed in Clause 3.1;

         "PURCHASER GROUP COMPANIES" means the Purchaser and any subsidiaries
         thereof and the Purchaser's general partner;

         SECURITY INTEREST" means any mortgage, charge (whether fixed or
         floating), pledge, lien, hypothecation, encumbrance, assignment, right
         of set-off, trust arrangement, title



                                       3
<PAGE>

         retention or other security interest or other agreement or arrangement
         of any kind having the effect of conferring security;

         "SPECIFIED RATE" is the rate of interest equal to yearly LIBOR from
         time to time plus 100 basis points;

         "TAX" or "TAXATION" means any tax, duty, contribution, impost, levy or
         charge in the nature of tax, whether domestic or foreign, and any fine,
         penalty, surcharge or interest in relation thereto, including without
         limitation (and without prejudice to the foregoing) corporation tax,
         income tax (including tax failing to be deducted or withheld from or
         accounted for in respect of any payment), capital gains tax, value
         added tax, customs excise and import duties, stamp duty, stamp duty
         reserve tax, and any other payment whatsoever that the Companies are or
         may be or become bound to make to any person and that is or purports to
         be in the nature of taxation or otherwise by reason of any taxation
         statutes;

         "TAXATION AUTHORITY" means any national, local municipal, governmental,
         state, federal or fiscal, revenue, customs or excise authority, body,
         agency or official anywhere in the world having, or purporting to have
         power or authority in relation to Tax;

         "TRANSACTION DOCUMENTS" means this Agreement and the other documents
         delivered at Closing pursuant to Clause 4;

         "VENDOR'S ACCOUNT" means such account of the Vendor as the Vendor may
         specify to the Purchaser from time to time;

         "VENDOR GROUP COMPANIES" means the Vendor and any subsidiary of the
         Vendor, from time to time (except, with effect from Closing, the
         Companies and any Purchaser Group Companies);

         "VESSELS" means the Suezmax tankers of the Companies set forth on
         Schedule B attached hereto; and

         "WARRANTIES" means the representations and warranties set out in Clause
         5.1 and Schedule A.

2        AGREEMENT FOR SALE

2.1      SALE AND PURCHASE OF ASSETS. Subject to the other provisions of this
         Agreement, the Vendor shall sell the Assets to the Purchaser and the
         Purchaser shall purchase the Assets.

2.2      ABSOLUTE TITLE TO ASSETS; NO SECURITY INTEREST IN ASSETS. The Vendor
         shall take all steps within its power and control (but without any
         obligation to expend any material amount) to procure that the Purchaser
         will duly obtain absolute title to the entire legal and beneficial
         interest in all the Assets, and all rights (whether in respect of
         distributions, voting or otherwise) that at the date of this Agreement
         or any later time are conferred on or by any of the Assets, free from
         any Security Interest.

3        CONSIDERATION

3.1      PAYMENT OF CONSIDERATION. The Consideration shall be the sum of
         US$180,000,000.00 (One Hundred and Eighty Million United States
         Dollars), of which



                                       4
<PAGE>

         US$180,000,000.00 shall be payable in cash, which amount shall be
         allocated as follows:

(a)      US$180,050,000.00, which shall be allocated amongst the Interests and
         the Notes as follows:

         (i)      US$11,683,333.33 for the Interests relating to each of the
                  Companies (US$35,050,000.00 in the aggregate); and

         (ii)     US$48,333,333.33 for each Note (US$145,000,000.00 in the
                  aggregate); less

(b)      US$50,000.00, which shall be payable by the grant by the Purchaser to
         the Vendor of an option (the "Option") to enter into time charter
         contracts with each of the Companies for the charter of the Vessels
         upon the same terms and conditions as the time charter contracts to
         which the Vessels are currently subject, for whatever period such
         current time charter parties are not extended in accordance with their
         terms (being a maximum of six (6) years), provided however, the Option
         shall be exercisable to extend the charter term for up to two,
         three-year extensions (or for whatever lesser remaining amount of the
         extension is then available), and further provided that the income
         derived by the Companies therefrom would not cause over 10% of the
         Purchaser's consolidated income to fail to qualify as qualifying income
         within the meaning of Section 7704(d)(1)(E) of the United States
         Internal Revenue Code of 1986, as amended.

3.2      VENDOR'S UNDERTAKINGS. In addition to the transfer of the Assets to the
         Purchaser, the Vendor further undertakes as follows:

(a)      that on Closing, it shall procure that the Companies shall have no net
         liabilities (excluding indebtedness evidenced by the Notes;]

(b)      that during the period between the date of this Agreement and the
         Closing Date, it shall procure that there is provided to the Purchaser
         copies of all correspondence with any third parties in relation to the
         Assets, the Vessels, the Contracts or otherwise which may have a
         material impact on the assets, liabilities or trading results of the
         Companies taken as a whole;

(c)      that prior to the Closing Date, it shall use commercially reasonable
         efforts (but without any obligation to expend any material amount) to
         secure from reputable lenders a written commitment, subject to terms
         and conditions reasonably acceptable to the Purchaser, to provide to
         the Companies a secured revolving, reducing credit facility in the
         amount of approximately US$137,500,000 with an interest rate equal to
         LIBOR plus 50 basis points (the "CREDIT FACILITY COMMITMENT"); and

(d)      following the Closing Date and upon receiving any notices,
         correspondence, information or enquiries in relation to the Companies,
         the Assets, the Vessels or the Contracts, it shall forthwith pass
         copies thereof to the Purchaser and shall hold in trust for the
         relevant Company and account forthwith for any monies received after
         the Closing Date on account of that Company.

4        COMPLETION

4.1      TIMING AND PLACE OF CLOSING. Subject to the completion of the closing
         of the Offering and to the provisions of this Agreement, Closing shall
         be effected by the Vendor satisfying its obligations under Clauses 4.2
         and by the Purchaser satisfying its



                                       5
<PAGE>

         obligations under Clause 4.3 and shall take place on the Closing Date
         immediately following the closing of the Offering.

4.2      VENDOR'S CLOSING OBLIGATIONS. The Vendor shall deliver or procure that
         there are delivered to the Purchaser on or before the Closing Date (as
         the context may permit):

(a)      duly executed transfers in respect of the Interests and the Notes in
         favour of the Purchaser, or as it may direct;

(b)      the certificates, if any, for the Interests (or an indemnity in the
         approved form for any lost certificates) and originals of the Notes;

(c)      a certified copy of the minutes of a meeting of the directors of the
         Vendor (certified as at the date of Closing to be a certified copy of
         such resolutions in full force and effect and certifying that such
         resolutions have not been revoked), authorising the execution of the
         Transaction Documents (to which it is party) and the performance by
         Vendor of its obligations thereunder;

(d)      all statutory and minute books (in every case written up to, but not
         including, the Closing Date), common seals, certificates of formation,
         certificates of amendment, cheque books, bank mandates and other books
         and records (whether statutory, financial or otherwise) of the
         Companies, and all certificates and documents of title relating to any
         investments of the Companies;

(e)      the original copies of the Contracts and of the Credit Facility
         Commitment;

(f)      evidence satisfactory to the Purchaser that all amounts payable by any
         of the Companies under any loan facilities made available by the Vendor
         (other than with respect to the Notes or any other amounts disclosed as
         liabilities in the Disclosure Schedule), any bank, financial
         institution, or any other person whether on the basis of any Security
         Interest provided by the Companies, and whether in relation to the
         Vessels or otherwise, have been paid in full and all associated
         Security Interests (including, without limitation, those identified in
         the Disclosure Schedule) and any other agreements or obligations
         entered into by the Companies for the benefit of itself or any other
         person have been terminated or released and, in relation to Security
         Interests, reassigned to the Companies or to the person giving the
         same; and

(g)      the duly executed certificate of an officer of the Vendor dated on the
         Closing Date, in form reasonably acceptable to the Purchaser,
         certifying on behalf of the Vendor to the accuracy of representations
         and Warranties of the Vendor contained in this Agreement.

4.3      PURCHASER'S CLOSING OBLIGATIONS. The Purchaser shall on Closing and
         subject to the transfer of the Assets:

(a)      deliver or procure that there are delivered to the Vendor a certified
         copy of the minutes of a meeting of the directors of its general
         partner, authorising the execution of this Agreement and any other
         Transaction Document that it is to execute pursuant to this Agreement;

(b)      pay to the Vendor the cash portion of the Consideration by transferring
         such amount to the Vendor's Account for value on the Closing Date; and

(c)      deliver to the Vendor deeds of option executed by each of the Companies
         and the Vendor evidencing the Option.



                                       6
<PAGE>

4.4      CLOSING OBLIGATIONS NOT FULFILLED. If either party fails, for any
         reason, to comply with any of its obligations under the foregoing
         provisions of this Clause 4, the other party may, at its option:

(a)      by written notice to the first party defer the date for Closing by one
         or more periods that shall not exceed 20 (twenty) Business Days in
         aggregate in respect of either all of the parties' obligations under
         the foregoing provisions of this Clause 4 or such of those obligations
         that have not been complied with; or

(b)      proceed to Closing so far as practicable but without prejudice to the
         second party's rights (whether under this Agreement or the general law)
         as regards the obligations with which the first party has not complied;
         or

(c)      waive all or any of the obligations in question of the first party.

4.5      DEFERRED CLOSING. If Closing is deferred to another date in accordance
         with Clause 4.4(a), and Closing is effected, the provisions of this
         Agreement shall apply as if that other date were the Closing Date.

5        WARRANTIES

5.1      GENERAL. The Vendor represents, warrants and undertakes, subject to
         Clause 5.8, that each statement in Schedule A is at the date of this
         Agreement, and will (save as disclosed in writing not later than the
         time of Closing) at the Closing Date remain, true, accurate and not
         misleading in any respect on the basis that a reference to the Closing
         Date were substituted for any express or implied reference to the date
         of this Agreement in that Schedule.

5.2      CLAIMS. The Vendor hereby unconditionally and irrevocably covenants
         with the Purchaser that, subject always to the limitations set out in
         Clause 6, it will indemnify the Purchaser and the Companies against all
         Losses and Expenses that any of the Purchaser Group Companies or the
         Companies may suffer or incur or pay in enforcing its rights in
         connection with any matter referred to in this Agreement or any of the
         Transaction Documents including, without limitation:

         (i)      the disputing and/or settlement of any Claims and any steps
                  taken to avoid and advice sought in connection with any
                  actual, threatened or anticipated Claims;

         (ii)     any legal proceedings in which any of the Purchaser Group
                  Companies or the Companies makes a Claim; and

         (iii)    the enforcement of any such settlement or judgement.

5.3      RELIANCE ON WARRANTIES. The Vendor acknowledges that:

(a)      the Purchaser has been induced to enter and is entering into this
         Agreement and the other Transaction Documents on the basis of and in
         reliance upon the Warranties;

(b)      the Purchaser may rely on the Warranties to the exclusion of any other
         information, and that, with the exception of matters set forth in the
         Disclosure Schedule, the Purchaser's rights in respect thereof will not
         be in any way impaired as a result of any other information being
         possessed by or available to any Purchaser Group Companies or any
         officer, employee, professional or financial adviser of, or person
         acting on behalf of, the Purchaser or any Purchaser Group Companies.



                                       7
<PAGE>

5.4      WARRANTIES ARE SEPARATE AND INDEPENDENT. Each Warranty shall be
         construed as a separate and independent warranty and, save as expressly
         provided otherwise, shall not be limited or restricted by reference to
         or inference from any other terms of this Agreement or any other
         Warranty.

5.5      REDUCTION IN CONSIDERATION. Any payments made by the Vendor to the
         Purchaser in respect of Claims shall, to the extent lawfully possible,
         be treated by the parties as a reduction in the Consideration;
         provided, however, that this Clause 5.5 shall not in any way limit or
         restrict the amount recoverable by the Purchaser or any other person
         under this agreement to the amount of the Consideration or any other
         amount (but this is without prejudice to the limitations set out in
         Clause 6).

5.6      AWARENESS OF VENDOR AND ORDINARY COURSE OF BUSINESS. Where any Warranty
         is qualified by reference to the awareness, knowledge, information or
         belief of the Vendor (or any similar expression), the Vendor shall be
         deemed to have such awareness, knowledge, information or belief as it
         would have after having made reasonable enquiry of the senior executive
         managers and officers of the Vendor. In relation to each of the
         Warranties concerning the assets, liabilities, Contracts, Vessels or
         results of any of the Companies, such Warranties shall be deemed to be
         qualified by reference to exclude any matters (whether or not
         Disclosed) arising in the ordinary and normal course of trading since
         September 30, 2005.

5.7      PROVISION OF INFORMATION. The Vendor undertakes promptly to provide the
         Purchaser with any information that the Purchaser may by written notice
         request in relation to:

(a)      any of the Warranties or any statement of fact contained elsewhere in
         this Agreement or any other Transaction Document; or

(b)      the Disclosure Schedule or any other disclosure made or information
         provided (or purportedly made or provided) under this Clause 5.7; or

(c)      any matter or question connected with or arising out of any of the
         foregoing,

         but this only applies to information that is (either at the date of the
         Agreement or at the date of the request) in the possession of the
         Vendor or that the Vendor or any of its professional advisers can
         reasonably be expected to obtain and present without undue efforts.

5.8      DISCLOSURE IN DISCLOSURE SCHEDULE. The Vendor shall not have any
         liability in respect of any Claim if and to the extent that any fact,
         matter or circumstance that causes any of the Warranties to be breached
         or that might result in a Claim or possible Claim has been Disclosed in
         the Disclosure Schedule or otherwise in any of the Transaction
         Documents.

5.9      NOTIFICATION OF POTENTIAL CLAIMS BEFORE CLOSING. If, at any time before
         Closing, the Vendor becomes aware of any Claim or any matter that could
         reasonably be expected to cause a Claim to arise or any matter that at
         Closing would constitute a Claim or could reasonably be expected to
         cause a Claim to arise, it shall forthwith disclose the same in writing
         to the Purchaser.

6        REMEDIES OF THE PURCHASER

6.1      SURVIVAL. Subject to the limitations and other provisions of this
         Agreement and the Transaction Documents, the representations and
         warranties of the Vendor contained in



                                       8
<PAGE>

         this Agreement (including the Schedules hereto), the Disclosure
         Schedule and the Transaction Documents shall survive the Closing and
         remain in full force and effect for a period of 12 months after the
         Closing Date; provided, however, that (a) the Warranties in Clauses 1.2
         (Title to Interests and the Notes), 1.3 (No arrangements relating to
         share capital), 11 (Taxation) and 12.1 (No brokers fees) of Schedule A
         to this Agreement shall survive until, and shall terminate upon, the
         date of expiration of the applicable statute of limitations with
         respect to the liability in question. The covenants and agreements of
         the Vendor contained in this Agreement and the Transactions Documents
         that by their terms extend beyond the Closing Date shall not terminate
         until all obligations with respect thereto have been performed or
         satisfied or shall have expired or been terminated in accordance with
         their terms.

6.2.     INDEMNIFICATION BY THE VENDOR

(a)      The Vendor agrees, subject to the other terms and conditions of this
         Agreement and the Transaction Documents, to indemnify the Purchaser
         against and hold it harmless from any and all (i) Losses and Expenses
         to the Purchaser, any Purchaser Group Company or the Companies arising
         out of or related to the breach of any representation, warranty,
         covenant or agreement of the Vendor in this Agreement (including the
         Schedules hereto), the Disclosure Schedule and the Transaction
         Documents, to the extent Vendor is notified by the Purchaser of such
         Losses or Expenses prior to expiration of the applicable survival
         period set forth in Clause 6.1 above, (ii) any Covered Environmental
         Losses relating to the Assets to the extent that the Vendor is notified
         by the Purchaser of any such Covered Environmental Losses within five
         (5) years after the Closing Date; (iii) Losses or Expenses to the
         Purchaser, the Purchaser Group Companies or the Companies arising from
         (A) the failure of the Purchaser Group Companies, immediately after the
         Closing Date, to be the owner of such ownership interests in and to the
         Assets as are necessary to enable the Purchaser Group Companies to own
         and operate the Assets in substantially the same manner that the Assets
         were owned and operated by the Vendor Group Companies immediately prior
         to the Closing Date or (B) the failure of the Purchaser Group Companies
         to have on the Closing Date any consent or governmental permit
         necessary to allow the Purchaser Group Companies to own or operate the
         Assets in substantially the same manner that the Assets were owned and
         operated by the Vendor Group Companies immediately prior to the Closing
         Date, in each of clauses (A) and (B) above, to the extent that the
         Vendor is notified by the Purchaser of such Losses or Expenses within
         three (3) years after the Closing Date; and (iv) all federal, state,
         foreign and local income tax liabilities attributable to the operation
         of the Assets prior to the Closing Date.

(b)      The aggregate liability of Vendor under Clause 6.2(a) above shall not
         exceed $10 million. Furthermore, no claim may be made against Vendor
         for indemnification pursuant to Clause 6.2(a) unless the aggregate
         dollar amount of all claims for indemnification pursuant to such clause
         shall exceed $500,000, in which case Vendor shall be liable for claims
         for indemnification only to the extent such aggregate amount exceeds
         $500,000.

6.3.     GENERAL PROVISIONS.

(a)      The Purchaser agrees that within a reasonable period of time after it
         becomes aware of facts giving rise to a claim for indemnification
         pursuant to Clause 6.2, it will provide notice thereof in writing to
         Vendor specifying the nature of and specific basis for such claim.



                                       9
<PAGE>

(b)      Vendor shall have the right to control all aspects of the defence of
         (and any counterclaims with respect to) any claims brought against
         Purchaser, the Purchaser Group Companies or the Companies that are
         covered by the indemnification set forth in Clause 6.2, including,
         without limitation, the selection of counsel, determination of whether
         to appeal any decision of any court and the settling of any such matter
         or any issues relating thereto; provided, however, that no such
         settlement shall be entered into without the consent (which consent
         shall not be unreasonably withheld) of the Purchaser (with the
         concurrence of the conflicts committee of Teekay GP L.L.C.) unless it
         includes a full release of the Purchaser, the Purchaser Group Companies
         and the Companies from such matter or issues, as the case may be.

(c)      The Purchaser agrees to cooperate fully with Vendor with respect to all
         aspects of the defence of any claims covered by the indemnification set
         forth in Clause 6.2, including, without limitation, the prompt
         furnishing to Vendor of any correspondence or other notice relating
         thereto that the Purchaser, the Purchaser Group Companies or the
         Companies may receive, permitting the names of such parties to be
         utilized in connection with such defence, the making available to
         Vendor of any files, records or other information of such parties that
         Vendor considers relevant to such defence and the making available to
         Vendor of any employees of Purchaser, the Purchaser Group Companies or
         the Companies; provided, however, that in connection therewith Vendor
         agrees to use reasonable efforts to minimize the impact thereof on the
         operations of such parties and further agrees to maintain the
         confidentiality of all files, records and other information furnished
         by any such party pursuant to this Clause 6.3. In no event shall the
         obligation of the Purchaser to cooperate with Vendor as set forth in
         the immediately preceding sentence be construed as imposing upon the
         Purchaser an obligation to hire and pay for counsel in connection with
         the defence of any claims covered by the indemnification set forth in
         this Clause 6; provided, however, that the Purchaser may, at its own
         option, cost and expense, hire and pay for counsel in connection with
         any such defence. Vendor agrees to keep any such counsel hired by the
         Purchaser reasonably informed as to the status of any such defence
         (including providing such counsel with such information related to any
         such defence as such counsel may reasonably request) but Vendor shall
         have the right to retain sole control over such defence.

(d)      In determining the amount of any Loss or Expense for which the
         Purchaser, any Purchaser Group Company or any Company is entitled to
         indemnification under this Agreement, the gross amount of the
         indemnification will be reduced by (i) any insurance proceeds realized
         by such parties, and such correlative insurance benefit shall be net of
         any incremental insurance premium that becomes due and payable by such
         parties as a result of such claim, and (ii) all amounts recovered by
         such parties under contractual indemnities from third persons. The
         Purchaser hereby agrees to use commercially reasonable efforts to
         realize any applicable insurance proceeds or amounts recoverable under
         such contractual indemnities; provided, however, that the costs and
         expenses (including, without limitation, court costs and reasonable
         attorneys' fees) of Purchaser, the Purchaser Group Companies or the
         Companies in connection with such efforts shall be promptly reimbursed
         by Vendor in advance of any determination of whether such insurance
         proceeds or other amounts will be recoverable.

(e)      The Purchaser hereby acknowledges and agrees that its sole and
         exclusive remedy with respect to any and all claims relating to the
         subject matter of this Agreement and the Transaction Documents shall be
         pursuant to the indemnification provisions set forth in this Clause 6.
         In furtherance of the foregoing, the Purchaser hereby waives, to the
         fullest extent permitted under applicable law, any and all rights,
         claims and causes of action it may have against Vendor and the Vendor
         Group Companies arising under or based upon any federal, state, foreign
         or local statute, law, ordinance, rule or regulation



                                       10
<PAGE>

         (including, without limitation, any such rights, claims or causes of
         action arising under or based upon common law or otherwise).

7        IMPLEMENTATION

7.1      FURTHER ASSURANCES. The Vendor shall (and shall procure that any other
         relevant person shall) execute any deeds or documents and exercise or
         waive any rights and generally take any action, including passing (or
         procuring that there is passed) any resolution of Vendor or (whilst the
         Vendor remains the registered owner) the Companies that the Purchaser
         may reasonably require, which may be necessary for the Transaction
         Documents to be carried into effect.

8        COSTS

8.1      RESPONSIBILITY FOR COSTS. Except where expressly provided otherwise,
         each party shall pay its own costs connected with the negotiation,
         preparation, execution and implementation of the Transaction Documents
         and any matters connected therewith and investigating the affairs of
         the Companies.

8.2      CREDIT FACILITY PAYMENT. Upon the closing of the credit facility
         contemplated by the Credit Facility Commitment, the Purchaser shall pay
         to the Vendor a credit facility financing fee of US$627,539.00 by
         transferring such amount to the Vendor's Account.

9        OTHER PROVISIONS

9.1      ENTIRE AGREEMENT. This Agreement together with the other Transaction
         Documents constitutes the entire agreement between the parties
         regarding the sale and purchase of the Assets and related matters and
         supersedes any prior drafts, agreements, undertakings, representations,
         warranties and arrangements of any kind, whether or not in writing,
         regarding the same, all of which are hereby terminated and shall cease
         to have effect in all respects, and the parties confirm that there are
         no collateral or supplemental agreements relating to the Transaction
         Documents, except as expressly set forth herein or therein.

9.2      ASSIGNMENT.

(a)      This Agreement shall be binding on and endure for the benefit of each
         party's successors and permitted assigns. Save as provided in Clause
         9.2(b), no party shall, without the prior written consent of the other
         party, assign, transfer, charge or deal in any other manner with this
         Agreement or any of its rights (whether to damages or otherwise) or
         obligations arising under or in connection with the Agreement, or
         purport to do any of the same, nor sub-contract any or all of its
         obligations under this Agreement, and any such assignment, transfer,
         charge or dealing shall be void for all purposes.

(b)      The Purchaser may assign all or any part of its rights and benefits
         under this Agreement to any Purchaser Group Companies.

(c)      Subject to and upon any succession or assignment permitted by this
         Agreement, any such successor or assignee shall in its own right be
         able to enforce any term of this Agreement in accordance with the terms
         of this Agreement as if it were a party, but until such time shall have
         no rights whether as a third party or otherwise. The Vendor shall have
         no greater liabilities towards any successor or assignee of the
         Purchaser than it



                                       11
<PAGE>

         would have had to the Purchaser had the Purchaser remained fully and
         solely entitled under this Agreement.

9.3      RIGHT OF SET-OFF, DEDUCTIONS AND WITHHOLDINGS AND TAX ON PAYMENTS.

(a)      The Purchaser shall not be entitled to set off against the
         Consideration any sums owing to it by the Vendor.

(b)      If any deduction or withholding is required by law to be made from any
         payment from one party to another party under any Transaction Document,
         the party making the payment shall increase the amount thereof so as to
         ensure that the recipient receives and is able to retain that amount
         that it would have received and retained had the payment not been the
         subject matter of such deduction or withholding provided always that if
         the recipient is entitled to a credit or some other benefit as a
         consequence of the payment to it being the subject matter of a
         deduction or withholding it shall use its reasonable endeavours to
         utilise the credit (whether by set off, or by claiming a repayment in
         respect thereof, or otherwise) or benefit so arising and in the event
         that it is able so to do it shall repay to the party who made the
         payment an amount equal to the credit or benefit so utilised, provided
         always that this clause is without prejudice to the limitations on the
         Vendor's liabilities as set out in Clause 6. For the avoidance of
         doubt, this clause shall not impose upon the recipient of the payment
         any obligation to utilise any credit or benefit in priority to any
         other economic credit or benefit available to it or to pay to the party
         making the payment an amount greater than that by which the original
         payment was increased under this clause.

(c)      If any payment from the Vendor to the Purchaser under any Transaction
         Document is liable to Tax in the hands of the Purchaser, the Vendor
         shall increase the payment by such an amount as will ensure that the
         Purchaser is able to receive and retain, after paying Tax in respect of
         its receipt, an amount equal to that which would otherwise have been
         paid to it had the receipt not been subject to Tax in its hands,
         provided always that this clause is without prejudice to the
         limitations on the Vendor's liabilities as set out in Clause 6. The
         parties shall agree to the amount of any increase in a relevant payment
         to give effect to this Clause. In the event that the parties are not
         able to agree the amount of any increase, the amount thereof shall be
         certified by the Purchaser's auditors acting as experts whose decision
         in respect thereof shall be binding on the relevant parties except in
         the case of manifest error.

9.4      WAIVERS, RIGHTS AND REMEDIES.

(a)      No failure or delay on the part of either party to this Agreement in
         exercising any right or remedy provided by law or under this Agreement
         shall impair such right or remedy or operate as a waiver or variation
         of it or preclude its exercise at any subsequent time and no single or
         partial exercise of any such right or remedy shall preclude or restrict
         any other or further exercise of it or the exercise of any other right
         or remedy.

(b)      A waiver by either party to this Agreement of a breach of or default
         under any Transaction Document shall not constitute a waiver of any
         other breach or default, shall not affect the other terms of any
         Transaction Document or the rights of any other person thereto and
         shall not prevent the Purchaser from subsequently requiring compliance
         with the waived obligation.

(c)      Any waiver (in whole or in part) of any right or remedy under this
         Agreement must be set out in writing, signed by or on behalf of the
         person granting the waiver and may be given subject to any conditions
         thought fit by the grantor and, unless otherwise expressly



                                       12
<PAGE>

         stated, any waiver shall be effective only in the instance and only for
         the purpose for, and in favour of the person to, which it is given.

(d)      Unless specifically provided otherwise, the rights and remedies of the
         Purchaser and the Vendor under or pursuant to any Transaction Document
         are cumulative, may be exercised as often as the Purchaser or the
         Vendor, as applicable considers appropriate and are in addition to its
         rights and remedies under the general law.

9.5      VARIATIONS. No variation of any Transaction Document shall be valid
         unless it is agreed in writing and signed by or on behalf of each of
         the parties thereto.

9.6      EFFECT OF CLOSING. This Agreement (other than obligations that have
         already been fully performed) remains in full force after Closing.

9.7      PROVISIONS OF AGREEMENT SEVERABLE. If any provisions of this Agreement
         or any other Transaction Document is, or becomes, invalid,
         unenforceable or illegal, in whole or in part, under the laws of any
         jurisdiction, such term or provision or part shall to that extent be
         deemed not to form part of this Agreement or the relevant Transaction
         Document (as the case may be), but the validity, enforceability or
         legality of the remaining provisions of this Agreement or the relevant
         Transaction Document shall not be impaired.

9.8      INTEREST FOR LATE PAYMENT. Any sum owing by either party under this
         Agreement shall carry interest from (and excluding) the date on which
         it is payable until (and including) the date of actual payment at the
         Specified Rate; such interest will be compounded semi-annually and be
         payable after as well as before any judgment.

9.9      COUNTERPARTS. This Agreement and each of the other Transaction
         Documents may be entered into in any number of counterparts and by the
         parties thereto on separate counterparts, each of which when so
         executed and delivered shall be an original but each such Transaction
         Document shall not be effective until each party thereto has executed
         at least one counterpart, but all the counterparts for each Transaction
         Document shall together constitute one and the same instrument.

9.10     THIRD PARTY RIGHTS. This Agreement and the other Transaction Documents
         are made for the benefit of the respective parties hereto and thereto
         and their successors and permitted assigns only and are not intended to
         benefit, and no term thereof shall be enforceable by, any other person
         by virtue of the Contracts (Rights of Third Parties) Act 1999.

10       NOTICES

10.1     GENERAL. Any notice under or in connection with this Agreement shall be
         in writing and may be delivered by hand or fax to the address of the
         relevant party that is set out below or to such other address as that
         party may have notified in writing from time to time to the party
         serving the notice, which notice so served by fax shall be deemed to
         have been received at the time of despatch:

(a)      the Vendor

         Name:             Teekay Shipping Corporation

         Address:          TK House, Bayside Executive Park,
                           West Bay Street & Blake Road,


                                       13
<PAGE>
                           P.O. Box AP-59212,
                           Nassau, The Bahamas
         Fax Number:     +1 242 502 8840
         marked for the attention of the Corporate Secretary

(b)      the Purchaser

         Name:             Teekay GP L.L.C., as general partner of Teekay LNG
                           Partners L.P.
         Address:          TK House, Bayside Executive Park,
                           West Bay Street & Blake Road,
                           P.O. Box AP-59212,
                           Nassau, The Bahamas
         Fax Number:     +1 242 502 8840
         marked for the attention of the Corporate Secretary


11       GOVERNING LAW AND JURISDICTION

11.1     ENGLISH LAW. This Agreement is governed by, and shall be construed in
         accordance with, English law.

11.2     ARBITRATION.

(a)      Any dispute arising out of this Agreement shall be referred to
         arbitration in London in accordance with the Arbitration Act 1996 and
         any statutory re-enactment or modification thereof before a sole
         arbitrator agreed by the parties or failing agreement within 7 days of
         receipt by one party of a notice (the "FIRST NOTICE") from the other
         proposing an arbitrator, a tribunal of three arbitrators comprising:

(i)      the arbitrator proposed in the First Notice;

(ii)     an arbitrator appointed by the party that received the First Notice;
         and

(iii)    an arbitrator, who shall be the chairman, appointed by the two
         arbitrators referred to in (i) and (ii) above.

         If the party receiving the First Notice does not within 14 days of
         receipt thereof notify the other party of its appointed arbitrator, the
         arbitrator referred to in (i) above shall be deemed appointed as sole
         arbitrator.

(b)      Once appointed in relation to a dispute, a sole arbitrator or tribunal
         shall resolve all other disputes between the parties in relation to
         this Agreement, subject to the availability of the arbitrator(s).

12       TERMINATION

12.1     TERMINATION. This Agreement may be terminated upon written notice given
         at any time before the Closing:

                                       14
<PAGE>

(a)      by the mutual written consent of Vendor and Purchaser;

(b)      by Vendor or Purchaser, if the Closing shall not have occurred prior to
         February 23, 2006 (the "EXPIRATION DATE"); provided, however, that the
         right to terminate this Agreement under this Clause 12.1(b) shall not
         be available to any party whose failure to fulfill any obligation under
         this Agreement shall have been the cause of, or shall have resulted in,
         the failure of the Closing to occur prior to such date;

(c)      by Vendor, in the event of a material breach by Purchaser of any
         representation, Warranty, covenant or agreement of Purchaser contained
         herein that has not been cured or is not curable by the Expiration
         Date; or

(d)      by Purchaser, in the event of a material breach by Vendor of any
         representation, Warranty, covenant or agreement of Vendor contained
         herein that has not been cured or is not curable by the Expiration
         Date.

12.2     EFFECT OF TERMINATION. In the event of the termination of this
         Agreement pursuant to Clause 12.1 above, the parties shall be relieved
         of their obligations under this Agreement, save that Clauses 1 and 10
         to 11 shall continue in full force and effect, and neither party shall
         have any claims against the other party in connection with this
         Agreement except in respect of any accrued rights or obligations
         arising under this Agreement before termination or in connection with
         any antecedent breach by any party of any provision of this Agreement
         or any breach by any party of any continuing provision of this
         Agreement.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]


                                       15
<PAGE>


IN WITNESS WHEREOF this Purchase Agreement has been executed by or on behalf of
the parties the day and year first above written.

EXECUTED by
TEEKAY SHIPPING CORPORATION

By:
   -------------------------------------------------------

Name:
     -----------------------------------------------------

Title:
      ----------------------------------------------------


EXECUTED by
TEEKAY LNG PARTNERS L.P.
by its general partner
TEEKAY GP L.L.C.

By:
   -------------------------------------------------------

Name:
     -----------------------------------------------------

Title:
      ----------------------------------------------------


                                       16
<PAGE>

                                   SCHEDULE A

                         WARRANTIES AND REPRESENTATIONS



1        THE COMPANIES AND THE INTERESTS

1.1      INFORMATION. The Companies are duly formed and validly existing under
         the laws of The Republic of the Marshall Islands. The Companies have
         the requisite power and authority to own and operate its properties and
         assets and to carry on its business.

1.2      TITLE TO INTERESTS AND THE NOTES. The Interests constitute one hundred
         per cent of the issued capital of the Companies, the Vendor is the sole
         legal and beneficial owner of the Interests, and no claim has been made
         by any person to be entitled to any of them. The Interests have been
         duly authorized, properly allotted and validly issued and are fully
         paid, or credited as fully paid, and non-assessable. There is no
         Security Interest, option, conversion right, right to acquire, or other
         adverse interest, right, equity, claim or potential claim of any
         description on or over or affecting any of the Interests nor are there
         any agreements, arrangements or commitments to give or create any such
         Security Interest, right or claim, and no claim has been made by any
         person to be entitled to any.

1.3      NO ARRANGEMENTS RELATING TO SHARE CAPITAL. The Companies have not
         created or issued any shares or equity interests (other than the
         Interests). There is no agreement, arrangement, obligation or
         commitment (including an option or right of pre-emption or conversion)
         requiring or granting any person the right to require the creation,
         allotment, issue, transfer, redemption or repayment of, or creating or
         requiring the creation of any Security Interest over, or requiring the
         grant to a person of the right (conditional or not) to require the
         allotment, issue, transfer, redemption or repayment of, any shares,
         equity or loan capital in the Companies (or any unissued shares, equity
         capital, loan capital or other securities of the Companies) now or at
         any time in the future, and the Companies have not agreed to do or
         enter into any of the foregoing and no person has made any claim to be
         entitled to any of the foregoing.

1.4      NO CAPITAL REORGANISATION.  The Companies have not since incorporation:

(a)      made any issue of securities by way of capitalisation of profits or
         reserves (including share premium account and capital redemption
         reserve); or

(b)      repaid, purchased or redeemed any shares of any class of its share
         capital or otherwise reduced its share capital or any class of it;

         and have not agreed to do any of the foregoing (whether at the option
         of any other person or otherwise).

1.5      NO AGREEMENT/ARRANGEMENT. Neither the Vendor nor the Companies are
         party to any agreement or arrangement concerning:

(a)      the transfer or disposal of the Assets or any interest therein or any
         restriction thereon or obligation relating thereto;

(b)      the exercise of votes at meetings of the board of the Companies or of
         the holders of any class of Interests or the Notes; or


                                      A-1
<PAGE>

(c)      the right to appoint or remove any directors or officers of the
         Companies.

1.6      NO SECURITY INTEREST OVER ASSETS. There is no Security Interest (other
         than liens arising in the usual course of business consistent with past
         practices) affecting the whole or any material part of the assets of
         the Companies.

2        THE VENDOR

2.1      CAPACITY OF VENDOR.  As regards the Vendor:

(a)      it has the requisite power and authority to enter into the Transaction
         Documents to which it is a party and perform all its obligations
         thereunder;

(b)      the Transaction Documents to which it is a party constitute (or will
         constitute when executed) its legal, valid and binding obligations
         enforceable against it in accordance with their terms;

(c)      it has the power and authority to absolutely and unconditionally to
         sell and transfer the full legal and beneficial ownership in the
         Interests and the Notes registered in its name to the Purchaser on the
         terms set out in this Agreement;

(d)      the execution and delivery of the Transaction Documents and performance
         by it of the obligations thereunder do not and will not result in a
         breach of, or constitute any default under, any law or regulation, any
         order, judgement or decree by any court or governmental agency to which
         it is a party or by which it is bound, its Articles of Incorporation
         and Bylaws or any agreement to which it is a party;

(e)      all consents, licences, approvals and authorisations required by it in
         connection with the Transaction Documents to which it is a party and
         the transactions contemplated thereby have been obtained and are in
         full force and effect;

(f)      no action, suit, proceeding, litigation or dispute against it or any
         Vendor Group Company is presently taking place or pending or, to its
         knowledge, threatened that would or might reasonably be expected to
         inhibit its ability to perform its obligations under the Transaction
         Documents to which it is a party or that could materially and adversely
         affect the Assets; and

(g)      in so far as it is a body corporate:

         (i)      it is a body corporate duly incorporated and validly existing
                  under the laws of the jurisdiction in which it is
                  incorporated;

         (ii)     no Insolvency Event has occurred in relation to it and no
                  events or circumstances have arisen that entitle or could
                  entitle any person to take any action, appoint any person,
                  commence proceedings or obtain any order instigating an
                  Insolvency Event.

2.2      VENDOR/COMPANIES RELATIONSHIP. Neither the Vendor nor any Vendor Group
         Companies:

(a)      owe any indebtedness or other liability which has not been Disclosed
         and which in aggregate exceeds $100,000 to any of the Companies whether
         actually or contingently, whether solely or jointly with any other
         person and whether as principal or surety, and, other than the Notes,
         there is no such indebtedness or liability which has not been

                                      A-2
<PAGE>

         Disclosed and which in aggregate exceeds $100,000 due or owing by any
         of the Companies to the Vendor or any Vendor Group Companies and there
         is no guarantee or Security Interest in respect of any such
         indebtedness or liability outstanding;

(b)      are party to any agreement, arrangement or understanding, other than
         the Transaction Documents, with the Companies or relating to the
         Companies or the Assets in which the Vendor, any Vendor Group Company
         is or has been interested, whether directly or indirectly, and there is
         no agreement (other than the Notes) arrangement or understanding to
         which the Companies are a party and in which the Vendor or any Vendor
         Group Company has or has had an interest, whether directly or
         indirectly; or

(c)      is entitled to a claim of any nature against any of the Companies,
         which has not been Disclosed other than amounts owing under the Notes
         or which individually does not exceed $100,000, or has assigned to any
         person the benefit of a claim against the Companies to which it would
         otherwise be entitled.

3        AGREEMENTS

3.1      DISCLOSURE OF CONTRACTS. Complete and accurate copies of all Contracts
         (including all amendments and supplemental agreements relating thereto)
         have been provided to the Purchaser and all Contracts are set out in
         Section 3.1 of the Disclosure Schedule.

3.2      ENFORCEABILITY OF AND COMPLIANCE WITH AGREEMENTS. In relation to each
         Contract:

(a)      the Vendor has no reason to believe that the Companies will be unable
         to complete and fulfil each of the Contracts by the due date and within
         the estimated level of costs or that any products sold or to be sold by
         the Companies are or will be unable to meet the specifications
         contracted for;

(b)      the Companies are in the possession or in the control of each such
         Contract;

(c)      so far as the Vendor is aware, there are no written or oral agreements
         that derogate from the obligations of any person other than the
         Companies or increase the obligations of the Companies under the
         Contracts;

(d)      each such Contract has been validly executed by the Companies, is valid
         and subsisting, has not been terminated and is fully enforceable
         against the Companies and, to the Vendor's knowledge, the other parties
         to such agreement in accordance with its terms;

(e)      none of such Contracts is subject to a Security Interest granted or
         created by the Companies or Vendor Group Companies other than under the
         terms of the relevant Contract;

(f)      to Vendor's knowledge, there is no and has not been, at any time, any
         breach of, or any default in the performance of, the terms of any such
         Contracts by any person other than the Companies nor are there any
         circumstances likely to give rise to such breach or default. The
         Companies have not granted any time or indulgence, or waived any right,
         in relation to any such Contract and, in particular, but without
         prejudice to the generality of the foregoing, all amounts due and
         payable under such agreements have been duly paid in full on, or within
         a reasonable period of, the due date for payment of the same;


                                      A-3
<PAGE>

(g)      so far as the Vendor is aware, the Companies have fulfilled all of
         their obligations and performed and observed all warranties,
         undertakings, covenants and agreements on their part to be fulfilled,
         performed and observed under each of such Contracts;

(h)      no notice of any intention to terminate, repudiate, rescind, modify or
         disclaim any provision of any Contract has been given by the Companies
         or, so far as the Vendor is aware, received from a person other than
         the Companies by the Companies in respect of any such Contract;

(i)      so far as the Vendor is aware, the Companies have paid all Taxes,
         duties, imposts and other charges payable in respect of the Contracts
         so far as such Taxes, duties, imposts and other charges fall upon the
         Companies and have become due and payable;

(j)      all necessary licences, approvals and consents required by the
         Companies prior to the entry into of each of such Contracts and for
         their continuation were duly obtained and are subsisting and, to
         Vendor's knowledge, no circumstances have arisen that may lead to
         withdrawal or failure to renew, if applicable, of any such licence,
         approval or consent;

(k)      there are no disputes or outstanding claims pending or, to Vendor's
         knowledge, threatened against the Companies under such Contracts and,
         to Vendor's knowledge, no person is entitled to make, or has threatened
         to make, a claim against the Companies in respect of any
         representation, breach of condition or warranty or other express or
         implied term relating to any such Contracts and no matter exists that
         would or might enable a person other than the Companies to make such a
         claim or raise a set-off, deduction, withholding or counterclaim in any
         action for breach of the relevant Contract or otherwise give any person
         other than the Companies the right to withhold or delay payment of any
         sum due from it under the terms of the relevant Contract or the
         performance of any of its obligations thereunder;

(l)      so far as the Vendor is aware, no person (other than the parties to
         such Contracts) has any rights (including any Security Interests) in
         respect of any such Contracts or the assets the subject thereof; and

(m)      so far as the Vendor is aware, no Insolvency Event has occurred in
         relation to any third party to such Contracts.

3.3      NO POWERS OF ATTORNEY. There are in force no powers of attorney given
         by the Companies nor any other authority (express, implied or
         ostensible) given by the Companies to or in favour of any person (as
         agent or otherwise) to enter into any agreement, contract or commitment
         or to do anything on their behalf. The Disclosure Schedule sets out
         details of all persons who have authority to bind the Companies in the
         ordinary course of business.

3.4      CHANGE OF CONTROL. Neither the sale of the Assets hereunder nor any
         change in the management of the Companies as a result of this Agreement
         will:

(a)      entitle any person to modify or terminate any Contract or other
         arrangement with the Companies;

(b)      result in the breach by the Companies under any of the terms,
         conditions or provisions of any Contract or other instrument to which
         the Companies are now a party;

(c)      result in any present or future Indebtedness becoming due and payable
         or capable of being declared due and payable prior to its stated
         maturity; or


                                      A-4
<PAGE>

(d)      entitle any person to receive from the Companies any finder's fee,
         brokerage or other commission in connection with the sale of the
         Interests and the Notes.

3.5      OFFERS AND TENDERS. No offer or tender or similar arrangement given or
         made by the Companies are capable of giving rise to an agreement solely
         by the unilateral act of any person other than the Companies.

3.6      JOINT VENTURES ETC. The Companies do not, and have not agreed to, act
         or carry on business in partnership with any other person and are not
         and have not agreed to act or become a member of any joint venture,
         consortium, corporate or unincorporated body, association or
         undertaking.

3.7      COMPETITION/ANTI-TRUST. The Companies are not party to any practice,
         arrangement or agreement that infringes or is likely to require
         registration or notification under any relevant anti-trust or
         competition law.

3.8      RESTRICTIVE PRACTICES. The Companies are not and have not been a party
         to any agreement, arrangement, understanding or practice restricting
         the freedom of the Companies to carry on the whole or any part of its
         business in any place in such manner as it thinks fit or to provide or
         take goods and/or services by such means and from and to such persons
         and into or from such places as it may from time to time think fit
         and/or to compete in any area or in any field or with any person.

3.9      NO DIRECTORS OR OFFICERS. The management of each of the Companies is
         vested exclusively in its members. The Vendor is, and the Purchaser
         shall be upon the Closing, the sole member of each of the Companies
         with, in its capacity as sole member, authority to make all decisions
         and take all actions for each of the Companies as, in its sole
         discretion, it shall deem necessary and appropriate to enable each of
         the Companies to carry out any lawful activity, including but not
         limited to carrying on the acquisition, ownership, operation and
         disposition of oceangoing vessels. Notwithstanding its authority to do
         so as sole member of the Companies, the Vendor has not appointed or
         elected any individuals to officer positions of any of the Companies.

4        FINANCIAL ARRANGEMENTS

4.1      INDEBTEDNESS. Other than the Notes and the Credit Facility Commitment,
         the Companies do not have outstanding nor have they incurred or agreed
         to incur any Indebtedness (including, without limitation, any
         indebtedness for moneys borrowed or raised under any acceptance credit,
         bond, rate, bill of exchange or commercial paper, finance lease, hire
         purchase agreement, trade bills, forward sale or purchase agreement or
         conditional sale agreement or other transaction having the commercial
         effect of a borrowing).

4.2      BORROWINGS. Other than the Notes, the Companies have not borrowed any
         monies from the Vendor, any Vendor Group Companies or any third party.

4.3      LOANS BY THE COMPANIES. The Companies have not made any loans to the
         Vendor, any Vendor Group Companies or any third party.

4.4      DEBTS. The Companies have not factored any of its debts. There are no
         debts owing to the Companies.

                                      A-5
<PAGE>

4.5      NO GUARANTEE OR SECURITY INTERESTS. No guarantee or Security Interest
         has been given or entered into by the Companies or any third party in
         respect of Indebtedness or other obligations of the Companies and no
         guarantee or Security Interest has been given or entered into by the
         Companies in respect of any other person.

4.6      NO INDEMNITIES GIVEN BY THE COMPANIES. The Companies are not
         responsible (including on a contingent basis) for the indebtedness, or
         for the default in the performance of any obligation, of any person nor
         is it party to any option or pre-emption right or any guarantee,
         suretyship or any other obligation (whatever called) to pay, purchase
         or provide funds (whether by advance of money, the purchase of or
         subscription for shares or other securities or the purchase of assets
         or services or otherwise) for the payment of, or as an indemnity
         against the consequence of default in the payment of, any indebtedness
         of any person.

4.7      BANK ACCOUNTS. Details of all bank accounts of the Companies, and
         particulars of the balances of all the Companies' bank accounts as at a
         date not more than 2 (two) Business Days before the date of this
         Agreement, have been disclosed to the Purchaser, and the Companies have
         no other bank accounts. Since the date of such particulars, there have
         been no material payments out of any such bank accounts, except for
         routine payments in the ordinary course of business consistent with
         past practices.

5        ASSETS, LIABILITIES AND OTHER ARRANGEMENTS

5.1      NO OTHER ASSETS AND LIABILITIES. The Companies have no assets other
         than the Vessels and under the Contracts and no liabilities other than
         those arising in connection with the Contracts, the Notes and as set
         forth in Section 5.1 of the Disclosure Schedule and, save for its
         obligations under the Contracts, the Notes there are no agreements or
         arrangements to which the Companies are a party that increase the
         obligations of the Companies under the Contracts or that create or
         include any other obligation that might be binding on the Companies.

5.2      BUSINESS ACTIVITY. The only business activity of the Companies since
         incorporation has been the acquisition, ownership, operation of the
         Vessels.

6        PROPERTIES

6.1      PROPERTIES.  The Companies do not own, occupy or use any real property.

7        INSURANCE

7.1      INSURANCE POLICIES. The Companies maintain the policies of insurance
         listed in Section 7.1 of the Disclosure Schedule and attached to the
         Disclosure Schedule, each of which is in full force and effect and, to
         Vendor's knowledge, not subject to being avoided for any reason.

8        LITIGATION AND OTHER DISPUTES

8.1      NO PROCEEDINGS. The Companies are not, and, to Vendor's knowledge, no
         director or officer of the Companies (in relation to the Companies'
         affairs or, if resolved in a manner adverse to such director or
         officer, could result in a materially adverse effect on the Company's
         business) is, engaged in or a party to any dispute, litigation,
         arbitration, prosecution or other legal proceedings or in any
         proceedings or hearings before any statutory or governmental body,
         department, board or agency, nor are any of the

                                      A-6
<PAGE>

         foregoing pending or, to Vendor's knowledge, threatened or expected
         either against or by the Companies, and, to Vendor's knowledge, there
         is no fact or circumstance or any other form of written demand in
         existence that might give rise to the same, or form the basis of any
         criminal prosecution against the Companies.

8.2      NO ORDERS OR JUDGEMENTS. There is no order, decree or judgement of any
         court, tribunal or any governmental agency of any country outstanding
         against the Companies or, to Vendor's knowledge, any person for whose
         acts the Companies may be vicariously liable, and, to Vendor's
         knowledge, there are no circumstances likely to give rise to vicarious
         liability of the Companies, and no injunction has been granted against
         the Companies.

8.3      NO UNLAWFUL ACTS. The Companies have not committed, or been prosecuted
         for, any breach of a statutory or regulatory duty or any tortious or
         other criminal or unlawful or unauthorised act that could reasonably be
         expected to lead, or has led, to a claim for damages or an injunction
         or other order of a court or tribunal of competent jurisdiction being
         made against it, and there are no circumstances likely to give rise to
         such a breach or act.

9        COMPLIANCE WITH LEGAL REQUIREMENTS

9.1      COMPLIANCE BY COMPANIES. Each of the Companies has, so far as the
         Vendor is aware, complied and is continuing to comply in all material
         respects with all relevant legislation and regulations and guidelines
         in any part of the world applicable to it and/or its business and/or
         its assets.

9.2      ULTRA VIRES. The Companies are empowered and duly qualified to carry on
         business in all jurisdictions in which its present businesses are now
         carried on and has not entered into any ultra vires transaction.

9.3      RETURNS. All returns, particulars, resolutions and other documents
         required to be filed with or delivered to the Registrar of Corporations
         in the Republic of the Marshall Islands by the Companies have been
         properly prepared and so filed or delivered.

9.4      LIMITED LIABILITY COMPANY AGREEMENT. The Limited Liability Company
         Agreements of, and all resolutions passed by, the Companies and all
         other legal requirements concerning the Companies have been complied
         with. A copy of each Company's Limited Liability Company Agreement has
         been provided to the Purchaser, which is complete and accurate in all
         material respects, has attached thereto or incorporated therein copies
         of all resolutions and other documents required by law to be so
         attached or incorporated, and fully sets out the rights and
         restrictions attaching to the Interests.

9.5      BOOKS AND RECORDS. The statutory books (including all registers and
         minute books whether electronic or otherwise), books of account and
         other statutory records of the Companies have been properly and
         accurately written up or maintained in accordance with all applicable
         laws and are up to date (but not including the date of the Agreement)
         and comprise complete and accurate records of all information required
         to record therein other than to the extent that they are not material
         to the business of the Companies. The Companies have not received any
         notice or allegation that any of the statutory books, books of accounts
         or other records of whatsoever kind of the Companies are inaccurate or
         incomplete or should be rectified.

9.6      COMPANIES NAME. The Companies does not use or otherwise carry on
         business under any name other than its full corporate name. The
         Companies have the full right to use


                                      A-7
<PAGE>

         its corporate name without restriction, and the Companies and the
         Vendor are not aware of any actual or threatened challenge to the use
         of those names or any of them in respect of the business of the
         Companies or any claim that any such use infringes any rights of any
         third party.

9.7      CONSENTS AND LICENCES. The Companies holds any and all licences
         (including statutory licences), permissions, authorisations, consents,
         registrations and exemptions required by it for the operation of its
         business as now carried on, and, to Vendor's knowledge, none of these
         is subject to revocation or cancellation for any reason.

9.8      NO PENALTIES OR FINES. Neither the Companies nor any of its officers
         (or agents during the course of their duties) has committed or omitted
         to do any act or thing that has given or could give rise to a material
         claim, fine, penalty or other liability, at law or in equity, in
         respect of the physical or environmental condition of any of its fixed
         or moveable assets, real property or products.

9.9      NO INVESTIGATIONS AND INQUIRIES. No investigations, inquiries or
         reviews by or on behalf of any governmental or other body in respect of
         the Companies or its business or assets are pending or, to Vendor's
         knowledge, in existence or have been conducted or threatened, and there
         are no circumstances that might give rise to such investigation,
         inquiry or review.

10       EMPLOYMENT

10.1     EMPLOYEES. The Companies do not, and have never had any employees and
         there are no arrangements (written or otherwise) under which
         remuneration or benefit or other sum whatsoever is paid or given to any
         person (including any officer or consultant of the Companies).

11       TAXATION

11.1     TAX RESIDENCE.

(a)      The Companies are and always have been resident in The Bahamas for the
         purposes of Taxation and have never been resident in any other country
         for the purposes of Taxation or treated as so resident for the purposes
         of any double taxation agreement.

(b)      The Companies have never traded through a branch, agency or permanent
         establishment situated outside The Bahamas.

(c)      No circumstances exist whereby a person not resident in The Bahamas is
         assessable and chargeable to tax in the name of the Companies.

(d)      The Companies are not liable to pay nor have they at any time incurred
         any liability to Tax chargeable under the laws of any jurisdiction
         other than The Bahamas.

11.2     DISCLOSURES, NOTICES, RETURNS, CLEARANCES AND RECORDS.

(a)      All notices, reports, disclosures, accounts, computations, statements,
         assessments, registrations, de-registrations and any other information
         that ought to have been made or supplied by or in respect of the
         Companies for any Taxation purposes have been made or supplied on a
         proper basis, were punctually submitted, were accurate and complete
         when submitted and remain accurate and complete and are not the subject
         of any dispute, enquiry or investigation with any Taxation Authority,
         and, to Vendor's

                                      A-8
<PAGE>

         knowledge, there are no present circumstances that are likely to give
         rise to any such dispute, enquiry or investigation.

(b)      No action has been taken by the Companies in respect of which any
         consent or clearance from any Taxation Authority was required except in
         circumstances where such consent or clearance was validly obtained, and
         no conditions were attaching thereto.

(c)      The Companies have made and submitted each claim, disclaimer, election,
         notice and consent to have been made and submitted, and details of all
         such claims, disclaimers, elections, notices and consents are set forth
         in the Disclosure Schedule.

(d)      The Companies have never been subject to any enquiry, visit, audit,
         investigation or discovery order by any Taxation Authority nor, to
         Vendor's knowledge, are there any circumstances existing that make it
         likely that any such enquiry, visit, audit, investigation or discovery
         order will be made in the next 12 months.

(e)      The Disclosure Schedule sets out details of all notices given by any
         Taxation Authority to or in relation to the Companies, the provisions
         of which remain in force.

(f)      The Companies have sufficient records relating to past events to permit
         accurate calculation of the Taxation liability or relief that would
         arise upon a disposal or realisation on completion of each asset owned
         by the Companies before Closing.

(g)      Except as set out in the Disclosure Schedule, the Companies' Taxation
         affairs are not dependent on or subject to any concession, agreement or
         other formal or informal arrangement with any Taxation Authority.

11.3     ALL TAX PAID.

(a)      All Taxation for which the Companies are liable and that ought to have
         been paid has been paid on a timely basis to the appropriate Taxation
         Authority.

(b)      The Companies have not paid, within the three years ending on the date
         of this Agreement, nor will become liable to pay, any interest,
         penalty, fine or surcharge to any Taxation Authority.

(c)      The Companies have not received from any Taxation Authority (and have
         not subsequently repaid to or settled with that Taxation Authority) any
         payment to which they were not entitled or any notice in which their
         liability to Taxation was understated.

11.4     STAMP DUTY.

(a)      All documents that are in the possession of the Companies or under
         their control or to which the Companies are a party and that attract
         stamp duty have been properly stamped, and the Companies have duly paid
         all stamp duty to which they are, have been or may be made liable, and
         there is no liability for any penalty in respect of such duty nor, to
         Vendor's knowledge, are there any circumstances or transactions to
         which the Companies are or have been a party, which may result in the
         Companies becoming liable for any such penalty.

11.5     U.S. TAX CLASSIFICATION. Each of the Companies is classified for United
         States federal income tax purposes as a disregarded entity pursuant to
         Treas. Reg. Section 301.7701-

                                      A-9
<PAGE>

         3. Neither the Vendor nor the Companies will take any action to change
         the U.S. federal income tax classification of the Companies.

12       MISCELLANEOUS

12.1     NO BROKER'S FEES. No one is entitled to receive from the Companies any
         finder's fee, brokerage, or other commission in connection with the
         purchase of the Assets.

12.2     EFFECT OF ENTERING INTO THIS AGREEMENT. Compliance with the terms of
         this Agreement or Closing does not and will not:

(a)      conflict with or result in the breach of or constitute a default under
         any of the terms, conditions or provisions of:

         (i)      any agreement or instrument to which the Companies are now a
                  party, including the Contracts; or

         (ii)     the Companies' Limited Liability Agreements or give rise to or
                  cause to become exercisable any right of pre-emption or right
                  of first refusal; or

         (iii)    any loan to or mortgage created by the Companies or any lien,
                  lease, order, judgment, award, injunction, decree, ordinance
                  or regulation or any other restriction of any kind or
                  character to which any property of the Companies are subject
                  or by which the Companies are bound;

(b)      result in any present or future Indebtedness becoming due or capable of
         becoming due and payable prior to its stated maturity;

(c)      relieve any other party to an agreement or arrangement with the
         Companies, including the Contracts, of its obligations thereunder
         (whether contractual or otherwise) or enable it to vary or terminate
         its rights or obligations thereunder or determine any right or benefit
         enjoyed by the Companies or to exercise any right, whether under an
         agreement with, or otherwise in respect of, the Companies;

(d)      result in the creation or imposition of any Security Interest on any
         assets of the Companies;

(e)      cause the Companies to lose the benefit of any right or privilege they
         presently enjoy;

(f)      cause any person who normally does business with the Companies not to
         continue to do so on the same basis as previously; or

(g)      cause any licence or authority necessary or desirable for the
         continuation of the Companies' business to be determined or not renewed
         or continued or renewed on less favourable terms.

12.3     ACCURATE INFORMATION PROVIDED. All information given by the Vendor or
         any Vendor Group Companies or officials or professional advisers of the
         Companies or the Vendor to any of the directors, officials or
         professional advisers of the Purchaser in the course of negotiations
         leading to this Agreement, taken as a whole, was, when given, and
         remains and will at Closing be true and accurate in all material
         respects, and there is no matter or fact that has not been disclosed to
         the Purchaser that renders any such information untrue or misleading in
         any material respect.


                                      A-10
<PAGE>

12.4     DISCLOSURE SCHEDULE ETC ACCURATE. All information contained in the
         Disclosure Schedule is true, complete and accurate in all respects and
         nothing has been omitted and, there is no matter or fact, which renders
         any such information untrue, inaccurate, incomplete or misleading in
         any material respect.

12.5     ALL INFORMATION DISCLOSED. All information relating to the Companies
         that the Vendor knows or should reasonably know and that is material to
         be known by the Purchaser in the context of the sale of the Assets has
         been disclosed to the Purchaser and, to the best of the knowledge,
         information and belief of the Vendor, there are no other facts or
         matters undisclosed to the Purchaser that could reasonably be expected
         to have a material adverse effect on the Companies or the Assets.

13       INSOLVENCY

13.1     NO INSOLVENCY EVENT. No Insolvency Event has occurred in relation to
         the Companies and no events or circumstances have arisen that entitle
         or could entitle any person to take any action, appoint any person,
         commence proceedings or obtain any order instigating an Insolvency
         Event.

14       THE VESSELS

14.1     VESSEL COMMITMENTS.  In relation to each Vessel:

         (i)      the Vessel is properly registered in the name of the Vendor
                  under and pursuant to the flag and law of the Bahamas and all
                  fees due and payable in connection with such registration have
                  been paid;

         (ii)     the Vessel is entered with Det norske Veritas (or another
                  classification society of like standing) and has the highest
                  classification rating issued by such society for a vessel of
                  the type, age and class of the Vessel;

         (iii)    the Vessel is in class without any recommendations or notation
                  as to class or other requirement of the relevant
                  classification society, and if the Vessel is in a port, it is
                  in such condition that it can not be detached by any port
                  state authority or the flag state authority for any
                  deficiency;

         (iv)     the Vessel is owned free of all maritime liens, encumbrances
                  and mortgages except those that have been disclosed by the
                  Vendor and accepted by the Purchaser and the terms of any
                  charters that continue beyond the Closing Date, mortgages and
                  loan documents do not prohibit the sale of the Companies;

         (v)      the Vessel has been maintained in a proper and efficient
                  manner in accordance with internationally accepted standards
                  for good ship maintenance, is in good operating order,
                  condition and repair and is seaworthy and all repairs made to
                  the Vessel during the last two years and all known scheduled
                  repairs due to be made and all know deficiencies have been
                  disclosed in the Disclosure Schedule;

         (vi)     the Vessel is not (i) under arrest or otherwise detained, (ii)
                  other than in the ordinary course of business, in the
                  possession of any person (other than her master and crew) or
                  subject to a possessory lien; or (iii) other than in the
                  ordinary course of business, subject to any other lien;

         (vii)    the Vessel complies in all material respects with all laws,
                  the requirements of any government agency having jurisdiction
                  over the Vessel, the provisions of all

                                      A-11
<PAGE>

                  international conventions and the provisions of the rules and
                  regulations issued under international conventions applicable
                  to that Vessel;

         (viii)   the Vessel is supplied with valid and up-to-date safety,
                  safety construction, safety equipment, radio, loadline,
                  health, tonnage, trading and other certificates or documents
                  as may for the time being be prescribed by the law of the flag
                  of the Vessel or of any other pertinent jurisdiction, or that
                  would otherwise be deemed necessary by a shipowner acting in
                  accordance with internationally accepted standards for good
                  ship management and operations; and

         (ix)     no blacklisting or boycotting of any description whatsoever
                  has been applied or currently exists against or in respect of
                  the Vessel.


                                      A-12
<PAGE>


                                   SCHEDULE B


                                     VESSELS

<TABLE>
<CAPTION>
------------------------------- -------------------------- ------------------------- ----------------------------
  VESSEL                         AFRICAN SPIRIT             ASIAN SPIRIT              EUROPEAN SPIRIT
------------------------------- -------------------------- ------------------------- ----------------------------
<S>                             <C>                        <C>                       <C>
  Built                          2003                       2004                      2004
------------------------------- -------------------------- ------------------------- ----------------------------
  Yard                           Hyundai                    Hyundai                   Hyundai
------------------------------- -------------------------- ------------------------- ----------------------------
  Class                          DNV (Det Norske Veritas)   DNV                       DNV
------------------------------- -------------------------- ------------------------- ----------------------------
  Flag                           Bahamas                    Bahamas                   Bahamas
------------------------------- -------------------------- ------------------------- ----------------------------
  Place of Registration          Nassau, The Bahamas        Nassau, The Bahamas       Nassau, The Bahamas
                                 Maritime Authority         Maritime Authority        Maritime Authority
------------------------------- -------------------------- ------------------------- ----------------------------
  Call sign                      C6FW5                      C6FW6                     C6FW4
------------------------------- -------------------------- ------------------------- ----------------------------
  IMO (Registration) No.         9250737                    9247431                   9247429
------------------------------- -------------------------- ------------------------- ----------------------------
  Grt/Nrt                        79668/48784                79668/48784               79668/48784
------------------------------- -------------------------- ------------------------- ----------------------------
</TABLE>
                                       B-1