Document:

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                                                                    EXHIBIT 10.3

                              AMENDED AND RESTATED

                                OMNIBUS AGREEMENT

                                      AMONG

                          TEEKAY SHIPPING CORPORATION,

                                       AND

                                TEEKAY GP L.L.C.,

                          TEEKAY LNG PARTNERS L.P. AND

                           TEEKAY LNG OPERATING L.L.C.

                                       AND

                           TEEKAY OFFSHORE GP L.L.C.,

                         TEEKAY OFFSHORE PARTNERS L.P.,

                     TEEKAY OFFSHORE OPERATING GP L.L.C. AND

                         TEEKAY OFFSHORE OPERATING L.P.

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                     AMENDED AND RESTATED OMNIBUS AGREEMENT

         THIS AMENDED AND RESTATED OMNIBUS AGREEMENT is entered into on, and
effective as of, the Offshore Closing Date (as defined herein), among Teekay
Shipping Corporation, a Marshall Islands corporation ("Teekay"), Teekay GP
L.L.C., a Marshall Islands limited liability company (including any permitted
successors and assigns under the Teekay LNG MLP Agreement (as defined herein),
"Teekay LNG General Partner"), for itself and on behalf of Teekay LNG MLP in its
capacity as general partner, Teekay LNG Operating L.L.C., a Marshall Islands
limited liability company ("Teekay LNG OLLC"), Teekay LNG Partners L.P., a
Marshall Islands limited partnership ("Teekay LNG MLP"), Teekay Offshore GP
L.L.C., a Marshall Islands limited liability company (including any permitted
successors and assigns under the Teekay Offshore MLP Agreement (as defined
herein), "Teekay Offshore General Partner"), for itself and on behalf of the
Teekay Offshore MLP in its capacity as general partner, Teekay Offshore Partners
L.P., a Marshall Islands limited partnership ("Teekay Offshore MLP"), Teekay
Offshore Operating GP L.L.C., a Marshall Islands limited liability company
("Teekay Offshore Operating General Partner"), for itself and on behalf of
Teekay Offshore OLP in its capacity as general partner, and Teekay Offshore
Operating L.P., a Marshall Islands limited partnership ("Teekay Offshore OLP").

                                R E C I T A L S:

         1. Teekay, Teekay LNG General Partner, Teekay LNG OLLC and Teekay LNG
MLP are parties to the Omnibus Agreement dated as of May 10, 2005 (the "Original
Agreement") entered into in connection with the initial public offering of
common units by Teekay LNG MLP and pursuant to which such parties evidenced
their understandings with respect to various matters set forth therein.

         2. Teekay Offshore MLP proposes to undertake an initial public offering
of its common units and the Parties desire to enter into this Agreement to
evidence their understanding with respect to the various matters set forth
herein.

         3. The Conflicts Committee (as defined herein) of the board of
directors of Teekay LNG General Partner and the boards of directors of Teekay,
Teekay LNG General Partner and Teekay Offshore General Partner have approved the
amendment and restatement of the Original Agreement as set forth in this
Agreement.

         4. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Articles II, III and V, with
respect to (a) those business opportunities that the Teekay Entities (as defined
herein) will not pursue during the term of this Agreement and (b) the procedures
whereby such business opportunities are to be offered to the LNG Partnership
Group (as defined herein) or the Offshore Partnership Group (as defined herein),
as applicable, and accepted or declined.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT
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         5. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Articles II, IV and V, with
respect to (a) those business opportunities that the Offshore Partnership Group
will not pursue during the term of this Agreement and (b) the procedures whereby
such business opportunities are to be offered to Teekay or the LNG Partnership
Group, as applicable, and accepted or declined.

         6. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Articles III, IV and V, with
respect to (a) those business opportunities that the LNG Partnership Group will
not pursue during the term of this Agreement and (b) the procedures whereby such
business opportunities are to be offered to Teekay or the Offshore Partnership
Group, as applicable, and accepted or declined.

         7. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article VI, with respect to (a)
Teekay's right of first offer relating to certain Crude Oil Assets (as defined
herein), (b) Teekay LNG MLP's right of first offer relating to certain LNG
Assets (as defined herein) and (c) Teekay Offshore MLP's right of first offer
relating to certain Offshore Assets (as defined herein).

         8. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article VII, with respect to
certain indemnification obligations of Teekay.

         In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

                  1.1 DEFINITIONS.

         As used in this Agreement, the following terms shall have the
respective meanings set forth below:

         "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.

         "Aframax Assets" means the Aframax tankers included in Teekay Offshore
OLP as of the Offshore Closing Date and any Replacement Aframax Assets relating
to such original Aframax tankers.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

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         "Agreement" means this Amended and Restated Omnibus Agreement, as it
may be amended, modified, or supplemented from time to time in accordance with
Section 8.6 hereof.

         "Acquiring Party" has the meaning given such term in Section 5.1(a).

         "Bid LNG Assets" has the meaning given such term in Section 2.2(b).

         "Bid Offshore Assets" has the meaning given such term in Section
3.2(c).

         "Break-up Costs" means the aggregate amount of any and all additional
taxes and other similar costs to (a) the Teekay Entities or the Offshore
Partnership Group, as applicable, that would be required to transfer LNG Assets
acquired by the Teekay Entities or the Offshore Partnership Group as part of a
larger transaction to an LNG Partnership Group Member pursuant to Section
2.2(a), (b) the LNG Partnership Group or the Offshore Partnership Group, as
applicable, that would be required to transfer Crude Oil Assets acquired by the
LNG Partnership Group or the Offshore Partnership Group as part of a larger
transaction to a Teekay Entity pursuant to Section 4.2(c) or (c) the Teekay
Entities or the LNG Partnership Group, as applicable, that would be required to
transfer Offshore Assets acquired by the Teekay Entities or the LNG Partnership
Group as part of a larger transaction to an Offshore Partnership Group Member
pursuant to Section 3.2(b).

         "Change of Control" means, with respect to any Person (the "Applicable
Person"), any of the following events: (a) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the Applicable Person's assets to any other Person, unless
immediately following such sale, lease, exchange or other transfer such assets
are owned, directly or indirectly, by the Applicable Person; (b) the
consolidation or merger of the Applicable Person with or into another Person
pursuant to a transaction in which the outstanding Voting Securities of the
Applicable Person are changed into or exchanged for cash, securities or other
property, other than any such transaction where (i) the outstanding Voting
Securities of the Applicable Person are changed into or exchanged for Voting
Securities of the surviving Person or its parent and (ii) the holders of the
Voting Securities of the Applicable Person immediately prior to such transaction
own, directly or indirectly, not less than a majority of the outstanding Voting
Securities of the surviving Person or its parent immediately after such
transaction; and (c) a "person" or "group" (within the meaning of Sections 13(d)
or 14(d)(2) of the Exchange Act) (other than Teekay or its Affiliates, with
respect to Teekay LNG General Partner, Teekay Offshore General Partner or Teekay
Offshore OLP), being or becoming the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act) of more than 50% of all of the then
outstanding Voting Securities of the Applicable Person, except in a merger or
consolidation which would not constitute a Change of Control under clause (b)
above.

         "Conflicts Committee" means the Conflicts Committee of the board of
directors of Teekay LNG General Partner or Teekay Offshore General Partner, as
applicable.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

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         "Contribution Assets" means the LNG Contribution Assets or the Offshore
Contribution Assets, as applicable.

         "control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.

         "Covered Environmental Losses" means all environmental and toxic tort
Losses suffered or incurred by the LNG Partnership Group or the Offshore
Partnership Group, as applicable, by reason of or arising out of:

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

         (ii) any event or condition associated with ownership or operation by
the Teekay Entities of the LNG Contribution Assets, with respect to the LNG
Partnership Group, or the Offshore Contribution Assets, with respect to the
Offshore Partnership Group (including, without limitation, the presence of
Hazardous Substances on, under, about or migrating to or from the LNG
Contribution Assets or the Offshore Contribution Assets or the disposal or
release of Hazardous Substances generated by operation of the LNG Contribution
Assets or the Offshore Contribution Assets, as applicable), including, without
limitation, (A) 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, (B)
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 (C) 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 (i), or
such events or conditions included in clause (ii), occurred before the LNG
Closing Date, with respect to the LNG Contribution Assets, or the Offshore
Closing Date, with respect to the Offshore Contribution Assets; and provided
that in no event shall Losses to the extent arising from a change in any
Environmental Law after the LNG Closing Date or the Offshore Closing Date, as
applicable, be deemed "Covered Environmental Losses."

         "Crude Oil Assets" means crude oil tankers and related charters,
excluding any crude oil tankers and related charters that constitute Offshore
Assets.

         "Crude Oil Restricted Business" has the meaning given such term in
Section 4.1.

         "Environmental Laws" means all U.S. federal, state and local and all
foreign laws, statutes, rules, regulations, orders, judgments and ordinances
relating to protection of health and safety and the environment, including,
without limitation, the United States federal Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and Recovery
Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the
Toxic Substances Control Act, the Oil Pollution Act of 1990, the Hazardous

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

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Materials Transportation Act, the Marine Mammal Protection Act, the Endangered
Species Act, the National Environmental Policy Act, and other environmental
conservation and protection laws, each as amended through the LNG Closing Date
or the Offshore Closing Date, as applicable.

         "Event of Loss" means any of the following events: (a) the actual or
constructive total loss of a Suezmax Asset or an Aframax Asset or the agreed or
compromised total loss of a Suezmax Asset or an Aframax Asset; (b) the
destruction of a Suezmax Asset or an Aframax Asset; (c) the damage to a Suezmax
Asset or an Aframax Asset to an extent, determined in good faith by Teekay LNG
General Partner's Conflicts Committee, with respect to a Suezmax Asset, or
Teekay Offshore General Partner's Conflicts Committee, with respect to an
Aframax Asset, within 90 days after the occurrence of such damage, as shall make
repair thereof uneconomical or shall render such Suezmax Asset or Aframax Asset
permanently unfit for normal use (other than obsolescence); or (d) the
condemnation, confiscation, requisition, seizure, forfeiture or other taking of
title to or use of a Suezmax Asset or an Aframax Asset that shall not be revoked
within six months. An Event of Loss shall be deemed to have occurred: (i) in the
event of the destruction or other actual total loss of a Suezmax Asset or an
Aframax Asset, on the date of such loss; (ii) in the event of a constructive,
agreed or compromised total loss of a Suezmax Asset or an Aframax Asset, on the
date of determination of such total loss pursuant to the relevant insurance
policy; (iii) in the case of any event referred to in clause (c) above, upon
such determination by the applicable Conflicts Committee; or (iv) in the case of
any event referred in clause (d) above, on the date six months after the
occurrence of such event.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Existing Offshore Project Assets" means the following Offshore Assets:
two conventional crude oil tankers (the Navion Bergen and the Navion Gothenburg)
that Teekay currently is converting to shuttle tankers and one floating storage
and offtake unit (the Dampier Spirit) currently being upgraded.

         "First Offer Negotiation Period" has the meaning given such term in
Section 6.2.

         "Fully-Built-Up Cost"" means, with respect to an LNG Asset or an
Offshore Asset to be acquired or leased (pursuant to a capitalized lease
obligation) by an LNG Partnership Group Member or an Offshore Partnership Group
Member, respectively, the aggregate amount of all expenditures incurred (or to
be incurred prior to delivery to the LNG Partnership Group Member or the
Offshore Partnership Group Member) to acquire, construct and/or convert and
bring such LNG Asset or Offshore Asset to the condition and location necessary
for its intended use by the LNG Partnership Group Member or the Offshore
Partnership Group Member, as applicable, plus a reasonable allocation of
overhead costs related to the development of such project and other projects
that would have been subject to the offer rights set forth in this Agreement but
were not completed; provided, however, that in determining the Fully-Built-Up
Cost of an Offshore Asset that is constructed or converted using a hull from
Teekay's fleet (including the Existing Offshore Project Assets), such hull shall
be valued at its fair market value at the time of the vessel's

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

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transfer by Teekay and the Fully-Built-Up Cost of such Offshore Asset (other
than the hull) shall be determined as otherwise set forth in this definition.

         "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.

         "LNG" means liquefied natural gas.

         "LNG Assets" means LNG carriers and related time charters.

         "LNG Closing Date" means May 10, 2005, the date of the closing of the
initial public offering of common units representing limited partner interests
in Teekay LNG MLP.

         "LNG Contribution Agreement" means that certain Contribution,
Conveyance and Assumption Agreement, dated as of May 10, 2005, among Teekay,
Teekay LNG General Partner, Teekay LNG MLP, Teekay LNG OLLC and Teekay Shipping
Spain, S.L., together with the additional conveyance documents and instruments
contemplated or referenced thereunder.

         "LNG Contribution Assets" means the assets of the Teekay LNG
Partnership Group as of the LNG Closing Date.

         "LNG Partnership Entities" means Teekay LNG General Partner, Teekay LNG
MLP, Teekay LNG OLLC and any Person controlled by any such entity.

         "LNG Partnership Group" means Teekay LNG MLP, Teekay LNG OLLC and any
Person controlled by any such entity.

         "LNG Partnership Group Member" means any Person in the LNG Partnership
Group.

         "LNG Restricted Business" has the meaning given such term in Section
2.1.

         "Losses" means losses, damages, liabilities, claims, demands, causes of
action, judgments, settlements, fines, penalties, costs and expenses (including,
without limitation, court costs and reasonable attorneys' and experts' fees) of
any and every kind or character; provided, however, that such term shall not
include any special, indirect, incidental or consequential damages.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

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         "Offer" has the meaning given such term in Section 5.1(b).

         "Offered Assets" has the meaning given such term in Section 5.1(a).

         "Offeree" has the meaning given such term in Section 5.1(a).

         "Offer Period" has the meaning given such term in Section 5.1(e).

         "Offshore Assets" means (a) dynamically-positioned shuttle tankers
(excluding dynamically-positioned shuttle tankers that operate in conventional
crude oil tanker trades under Qualifying Contracts), (b) floating storage and
offtake units, (c) floating production, storage and offloading units and (d)
related time charters or contracts of affreightment.

         "Offshore Closing Date" means the date of the closing of the initial
public offering of common units representing limited partner interests in Teekay
Offshore MLP.

         "Offshore Contribution Agreement" means that certain Contribution,
Conveyance and Assumption Agreement, dated as of the Offshore Closing Date,
among Teekay, Teekay Offshore General Partner, Teekay Offshore MLP, Teekay
Offshore OLP and Teekay Offshore Operating General Partner, together with the
additional conveyance documents and instruments contemplated or referenced
thereunder.

         "Offshore Contribution Assets" means the assets of Teekay Offshore OLP
as of the Offshore Closing Date.

         "Offshore Partnership Entities" means Teekay Offshore General Partner,
Teekay Offshore MLP, Teekay Offshore Operating General Partner, Teekay Offshore
OLP and any Person controlled by any such entity.

         "Offshore Partnership Group" means Teekay Offshore MLP, Teekay Offshore
Operating General Partner, Teekay Offshore OLP and any Person controlled by any
such Person.

         "Offshore Partnership Group Member" means any Person in the Offshore
Partnership Group.

         "offshore project" means any project involving the marine
transportation, production, processing or storage of crude oil using Offshore
Assets.

         "Offshore Restricted Business" has the meaning given such term in
Section 3.1.

         "Original Agreement" is defined in the recitals to this Agreement.

         "Parties" means the parties to this Agreement and their successors and
permitted assigns.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

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         "Petrojarl" means Petrojarl ASA, a Norwegian company of which Teekay
owns a majority of its outstanding capital stock as of the date of this
Agreement.

         "Petrojarl Excluded Assets" has the meaning given such term in Section
3.2(h).

         "Petrojarl Joint Venture Agreement" means the Joint Venture Partners'
Agreement dated June 14, 2006 among Petrojarl JV AS, Teekay Petrojarl Offshore
Holdings L.L.C. and Teekay Petrojarl GP L.L.C., as it may be amended, modified,
or supplemented from time to time.

         "Person" means an individual, corporation, partnership, joint venture,
trust, limited liability company, unincorporated organization or any other
entity.

         "Potential Transferee" has the meaning given such term in Section 6.2.

         "Qualifying Contract" means a time charter or contract of affreightment
with a remaining duration, excluding any extension options, of at least three
years. For purposes of this definition, the duration of any life-of-field
contract of affreightment shall be deemed to equal the expected remaining life
of the relevant oil field as determined by Wood Mackenzie Ltd., or, if Wood
Mackenzie is not available, another reasonably suitable independent entity
qualified to estimate the remaining life of the relevant oil field.

         "Qualifying Petrojarl Joint Venture Offshore Projects" means projects
subject to the Petrojarl Joint Venture Agreement that involve Offshore Assets
that are subject to a Qualifying Contract.

         "Re-Charter" means the chartering-out of an LNG Asset, an Offshore
Asset or a Crude Oil Asset pursuant to a Qualifying Contract in the event that
its existing charter or contract of affreightment expires or is terminated early
(including, without limitation, the chartering of any Replacement Suezmax Asset
or Replacement Aframax Asset but only if the charter party for the Replacement
Suezmax Asset or Replacement Aframax Asset, as applicable, is not the same
charter party (or an Affiliate of such charter party) as for the replaced
Suezmax Asset or Aframax Asset).

         "Replacement Aframax Assets" means any Aframax tankers that replace any
Afraxmax Assets upon (a) an Event of Loss or (b) the replacement of a
time-charter arrangement existing as of the Offshore Closing Date where the
original Aframax Asset which was subject to such time charter has been sold or
transferred due to the exercise by the charter party of its right under the time
charter to cause such sale or transfer.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

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         "Replacement Suezmax Assets" means any Suezmax tankers that replace any
Suezmax Assets upon (a) an Event of Loss or (b) the replacement of a
time-charter arrangement existing as of the LNG Closing Date where the original
Suezmax Asset which was subject to such time charter has been sold or
transferred due to the exercise by the charter party of its right under the time
charter to cause such sale or transfer.

         "Restricted Business" means, as applicable, the LNG Restricted
Business, the Offshore Restricted Business or the Crude Oil Restricted Business.

         "Retained Assets" means all right, title and interest in and to assets
other than (a) the LNG Contribution Assets or (b) the Offshore Contribution
Assets, as applicable.

         "Retained Liabilities" means any and all liabilities and obligations of
any and every kind or character not assumed by (a) the LNG Partnership Group
pursuant to the LNG Contribution Agreement or (b) the Offshore Partnership Group
pursuant to the Offshore Contribution Agreement, as applicable.

         "Sale Assets" has the meaning given such term in Section 6.2.

         "Suezmax Assets" means the Suezmax tankers included in the LNG
Contribution Assets and any Replacement Suezmax Assets relating to such original
Suezmax tankers.

         "Teekay" is defined in the introduction to this Agreement.

         "Teekay Entities" means Teekay and any Person controlled, directly or
indirectly, by Teekay other than the LNG Partnership Entities and the Offshore
Partnership Entities.

         "Teekay LNG General Partner" is defined in the introduction to this
Agreement.

         "Teekay LNG MLP" is defined in the introduction to this Agreement.

         "Teekay LNG MLP Agreement" means the First Amended and Restated
Agreement of Limited Partnership of the Teekay LNG MLP, dated as of May 10,
2005, as amended by Amendment No. 1 dated as of May 31, 2006, as such agreement
is in effect on the Offshore Closing Date, to which reference is hereby made for
all purposes of this Agreement. No amendment or modification to the Teekay LNG
MLP Agreement subsequent to the Offshore Closing Date shall be given effect for
purposes of this Agreement unless consented to by each of the Parties to this
Agreement.

         "Teekay LNG OLLC" is defined in the introduction to this Agreement.

         "Teekay Offshore General Partner" is defined in the introduction to
this Agreement.

         "Teekay Offshore MLP" is defined in the introduction to this Agreement.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -9-
<PAGE>

         "Teekay Offshore MLP Agreement" means the First Amended and Restated
Agreement of Limited Partnership of the Teekay Offshore MLP, dated as of the
Offshore Closing Date, as such agreement is in effect on the Offshore Closing
Date, to which reference is hereby made for all purposes of this Agreement. No
amendment or modification to the Teekay Offshore MLP Agreement subsequent to the
Offshore Closing Date shall be given effect for purposes of this Agreement
unless consented to by each of the Parties to this Agreement.

         "Teekay Offshore OLP" is defined in the introduction to this Agreement.

         "Teekay Offshore Operating General Partner" is defined in the
introduction to this Agreement.

         "Transfer" means any transfer, assignment, sale or other disposition of
(a) any LNG Assets by a Teekay Entity or an Offshore Partnership Group Member,
(b) any Offshore Assets by a Teekay Entity or an LNG Partnership Group Member,
or (c) any Crude Oil Assets by an LNG Partnership Group Member or an Offshore
Partnership Group Member; provided, however, that such term shall not include:
(i) transfers, assignments, sales or other dispositions from a Teekay Entity to
another Teekay Entity, from an LNG Partnership Group Member to another LNG
Partnership Group Member or from an Offshore Partnership Group Member to another
Offshore Partnership Group Member; (ii) transfers, assignments, sales or other
dispositions pursuant to the terms of any related charter, contract of
affreightment or other agreement with a charter party or the party to the
contract of affreightment, as applicable; (iii) transfers, assignments, sales or
other dispositions pursuant to Article II, III or IV of this Agreement; (iv)
grants of security interests in or mortgages or liens on such LNG Assets,
Offshore Assets or Crude Oil Assets in favor of a bona fide third-party lender
(but not the foreclosing of any such security interest, mortgage or lien); or
(v) transfers, assignments, sales or other dispositions by a Teekay Entity
(other than Petrojarl or any Person controlled thereby) of any Offshore Assets
it owns as of the date of this agreement if, at the time of the proposed
transfer, assignment, sale or other disposition, the applicable Offshore Asset
is not subject to a Qualifying Contract.

         "Transfer Notice" has the meaning given such term in Section 6.2.

         "Transferring Party" has the meaning given such term in Section 6.2.

         "Voting Securities" means securities of any class of Person entitling
the holders thereof to vote in the election of members of the board of directors
or other similar governing body of the Person.

                                   ARTICLE II
                      LNG RESTRICTED BUSINESS OPPORTUNITIES

         2.1 LNG RESTRICTED BUSINESSES. Subject to Section 8.4 and except as
permitted by Section 2.2, each of the Teekay Entities and the Offshore
Partnership Group Members shall

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -10-
<PAGE>

be prohibited from engaging in or acquiring or investing in any business that
owns, operates or charters LNG Assets (each an "LNG Restricted Business").

         2.2 PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 2.1
to the contrary, the Teekay Entities and the Offshore Partnership Group Members
may engage in the following activities under any of the following circumstances:

                  (a) the ownership, operation and/or chartering of any LNG
Assets that they acquire after the date of this Agreement if:

                           (i) such LNG Assets are acquired as part of a
         business or package of assets in a transaction in which the fair market
         value of such LNG Assets represents less than a majority of the fair
         market value of the total assets or business acquired (fair market
         value as determined in good faith by the board of directors of Teekay
         or Teekay Offshore General Partner's Conflicts Committee, as
         applicable); and

                           (ii) the Teekay Entity or the Offshore Partnership
         Group Member has offered Teekay LNG General Partner the opportunity for
         any of the Teekay LNG Partnership Group Members to purchase such LNG
         Assets in accordance with the procedures set forth in Section 5.1 and
         Teekay LNG General Partner, with the approval of Teekay LNG General
         Partner's Conflicts Committee, has elected not to cause any Teekay LNG
         Partnership Group Member to purchase such LNG Assets;

                  (b) the ownership, operation and/or chartering of LNG Assets
that (i) are subject to an offer to purchase by a Teekay Entity or an Offshore
Partnership Group Member as described in Section 2.2(a)(ii) or (ii) subject to
Section 5.1, relate to a tender, bid or award for a proposed LNG project that a
Teekay Entity has submitted or received (or hereafter submits or receives) (such
LNG Assets in clause (ii) being referred to herein as "Bid LNG Assets"), in each
case pending the applicable offer of such LNG Assets to Teekay LNG General
Partner and Teekay LNG General Partner's determination pursuant to Section 5.1
whether to purchase the LNG Assets and, if Teekay LNG General Partner's
Conflicts Committee determines to cause a Teekay LNG Partnership Group Member to
purchase such LNG Assets, pending the closing of such purchase;

                  (c) the provision by Teekay Entities of ship management
services relating to an LNG Restricted Business;

                  (d) the acquisition of up to a 9.9% equity ownership, voting
or profit participation interest in any publicly traded Person (other than
Teekay LNG MLP) that engages in an LNG Restricted Business;

                  (e) the ownership, operation and/or chartering of any LNG
Assets with respect to which Teekay LNG General Partner has advised Teekay or
Teekay Offshore General Partner, as applicable, that Teekay LNG General Partner
has elected, with the approval of Teekay LNG

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -11-
<PAGE>

General Partner's Conflicts Committee, not to cause a Teekay LNG Partnership
Group Member to acquire (or seek to acquire); or

                  (f) the ownership, operation and/or chartering by Teekay
Entities of the LNG Assets subject to the Nakilat Share Purchase Agreement dated
as of May 10, 2005, between Teekay and Teekay LNG MLP if the Teekay LNG MLP
fails to perform its obligations to purchase (or to cause other Teekay LNG
Partnership Group Members to purchase) such LNG Assets under such agreement.

                                   ARTICLE III
                   OFFSHORE RESTRICTED BUSINESS OPPORTUNITIES

         3.1 OFFSHORE RESTRICTED BUSINESSES. Subject to Section 8.4 and except
as permitted by Section 3.2, each of the Teekay Entities and the LNG Partnership
Group Members shall be prohibited from engaging in or acquiring or investing in
any business that owns, operates or charters Offshore Assets (each an "Offshore
Restricted Business"); provided, however, that, subject to Section 6.1, nothing
in this Agreement shall prohibit the LNG Partnership Group Members from owning,
operating or chartering any Suezmax Assets that are hereafter converted into
Offshore Assets.

         3.2 PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 3.1
to the contrary, the Teekay Entities and the LNG Partnership Group Members may
engage in the following activities under any of the following circumstances:

                  (a) the ownership, operation and/or chartering of Offshore
Assets that are not subject to a Qualifying Contract;

                  (b) the ownership, operation and/or chartering of any Offshore
Assets that they acquire after the date of this Agreement if:

                           (i) such Offshore Assets are acquired as part of a
         business or package of assets in a transaction in which the fair market
         value of such Offshore Assets represents less than a majority of the
         fair market value of the total assets or business acquired (fair market
         value as determined in good faith by the board of directors of Teekay
         or Teekay LNG General Partner's Conflicts Committee, as applicable);
         and

                           (ii) the Teekay Entity or the LNG Partnership Group
         Member has offered Teekay Offshore General Partner the opportunity for
         any of the Teekay Offshore Partnership Group Members to purchase such
         Offshore Assets in accordance with the procedures set forth in Section
         5.1 and Teekay Offshore General Partner, with the approval of Teekay
         Offshore General Partner's Conflicts Committee, has elected not to
         cause any Teekay Offshore Partnership Group Member to purchase such
         Offshore Assets;

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -12-
<PAGE>

                  (c) the ownership, operation and/or chartering of Offshore
Assets that (i) are subject to an offer to purchase by a Teekay Entity or an LNG
Partnership Group Member as described in Section 3.2(b)(ii), or (ii) subject to
Section 5.1, relate to a tender, bid or award for a proposed offshore project
that a Teekay Entity has submitted or received (or hereafter submits or
receives), including Qualifying Petrojarl Joint Venture Offshore Projects and
the Existing Offshore Project Assets (such Offshore Assets in clause (ii) being
referred to herein as "Bid Offshore Assets"), in each case pending the
applicable offer of such Offshore Assets to Teekay Offshore General Partner and
Teekay Offshore General Partner's determination pursuant to Section 5.1 whether
to purchase the Offshore Assets and, if Teekay Offshore General Partner's
Conflicts Committee determines to cause a Teekay Offshore Partnership Group
Member to purchase such Offshore Assets, pending the closing of such purchase;

                  (d) the provision by Teekay Entities of ship management
services relating to an Offshore Restricted Business;

                  (e) the acquisition of up to a 9.9% equity ownership, voting
or profit participation interest in any publicly traded Person that engages in
an Offshore Restricted Business;

                  (f) the ownership, operation and/or chartering of any Offshore
Assets with respect to which Teekay Offshore General Partner has advised Teekay
or Teekay LNG General Partner, as applicable, that Teekay Offshore General
Partner has elected, with the approval of Teekay Offshore General Partner's
Conflicts Committee, not to cause a Teekay Offshore Partnership Group Member to
acquire (or seek to acquire);

                  (g) the ownership by Teekay Entities of (i) a limited
partnership interest in Teekay Offshore OLP, (ii) interests in Teekay Offshore
MLP and (iii), subject to Section 3.2(h), interests in Petrojarl;

                  (h) (i) prior to Teekay Entities owning 100% of Petrojarl, the
ownership, operation and/or chartering by Petrojarl or its controlled affiliates
of (A) the Offshore Assets owned, operated and/or chartered by Petrojarl or its
controlled affiliates as of the Offshore Closing Date ("Petrojarl Excluded
Assets") or (B) interests in Qualifying Petrojarl Joint Venture Offshore
Projects and (ii) subject to Section 5.1, following the acquisition by the
Teekay Entities of 100% of Petrojarl, the ownership, operation and/or chartering
by Petrojarl or its controlled affiliates of Offshore Assets then subject to
Qualifying Contracts (including interests in Qualifying Petrojarl Joint Venture
Offshore Projects) pending the applicable offer of such Offshore Assets to
Teekay Offshore General Partner and Teekay Offshore General Partner's
determination pursuant to Section 5.1 whether to purchase such Offshore Assets
and, if Teekay Offshore General Partner's Conflicts Committee determines to
cause an Offshore Partnership Group Member to purchase such Offshore Assets,
pending the closing of such purchase.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -13-
<PAGE>

                                   ARTICLE IV
                   CRUDE OIL RESTRICTED BUSINESS OPPORTUNITIES

         4.1 CRUDE OIL RESTRICTED BUSINESSES. Subject to Section 8.4 and except
as permitted by Section 4.2, each LNG Partnership Group Member and each Offshore
Partnership Group Member shall be prohibited from engaging in or acquiring or
investing in any business that owns, operates or charters Crude Oil Assets (each
a "Crude Oil Restricted Business").

         4.2 PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 4.1
to the contrary, the LNG Partnership Group Members and the Offshore Partnership
Group Members may engage in the following activities under any of the following
circumstances:

                  (a) the LNG Partnership Group Members may engage in the
ownership, operation and/or chartering of any of the Suezmax Assets, including
any Replacement Suezmax Assets;

                  (b) the Offshore Partnership Group Members may engage in the
ownership, operation and/or chartering of any of the Aframax Assets, including
any Replacement Aframax Assets;

                  (c) the ownership, operation and/or chartering of any Crude
Oil Assets that it acquires after the date of this Agreement if:

                           (i) such Crude Oil Assets are acquired as part of a
         business or package of assets in a transaction in which the fair market
         value of such Crude Oil Assets represents less than a majority of the
         fair market value of the total assets or business acquired (fair market
         value as determined in good faith by the Conflicts Committee of the
         board of directors of Teekay LNG General Partner or Teekay Offshore
         General Partner, as applicable); and

                           (ii) the LNG Partnership Group Member or Offshore
         Partnership Group Member, as applicable, has offered Teekay the
         opportunity for Teekay or any other Teekay Entity to purchase such
         Crude Oil Assets in accordance with the procedures set forth in Section
         5.1 and Teekay has elected not to purchase and not to cause another
         Teekay Entity to purchase such Crude Oil Assets;

                  (d) the ownership, operation and/or chartering of Crude Oil
Assets that are subject to an offer by an LNG Partnership Group Member or an
Offshore Partnership Group Member as described in Section 4.2(c) pending
Teekay's determination whether to purchase the Crude Oil Assets and, if Teekay
determines to cause a Teekay Entity to purchase such Crude Oil Assets, pending
the closing of such purchase;

                  (e) the acquisition of up to a 9.9% equity ownership, voting
or profit participation interest in any publicly traded Person that engages in a
Crude Oil Restricted Business; or

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -14-
<PAGE>

                  (f) the ownership, operation and/or chartering by an LNG
Partnership Group Member or an Offshore Partnership Group Member of any Crude
Oil Assets with respect to which Teekay has previously advised Teekay LNG
General Partner or Teekay Offshore General Partner, as applicable, that Teekay
has elected not to cause a Teekay Entity to acquire (or seek to acquire).

                                    ARTICLE V
                        BUSINESS OPPORTUNITIES PROCEDURES

         5.1 PROCEDURES. (a) In the event that (i) an LNG Partnership Group
Member or an Offshore Partnership Group Member acquires Crude Oil Assets as part
of a larger transaction in accordance with Section 4.2(c), (ii) a Teekay Entity
or an Offshore Partnership Group Member acquires LNG Assets as part of a larger
transaction in accordance with Section 2.2(a), (iii) a Teekay Entity or an LNG
Partnership Group Member acquires Offshore Assets as part of a larger
transaction in accordance with Section 3.2(b), (iv) a Teekay Entity is awarded a
contract for the transportation requirements for all or any portion of any
proposed LNG project or offshore project for which a Teekay Entity has tendered
or submitted a bid (and, with respect to Offshore Assets, the contract is a
Qualifying Contract), including, without limitation, the projects to be served
by the Existing Offshore Project Assets, (v) the Teekay Entities acquire 100%
ownership of Petrojarl or (vi) a Teekay Entity proposes to Re-Charters any LNG
Assets or Offshore Assets (including any Petrojarl Excluded Assets once the
Teekay entities acquire 100% ownership of Petrojarl), then:

                  (x) in the case of clause (i), (ii), (iii), (v) or (vi) above,
         not later than 30 days after the consummation of the acquisition or the
         proposed Re-Chartering of any Offshore Assets; provided, however, that
         such period shall be 365 days for acquisitions of Offshore Assets by
         any Teekay Entities or any LNG Partnership Group Members or the
         acquisition of 100% ownership of Petrojarl by any Teekay Entities; or

                  (y) in the case of clause (iv) above, not later than 180 days
         before the scheduled delivery date of the relevant Bid LNG Asset or 365
         days after the delivery date of the relevant Bid Offshore Asset,

such acquiring party or such party proposing to Re-Charter the LNG Assets or
Offshore Assets (as applicable, the "Acquiring Party") shall notify (A) Teekay,
in the case of an acquisition by an LNG Partnership Group Member or an Offshore
Partnership Group Member of Crude Oil Assets, (B) Teekay LNG General Partner, in
the case of (x) an acquisition by a Teekay Entity or an Offshore Partnership
Group Member of LNG Assets, (y) a proposed acquisition of Bid LNG Assets or (z)
the proposed Re-Chartering by a Teekay Entity of LNG Assets or (C) Teekay
Offshore General Partner, in the case of (w) an acquisition by a Teekay Entity
or an LNG Partnership Group Member of Offshore Assets, (x) a proposed
acquisition of Bid Offshore Assets, (y) the acquisition of 100% ownership of
Petrojarl or (z) the proposed Re-Chartering by a Teekay Entity of Offshore
Assets, in each case of such acquisition (or proposed acquisition) or proposed
Re-Chartering, and offer such party to be notified (each an "Offeree") the
opportunity

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -15-
<PAGE>

for the Offeree (or, in the case of Teekay, Teekay LNG General Partner or Teekay
Offshore General Partner, any other Teekay Entity, LNG Partnership Group Member
or Teekay Offshore Partnership Group Member, respectively) to purchase such
Crude Oil Assets, LNG Assets, Bid LNG Assets, Bid Offshore Assets or Offshore
Assets, including, with respect to Petrojarl, Offshore Assets subject to
Qualifying Contracts at the time Teekay acquires 100% ownership of Petrojarl
(including any Petrojarl interest in a joint venture that owns, operates or
charters an Offshore Asset subject to a Qualifying Contract), as applicable (the
"Offered Assets").

                  (b) The purchase price for any Offered Assets pursuant to
Section 5.1(a) above shall be (i) the Offered Assets' fair market value (plus
any Break-up Costs), in the case of Section 5.1(a)(i), (ii), (iii), (v) or (vi)
or (ii) the Offered Assets' Fully-Built-Up Cost, in the case of Section
5.1(a)(iv) or for Existing Offshore Project Assets, in each case on commercially
reasonable terms in accordance with this Section (the "Offer").

                  (c) The Offer shall set forth the Acquiring Party's proposed
terms relating to the purchase of the Offered Assets by the Offeree (or, in the
case of Teekay, Teekay LNG General Partner or Teekay Offshore General Partner,
any other Teekay Entity, LNG Partnership Group Member or Offshore Partnership
Group Member, respectively), including any liabilities to be assumed by the
Offeree as part of the Offer.

                  (d) As soon as practicable after the Offer is made, the
Acquiring Party will deliver to the Offeree all information prepared by or on
behalf of or in the possession of such Acquiring Party relating to the Offered
Assets and reasonably requested by the Offeree. As soon as practicable, but in
any event, within 90 days after receipt of such notification (30 days in the
case of a proposed Re-Chartering of LNG Assets or Offshore Assets), the Offeree
shall notify the Acquiring Party in writing that either:

                           (i) the Offeree (with the concurrence of the
         applicable Conflicts Committee if the Offeree is Teekay LNG General
         Partner or Teekay Offshore General Partner) has elected not to purchase
         (or not to cause any of its permitted Affiliates to purchase) such
         Offered Assets, in which event the Acquiring Party and its Affiliates
         shall, subject to the other terms of this Agreement (including, without
         limitation, this Section 5.1 and Article VI in connection with any
         subsequently proposed Re-Chartering by a Teekay Entity of any LNG
         Assets or Offshore Assets), be forever free to continue to own, operate
         and charter such Offered Assets or, with respect to any proposed
         Re-Chartering of LNG Assets or Offshore Assets, be free to Re-Charter
         the LNG Assets or Offshore Assets in such instance as provided in
         Article VI; or

                           (ii) the Offeree (with the concurrence of the
         applicable Conflicts Committee if the Offeree is Teekay LNG General
         Partner or Teekay Offshore General Partner) has elected to purchase (or
         to cause any of its permitted Affiliates to purchase) such Offered
         Assets, in which event the procedures set forth in Section 5.1(e) below
         shall be followed.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -16-
<PAGE>

                  (e) In the event of a proposed purchase pursuant to Section
5.1(d)(ii):

                           (i) After the receipt of the Offer by the Offeree,
         the Acquiring Party and the Offeree shall determine the fair market
         value (and any Break-up Costs) or the Fully-Built-Up Cost, as
         applicable, of the Offered Assets that are subject to the Offer and the
         other terms of the Offer on which the Offered Assets will be sold to
         the Offeree. If the Acquiring Party and the Offeree agree (with the
         concurrence of the applicable Conflicts Committee) on the fair market
         value (and any Break-up Costs) or the Fully-Built-Up Cost, as
         applicable, of the Offered Assets that are subject to the Offer and the
         other terms of the Offer during the 30-day period after receipt by the
         Acquiring Party of the Offeree's election to purchase (or to cause any
         permitted Affiliate of the Offeree to purchase) the Offered Assets (the
         "Offer Period"), the Offeree shall purchase (or cause any of its
         permitted Affiliates to purchase) the Offered Assets on such terms as
         soon as commercially practicable after such agreement has been reached.

                           (ii) If the Acquiring Party and the Offeree are
         unable to agree on the fair market value (and any Break-up Costs) or
         the Fully-Built-Up Cost, as applicable, of the Offered Assets that are
         subject to the Offer or on any other terms of the Offer during the
         Offer Period, the Acquiring Party and the Offeree will engage an
         independent ship broker and/or an independent investment banking firm
         prior to the end of the Offer Period to determine the fair market value
         (and any Break-up Costs) or the Fully-Built-Up Cost, as applicable, of
         the Offered Assets and/or the other terms on which the Acquiring Party
         and the Offeree are unable to agree. In determining the fair market
         value or the Fully-Built-Up Cost of the Offered Assets and other terms
         on which the Offered Assets are to be sold, the ship broker or
         investment banking firm, as applicable, will have access to the
         proposed sale and purchase values and terms for the Offer submitted by
         the Acquiring Party and the Offeree, respectively, and to all
         information prepared by or on behalf of the Acquiring Party relating to
         the Offered Assets and reasonably requested by such ship broker or
         investment banking firm. Such ship broker or investment banking firm
         will determine the fair market value (and any Break-up Costs) or
         Fully-Built-Up Cost of the Offered Assets and/or the other terms on
         which the Acquiring Party and the Offeree are unable to agree within 60
         days of its engagement and furnish the Acquiring Party and the Offeree
         its determination. The fees and expenses of the ship broker or
         investment banking firm, as applicable, will be divided equally between
         the Acquiring Party and the Offeree. Upon receipt of such
         determination, the Offeree will have the option, but not the
         obligation, to (with the concurrence of the applicable Conflicts
         Committee if the Offeree is Teekay LNG General Partner or Teekay
         Offshore General Partner):

                                    (x) purchase the Offered Assets for the fair
                  market value (and any Break-up Costs) or Fully-Built-Up Cost,
                  as applicable, and on the other terms determined by the ship
                  broker or investment banking firm, as soon as commercially
                  practicable after determinations have been made; or

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -17-
<PAGE>

                                    (y) elect not to purchase such Offered
                  Assets, in which event the Acquiring Party and its Affiliates
                  shall, subject to the other terms of this Agreement
                  (including, without limitation, this Section 5.1 and Article
                  VI in connection with any subsequently proposed Re-Chartering
                  by a Teekay Entity of any LNG Assets or Offshore Assets), be
                  forever free to continue to own, operate and/or charter such
                  Offered Assets or, with respect to any proposed Re-Chartering
                  of LNG Assets or Offshore Assets, be free to Re-Charter the
                  LNG Assets or Offshore Assets in such instance as provided in
                  Article VI.

         5.2 SCOPE OF PROHIBITION. If any Party or its Affiliates engages in a
Restricted Business pursuant to any of the exceptions described in Section 2.2,
3.2 or 4.2, as applicable, the Party and its Affiliates may not subsequently
expand that portion of their business other than pursuant to the exceptions
contained in such Sections 2.2, 3.2 or 4.2. Except as otherwise provided in this
Agreement, the Teekay LNG MLP Agreement and the Teekay Offshore MLP Agreement,
each Party and its Affiliates shall be free to engage in any business activity
whatsoever, including those that may be in direct competition with the Teekay
Entities, the LNG Partnership Group or the Offshore Partnership Group.

         5.3 ENFORCEMENT. Each Party agrees and acknowledges that the other
Parties do not have an adequate remedy at law for the breach by any such Party
of its covenants and agreements set forth in this Article V, and that any breach
by any such Party of its covenants and agreements set forth in this Article V
would result in irreparable injury to such other Parties. Each Party further
agrees and acknowledges that any other Party may, in addition to the other
remedies which may be available to such other Party, file a suit in equity to
enjoin such Party from such breach, and consent to the issuance of injunctive
relief to enforce the provisions of this Article V of this Agreement.

                                   ARTICLE VI
                              RIGHTS OF FIRST OFFER

         6.1      RIGHTS OF FIRST OFFER.

                  (a) The LNG Partnership Group hereby grants (i) Teekay a right
of first offer on any proposed Transfer or Re-Charter by any LNG Partnership
Group Member of any Crude Oil Assets owned or acquired by any LNG Partnership
Group Member and (ii) Teekay Offshore MLP a right of first offer on any proposed
Transfer or Re-Charter by any LNG Partnership Group Member of any Offshore
Assets owned or acquired by any LNG Partnership Group Member. The Offshore
Partnership Group hereby grants (i) Teekay a right of first offer on any
proposed Transfer or Re-Charter by any Offshore Partnership Group Member of any
Crude Oil Assets owned or acquired by any Offshore Partnership Group Member and
(ii) Teekay LNG General Partner a right of first offer on any proposed Transfer
or Re-Charter by any Offshore Partnership Group Member of any LNG Assets owned
or acquired by any Offshore Partnership Group Member. The Teekay Entities hereby
grant (i) Teekay LNG MLP a right of first offer on any proposed Transfer or,
subject to Section 5.1, Re-Charter of any LNG Assets owned or

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -18-
<PAGE>

acquired by any Teekay Entity and (ii) Teekay Offshore MLP a right of first
offer on any proposed Transfer or, subject to Section 5.1, Re-Charter of any
Offshore Assets owned or acquired by any Teekay Entity.

                  (b) The Parties acknowledge that all potential Transfers or
Re-Charters of Crude Oil Assets, LNG Assets or Offshore Assets pursuant to this
Article VI are subject to obtaining any and all written consents of governmental
authorities and other non-affiliated third parties and to the terms of all
existing agreements in respect of such Crude Oil Assets, LNG Assets or Offshore
Assets, as applicable.

         6.2 PROCEDURES FOR RIGHTS OF FIRST OFFER. In the event that an LNG
Partnership Group Member, an Offshore Partnership Group Member or a Teekay
Entity (as applicable, the "Transferring Party") proposes to Transfer or
Re-Charter any Crude Oil Assets, LNG Assets or Offshore Assets, as applicable
(the "Sale Assets"), prior to engaging in any negotiation for such Transfer or
Re-Charter with any non-affiliated third party or otherwise offering to Transfer
or Re-Charter the Sale Assets to any non-affiliated third party, such
Transferring Party shall give Teekay, Teekay LNG MLP or Teekay Offshore MLP, as
applicable (the "Potential Transferee"), written notice setting forth all
material terms and conditions (including, without limitation, the purchase price
(in the event of a Transfer) or the terms of the charter agreement (in the event
of a Re-Charter) and a description of the Sale Asset(s) on which such
Transferring Party desires to Transfer or Re-Charter the Sale Assets (the
"Transfer Notice"). The material terms set forth in the Transfer Notice shall
have been approved, in any case where an LNG Partnership Group Member or an
Offshore Partnership Group Member is the Transferring Party, by the applicable
Conflicts Committee of Teekay LNG General Partner or Teekay Offshore General
Partner. Subject to Section 5.1 with respect to any proposed Re-Charter by a
Teekay Entity of any LNG Assets or Offshore Assets, the Transferring Party then
shall be obligated to negotiate in good faith for a 30-day period following the
delivery by the Transferring Party of the Transfer Notice (the "First Offer
Negotiation Period") to reach an agreement for the Transfer or Re-Charter of
such Sale Assets to the Potential Transferee or any of its Affiliates on the
terms and conditions set forth in the Transfer Notice. Subject to Section 5.1
with respect to any proposed Re-Charter by a Teekay Entity of any LNG Assets or
Offshore Assets, if no such agreement with respect to the Sale Assets is reached
during the First Offer Negotiation Period, and the Transferring Party has not
Transferred or Re-Chartered, or agreed in writing to Transfer or Re-Charter,
such Sale Assets to a third party within 180 days after the end of the First
Offer Negotiation Period on terms generally no less favorable to the
Transferring Party than those included in the Transfer Notice, then the
Transferring Party shall not thereafter Transfer or Re-Charter any of the Sale
Assets without first offering such assets to the applicable Potential Transferee
in the manner provided above.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -19-
<PAGE>

                                   ARTICLE VII
                                 INDEMNIFICATION

         7.1 TEEKAY INDEMNIFICATION. Subject to the provisions of Section 7.2
and Section 7.3, Teekay shall indemnify, defend and hold harmless the LNG
Partnership Group and the Offshore Partnership Group, respectively, from and
against: (a) any Covered Environmental Losses relating to the applicable
Contribution Assets and events, circumstances or conditions existing prior to or
on the LNG Closing Date or the Offshore Closing Date, respectively, to the
extent that Teekay is notified by Teekay LNG General Partner or Teekay Offshore
General Partner of any such Covered Environmental Losses within five (5) years
after the LNG Closing Date or the Offshore Closing Date, as applicable; (b)
Losses to the Teekay LNG Partnership Group or the Teekay Offshore Partnership
Group, as applicable, arising from (i) the failure of (A) the LNG Partnership
Group, immediately after the LNG Closing Date, or (B) the Offshore Partnership
Group, immediately after the Offshore Closing Date, to be the owner of such
valid leasehold interests or fee ownership interests in and to the applicable
Contribution Assets as are necessary to enable the LNG Partnership Entities or
the Offshore Partnership Entities to own and operate such Contribution Assets in
substantially the same manner that such Contribution Assets were owned and
operated by the Teekay Entities immediately prior to the LNG Closing Date or the
Offshore Closing Date, as applicable, or (ii) the failure of (A) the LNG
Partnership Entities to have on the LNG Closing Date or (B) the Offshore
Partnership Entities to have on the Offshore Closing Date, as applicable, any
consent or governmental permit necessary to allow the LNG Partnership Entities
or the Offshore Partnership Entities, as applicable, to own or operate the
applicable Contribution Assets in substantially the same manner that such
Contribution Assets were owned and operated by the Teekay Entities immediately
prior to the LNG Closing Date or the Offshore Closing Date, as applicable, in
each of clauses (i) and (ii) above, to the extent that Teekay is notified by
Teekay LNG General Partner or Teekay Offshore General Partner of such Losses
within three (3) years after the LNG Closing Date or the Offshore Closing Date,
as applicable; (c) all U.S. federal, state and local and all foreign income tax
liabilities attributable to the operation of the applicable Contribution Assets
prior to the LNG Closing Date or the Offshore Closing Date, as applicable,
including any such income tax liabilities of the Teekay Entities that may result
from the consummation of the formation transactions for the LNG Partnership
Group and Teekay LNG General Partner or the Offshore Partnership Group and
Teekay Offshore General Partner, as applicable, but excluding any U.S. federal,
state and local and any foreign income taxes reserved on the books of the LNG
Partnership Group on the LNG Closing Date or of the Offshore Partnership Group
as of the Offshore Closing Date; (d) any events or conditions attributable to or
associated with ownership or operation of the Retained Assets, whether occurring
before or after the LNG Closing Date or the Offshore Closing Date; and (e) any
Retained Liabilities.

         7.2      LIMITATION REGARDING INDEMNIFICATION.

         (a) The aggregate liability of Teekay under Section 7.1(a) above in
connection with the LNG Partnership Group and the LNG Contribution Assets shall
not exceed $10 million.

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -20-
<PAGE>

Furthermore, no claim may be made against Teekay for indemnification pursuant to
Section 7.1(a) in connection with the LNG Partnership Group and the LNG
Contribution Assets unless the aggregate dollar amount of all claims for
indemnification by the LNG Partnership Group pursuant to such section shall
exceed $500,000, in which case Teekay shall be liable for claims for
indemnification only to the extent such aggregate amount exceeds $500,000.

         (b) The aggregate liability of Teekay under Section 7.1(a) above in
connection with the Offshore Partnership Group and the Offshore Contribution
Assets shall not exceed $10 million. Furthermore, no claim may be made against
Teekay for indemnification pursuant to Section 7.1(a) in connection with the
Offshore Partnership Group and the Offshore Contribution Assets unless the
aggregate dollar amount of all claims for indemnification by the Offshore
Partnership Group pursuant to such section shall exceed $500,000, in which case
Teekay shall be liable for claims for indemnification only to the extent such
aggregate amount exceeds $500,000.

         7.3      INDEMNIFICATION PROCEDURES.

                  (a) The LNG Partnership Group Members and the Offshore
Partnership Group Members agree that within a reasonable period of time after
they become aware of facts giving rise to a claim for indemnification pursuant
to Section 7.1, they will provide notice thereof in writing to Teekay specifying
the nature of and specific basis for such claim.

                  (b) Teekay shall have the right to control all aspects of the
defense of (and any counterclaims with respect to) any claims of third parties
brought against the LNG Partnership Group or the Offshore Partnership Group that
are covered by the indemnification set forth in Section 7.1, 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 Teekay
LNG General Partner, on behalf of the LNG Partnership Group, or Teekay Offshore
General Partner, on behalf of the Offshore Partnership Group, as applicable
(with the concurrence of the applicable Conflicts Committee), unless it includes
a full release of the LNG Partnership Group or the Offshore Partnership Group,
as applicable, from such matter or issues, as the case may be.

                  (c) The LNG Partnership Group Members and the Offshore
Partnership Group Members agree to cooperate fully with Teekay with respect to
all aspects of the defense of any claims covered by the indemnification set
forth in Section 7.1, including, without limitation, the prompt furnishing to
Teekay of any correspondence or other notice relating thereto that the LNG
Partnership Group or the Offshore Partnership Group may receive, permitting the
names of the members of the LNG Partnership Group or the Offshore Partnership
Group, as applicable, to be utilized in connection with such defense, the making
available to Teekay of any files, records or other information of the LNG
Partnership Group or the Offshore Partnership Group that Teekay considers
relevant to such defense and the making available to Teekay of any employees of
the LNG Partnership Group or the Offshore Partnership Group, as applicable;
provided, however, that in connection therewith Teekay agrees to use reasonable
efforts to minimize the impact

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -21-
<PAGE>

thereof on the operations of the LNG Partnership Group and the Offshore
Partnership Group and further agrees to maintain the confidentiality of all
files, records and other information furnished by an LNG Partnership Group
Member or an Offshore Partnership Group Member pursuant to this Section 7.3. In
no event shall the obligation of the LNG Partnership Group or the Offshore
Partnership Group, as applicable, to cooperate with Teekay as set forth in the
immediately preceding sentence be construed as imposing upon the LNG Partnership
Group or the Offshore Partnership Group an obligation to hire and pay for
counsel in connection with the defense of any claims covered by the
indemnification set forth in this Article VII; provided, however, that the LNG
Partnership Group Members and the Offshore Partnership Group Members,
respectively, may, at their own option, cost and expense, hire and pay for
counsel in connection with any such defense. Teekay agrees to keep any such
counsel hired by the LNG Partnership Group or the Offshore Partnership Group
reasonably informed as to the status of any such defense (including providing
such counsel with such information related to any such defense as such counsel
may reasonably request) but Teekay shall have the right to retain sole control
over such defense.

                  (d) In determining the amount of any Loss for which any of the
members of the LNG Partnership Group or the Offshore Partnership Group, as
applicable, are entitled to indemnification under this Agreement, the gross
amount of the indemnification will be reduced by (i) any insurance proceeds
realized by the LNG Partnership Group or the Offshore Partnership Group, as
applicable, and such correlative insurance benefit shall be net of any
incremental insurance premium that becomes due and payable by the LNG
Partnership Group or the Offshore Partnership Group as a result of such claim,
and (ii) all amounts recovered by the LNG Partnership Group or the Offshore
Partnership Group, as applicable, under contractual indemnities from third
Persons. Teekay LNG MLP and Teekay Offshore MLP each 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 the LNG Partnership Group or the Offshore
Partnership Group, as applicable, in connection with such efforts shall be
promptly reimbursed by Teekay in advance of any determination of whether such
insurance proceeds or other amounts will be recoverable.

                                  ARTICLE VIII
                                  MISCELLANEOUS

         8.1 CHOICE OF LAW; SUBMISSION TO JURISDICTION. This Agreement shall be
subject to and governed by the laws of the State of New York, excluding any
conflicts-of-law rule or principle that might refer the construction or
interpretation of this Agreement to the laws of another jurisdiction. Each party
hereby submits to the jurisdiction of the state and federal courts located in
the State of New York and to venue in New York, New York.

         8.2 NOTICE. All notices or requests or consents provided for or
permitted to be given pursuant to this Agreement must be in writing and must be
given by depositing same in the mail,

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -22-
<PAGE>

addressed to the Person to be notified, postpaid, and registered or certified
with return receipt requested or by delivering such notice in person or by
private-courier, prepaid, or by telecopier to such party. Notice given by
personal delivery or mail shall be effective upon actual receipt. Couriered
notices shall be deemed delivered on the date the courier represents that
delivery will occur. Notice given by telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices to be sent to a party
pursuant to this Agreement shall be sent to or made at the address set forth
below such party's signature to this Agreement, or at such other address as such
party may stipulate to the other parties in the manner provided in this Section.

         8.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties relating to the matters contained herein, superseding all prior
contracts or agreements, whether oral or written, relating to the matters
contained herein, including, without limitation, the Original Agreement.

         8.4 TERMINATION. The provisions of Articles II, III, IV, V and VI of
this Agreement (but not less than all of such Articles) may be terminated by (a)
Teekay, with respect to all Teekay Entities, upon notice to the other Parties
upon a Change of Control of Teekay, (b) Teekay LNG General Partner, with respect
to the Teekay LNG Partnership Group, upon notice to the other Parties upon a
Change of Control of Teekay LNG General Partner, and (c) Teekay Offshore General
Partner, with respect to the Teekay Offshore Partnership Group, upon notice to
the other Parties upon a Change of Control of Teekay Offshore General Partner.

         8.5 WAIVER; EFFECT OF WAIVER OR CONSENT. Any party hereto may (a)
extend the time for the performance of any obligation or other act of any other
party hereto or (b) waive compliance with any agreement or condition contained
herein. Except as otherwise specifically provided herein, any such extension or
waiver shall be valid only if set forth in a written instrument duly executed by
the party or parties to be bound thereby; provided, however, that (x) Teekay LNG
MLP and Teekay LNG OLLC may not, without the prior approval of Teekay LNG
General Partner's Conflicts Committee, agree to any extension or waiver of this
Agreement that, in the reasonable discretion of Teekay LNG General Partner, will
adversely affect the holders of common units of Teekay LNG MLP and (y) Teekay
Offshore MLP, Teekay Offshore Operating General Partner and Teekay Offshore OLP
may not, without the prior approval of Teekay Offshore General Partner's
Conflicts Committee, agree to any extension or waiver of this Agreement that, in
the reasonable discretion of Teekay Offshore General Partner, will adversely
affect the holders of common units of Teekay Offshore MLP. No waiver or consent,
express or implied, by any party of or to any breach or default by any Person in
the performance by such Person of its obligations hereunder shall be deemed or
construed to be a waiver or consent of or to any other breach or default in the
performance by such Person of the same or any other obligations of such Person
hereunder. Failure on the part of a party to complain of any act of any Person
or to declare any Person in default, irrespective of how long such failure
continues, shall

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -23-
<PAGE>

not constitute a waiver by such party of its rights hereunder until the
applicable statute of limitations period has run.

         8.6 AMENDMENT OR MODIFICATION. This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto; provided, however, that (a) Teekay LNG MLP and Teekay LNG OLLC may not,
without the prior approval of Teekay LNG General Partner's Conflicts Committee,
agree to any amendment or modification of this Agreement that, in the reasonable
discretion of Teekay LNG General Partner, will adversely affect the holders of
common units of Teekay LNG MLP, and (b) Teekay Offshore MLP, Teekay Offshore
Operating General Partner and Teekay Offshore OLP may not, without the prior
approval of Teekay Offshore General Partner's Conflicts Committee, agree to any
amendment or modification of this Agreement that, in the reasonable discretion
of Teekay Offshore General Partner, will adversely affect the holders of common
units of Teekay Offshore MLP.

         8.7 ASSIGNMENT. No party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other parties
hereto.

         8.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.

         8.9 SEVERABILITY. If any provision of this Agreement or the application
thereof to any Person or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.

         8.10 GENDER, PARTS, ARTICLES AND SECTIONS. Whenever the context
requires, the gender of all words used in this Agreement shall include the
masculine, feminine and neuter, and the number of all words shall include the
singular and plural. All references to Article numbers and Section numbers refer
to Articles and Sections of this Agreement.

         8.11 FURTHER ASSURANCES. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.

         8.12 WITHHOLDING OR GRANTING OF CONSENT. Each party may, with respect
to any consent or approval that it is entitled to grant pursuant to this
Agreement, grant or withhold such consent or approval in its sole and
uncontrolled discretion, with or without cause, and subject to such conditions
as it shall deem appropriate.

         8.13 LAWS AND REGULATIONS. Notwithstanding any provision of this
Agreement to the contrary, no party to this Agreement shall be required to take
any act, or fail to take any act,

                     AMENDED AND RESTATED OMNIBUS AGREEMENT

                                      -24-
<PAGE>

under this Agreement if the effect thereof would be to cause such party to be in
violation of any applicable law, statute, rule or regulation.

         8.14 NEGOTIATION OF RIGHTS OF TEEKAY, LIMITED PARTNERS, ASSIGNEES, AND
THIRD PARTIES. The provisions of this Agreement are enforceable solely by the
parties to this Agreement, and no shareholder of Teekay and no limited partner,
member, assignee or other Person of Teekay LNG MLP, Teekay LNG OLLC, Teekay
Offshore MLP, Teekay Offshore Operating General Partner or Teekay Offshore OLP
shall have the right, separate and apart from Teekay, Teekay LNG MLP, Teekay LNG
OLLC, Teekay Offshore MLP, Teekay Offshore Operating General Partner or Teekay
Offshore OLP, to enforce any provision of this Agreement or to compel any party
to this Agreement to comply with the terms of this Agreement.

                            [SIGNATURE PAGE FOLLOWS]

                      AMENDED AND RESTATED OMNIBUS AGREEMENT

                                   -25-
<PAGE>

         IN WITNESS WHEREOF, the Parties have executed this Amended and Restated
Omnibus Agreement on, and effective as of, the Offshore Closing Date.

                         TEEKAY SHIPPING CORPORATION

                         By:
                                ----------------------------------------------
                                Name:  Peter Evensen
                                Title:  Executive Vice President and Chief
                                Financial Officer

                         Address for Notice:

                         Bayside House, Bayside Executive Park
                         West Bay Street and Blake Road
                         P.O. Box AP-59213
                         Nassau, Commonwealth of the Bahamas
                         Phone:  (242) 502-8820

                         TEEKAY GP L.L.C.

                         By:
                                ----------------------------------------------
                                Name:  Peter Evensen
                                Title:  Chief Executive Officer and Chief
                                Financial Officer

                         Address for Notice:

                         Bayside House, Bayside Executive Park
                         West Bay Street and Blake Road
                         P.O. Box AP-59213
                         Nassau, Commonwealth of the Bahamas
                         Phone:  (242) 502-8820

                     AMENDED AND RESTATED OMNIBUS AGREEMENT
                                 SIGNATURE PAGE

<PAGE>

                         TEEKAY LNG OPERATING L.L.C.

                         By:    Teekay LNG Partners L.P.,
                                its sole member

                                By:   Teekay GP L.L.C.,
                                      its general partner

                                By:
                                      ----------------------------------------
                                      Name:  Peter Evensen
                                      Title:  Chief Executive Officer and Chief
                                      Financial Officer

                         Address for Notice:

                         Bayside House, Bayside Executive Park
                         West Bay Street and Blake Road
                         P.O. Box AP-59213
                         Nassau, Commonwealth of the Bahamas
                         Phone:  (242) 502-8820

                         TEEKAY LNG PARTNERS L.P.

                         By:    Teekay GP L.L.C., its general partner

                                By:
                                      ----------------------------------------
                                      Name:  Peter Evensen
                                      Title:  Chief Executive Officer and Chief
                                      Financial Officer

                         Address for Notice:

                         Bayside House, Bayside Executive Park
                         West Bay Street and Blake Road
                         P.O. Box AP-59213
                         Nassau, Commonwealth of the Bahamas
                         Phone:  (242) 502-8820

                     AMENDED AND RESTATED OMNIBUS AGREEMENT
                                 SIGNATURE PAGE

<PAGE>

                         TEEKAY OFFSHORE GP L.L.C.

                         By:
                                ----------------------------------------------
                                Name:  Peter Evensen
                                Title:  Chief Executive Officer and Chief
                                Financial Officer

                         Address for Notice:

                         Bayside House, Bayside Executive Park
                         West Bay Street and Blake Road
                         P.O. Box AP-59213
                         Nassau, Commonwealth of the Bahamas
                         Phone:  (242) 502-8820

                         TEEKAY OFFSHORE OPERATING GP L.L.C.

                         By:    Teekay Offshore Partners L.P.,
                                its sole member

                                By:   Teekay Offshore GP L.L.C.,
                                      its general partner

                                By:
                                      ----------------------------------------
                                      Name:  Peter Evensen
                                      Title:  Chief Executive Officer and Chief
                                      Financial Officer

                         Address for Notice:

                         Bayside House, Bayside Executive Park
                         West Bay Street and Blake Road
                         P.O. Box AP-59213
                         Nassau, Commonwealth of the Bahamas
                         Phone:  (242) 502-8820

                     AMENDED AND RESTATED OMNIBUS AGREEMENT
                                 SIGNATURE PAGE

<PAGE>

                         TEEKAY OFFSHORE OPERATING L.P.

                         By:    Teekay Offshore Operating GP L.L.C.,
                                its general partner

                                By:    Teekay Offshore Partners L.P.,
                                       its sole member

                                By:   Teekay Offshore GP L.L.C.,
                                      its general partner

                                By:
                                      ----------------------------------------
                                      Name:  Peter Evensen
                                      Title:  Chief Executive Officer and Chief
                                      Financial Officer

                         Address for Notice:

                         Bayside House, Bayside Executive Park
                         West Bay Street and Blake Road
                         P.O. Box AP-59213
                         Nassau, Commonwealth of the Bahamas
                         Phone:  (242) 502-8820

                         TEEKAY OFFSHORE PARTNERS L.P.

                         By:    Teekay Offshore GP L.L.C.,
                                its general partner

                                By:
                                      ----------------------------------------
                                      Name:  Peter Evensen
                                      Title:  Chief Executive Officer and Chief
                                      Financial Officer

                         Address for Notice:

                         Bayside House, Bayside Executive Park
                         West Bay Street and Blake Road
                         P.O. Box AP-59213
                         Nassau, Commonwealth of the Bahamas
                         Phone:  (242) 502-8820

                     AMENDED AND RESTATED OMNIBUS AGREEMENT
                                 SIGNATURE PAGE<PAGE>

                                                                    Exhibit 10.6

FURTHER AMENDED AND RESTATED LOAN FACILITY AGREEMENT

DATED: 26 JUNE 2003

BETWEEN:-

(1)  NORSK TEEKAY HOLDINGS LTD which is a company incorporated according to the
     law of the Marshall Islands with its registered office at c/o Trust Company
     Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH-96960
     and its principal place of business at Bayside House, Bayside Executive
     Park West Bay Street & Blake Road, Nassau, The Bahamas ("THE BORROWER");
     and

(2)  the banks and financial institutions listed in Schedule 1, each acting
     through its office at the address indicated against its name in Schedule 1
     (together "THE BANKS" and each a "BANK"); and

(3)  DNB NOR BANK ASA, acting as facility agent and security trustee (in that
     capacity "THE AGENT"); and

(4)  CITIGROUP GLOBAL MARKETS LIMITED, DNB NOR BANK ASA and NORDEA BANK FINLAND
     PLC, NEW YORK BRANCH each acting as a mandated lead arranger through its
     office and at the address indicated against its name in Schedule 7
     (together "THE ARRANGERS" and each "AN ARRANGER"); and

(5)  CITIGROUP GLOBAL MARKETS LIMITED and DNB NOR BANK ASA each acting as a
     joint book runner through its office and at the address indicated against
     its name in Schedule 7 (together "THE BOOK RUNNERS").

WHEREAS:-

Each of the Banks has agreed to advance to the Borrower its respective
Commitment of an aggregate principal amount not exceeding four hundred and fifty
five million Dollars ($455,000,000) in respect of an initial secured reducing
facility of five hundred and fifty million Dollars ($550,000,000) which
originally assisted the Borrower in refinancing the Bridge Facility and all
other sums due and payable under or pursuant to the Bridge Facility Agreement
and is now for the Borrower's other general corporate purposes.

IT IS AGREED as follows:-

<PAGE>

1    DEFINITIONS AND INTERPRETATION

     1.1  DEFINITIONS

          In this Agreement:-

          1.1.1 "THE ADDRESS FOR SERVICE" means c/o Teekay Shipping (UK) Ltd of
               2nd Floor, 86 Jermyn Street, London SW1Y 6JD, England or, in
               relation to any of the Security Parties, such other address in
               England and Wales as that Security Party may from time to time
               designate by no fewer than ten Business Days' written notice to
               the Agent.

          1.1.2 the "ADVANCE DATE", in relation to any Drawing, means the date
               on which that Drawing is advanced by the Banks to the Borrower
               pursuant to Clause 2.

          1.1.3 "APPROVED BROKERS" means H. Clarkson & Co. Ltd, Simpson Spence &
               Young Shipbrokers Ltd, Fearnley AS, R. S. Platou AS and P. Bassoe
               AS.

          1.1.4 "ASSIGNMENT" means the deed of assignment of Intercompany
               Indebtedness referred to in Clause 8.1.1.

          1.1.5 "BAREBOAT CHARTERER" means TNOL in its capacity as bareboat
               charterer of the TNOL Vessels and/or any other bareboat charterer
               of the Vessels who is acceptable to the Majority Banks.

          1.1.6 "THE BORROWER'S OBLIGATIONS" means all of the liabilities and
               obligations of the Borrower to the Finance Parties under or
               pursuant to the Borrower's Security Documents, whether actual or
               contingent, present or future, and whether incurred alone or
               jointly or jointly and severally with any other and in whatever
               currency, including (without limitation) interest, commission and
               all other charges and expenses.

          1.1.7 "THE BORROWER'S SECURITY DOCUMENTS" means those of the Security
               Documents to which the Borrower is or is to be a party.

          1.1.8 "BREAK COSTS" means all documented costs, losses, premiums or
               penalties incurred by any of the Finance Parties in the
               circumstances contemplated by Clause 17.4 or as a result of any
               of them receiving any

                                        2

<PAGE>

               prepayment of all or any part of the Facility (whether pursuant
               to Clause 5.2 or otherwise) or any other payment under or in
               relation to the Security Documents on a day other than the due
               date for payment of the sum in question, and includes (without
               limitation) any losses or costs incurred in liquidating or
               re-employing deposits from third parties acquired to effect or
               maintain the Facility, and any liabilities, expenses or losses
               incurred by any of the Finance Parties in terminating or
               reversing, or otherwise in connection with, any interest rate
               and/or currency swap, transaction or arrangement entered into by
               any of the Finance Parties to hedge any exposure arising under
               this Agreement, or in terminating or reversing, or otherwise in
               connection with, any open position arising under this Agreement.

          1.1.9 "BRIDGE FACILITY" means the five hundred million Dollar
               ($500,000,000) short term facility made available by the Bridge
               Lenders to the Borrower pursuant to the Bridge Facility
               Agreement.

          1.1.10 "BRIDGE FACILITY AGREEMENT" means the USD500,000,000 Revolving
               Credit Facility Agreement dated 27 March 2003 made between the
               Borrower as borrower, the Bridge Lenders, and the Agent as agent
               on behalf of the Bridge Lenders pursuant to which the Bridge
               Lenders made the Bridge Facility available to the Borrower
               subject to and upon the terms and conditions contained therein

          1.1.11 "BRIDGE LENDERS" means the banks listed in Exhibit 1 of the
               Bridge Facility Agreement.

          1.1.12 "BUSINESS DAY" means a day on which banks are open for the
               transaction of business of the nature contemplated by this
               Agreement (and not authorised by law to close) in New York City,
               United States of America; London, England; Oslo, Norway; and any
               other financial centre which the Agent may consider appropriate
               for the operation of the provisions of this Agreement.

          1.1.13 "CHANGE OF CONTROL" means that TSC and the Guarantor between
               them shall cease, for any reason whatsoever, to own or control
               directly or indirectly, all of the shares of Navion, NOL and/or
               TNOL.

                                        3

<PAGE>

          1.1.14 "COMMISSION RATE" means thirty two point five per cent (32.5%)
               of the Margin, per annum.

          1.1.15 "COMMITMENT" means, in relation to each Bank, the amount of the
               Facility which that Bank agrees to advance to the Borrower as its
               several liability as indicated against the name of that Bank in
               Schedule 1, as reduced from time to time in accordance with
               Clause 2.4, or, where the context permits, the amount of the
               Facility advanced by that Bank and remaining outstanding.

          1.1.16 "COMMITMENT COMMISSION" means the commitment commission to be
               paid by the Borrower to the Agent on behalf of the Banks pursuant
               to Clause 7.2.

          1.1.17 "COMMITMENT TERMINATION DATE" means the date falling one month
               prior to the Termination Date.

          1.1.18 a "COMMUNICATION" means any notice, approval, demand, request
               or other communication from one party to this Agreement to any
               other party to this Agreement.

          1.1.19 "THE COMMUNICATIONS ADDRESS" means c/o Teekay Shipping (Canada)
               Ltd, Suite 2000, Bentall 5, 550 Burrard Street, Vancouver, B.C.,
               Canada V6C 2K2, fax no: +604 681 3011 marked for the attention of
               Director, Finance.

          1.1.20 "COVENANTING GROUP" means the Borrower and its Subsidiaries,
               NOL and TNOL.

          1.1.21 "CURRENCY OF ACCOUNT" means, in relation to any payment to be
               made to a Finance Party pursuant to any of the Security
               Documents, the currency in which that payment is required to be
               made by the terms of the relevant Security Document.

          1.1.22 "DEFAULT RATE" means the rate which is the aggregate of (i) two
               per centum (2%) per annum (ii) the Margin (iii) LIBOR and (iv)
               the Mandatory Cost.

                                        4

<PAGE>

          1.1.23 "DOLLARS" and "$" each means available and freely transferable
               and convertible funds in lawful currency of the United States of
               America.

          1.1.24 "DRAWDOWN NOTICE" means a notice complying with Clause 2.3.

          1.1.25 "DRAWING" means a part (or, if requested and available, all) of
               the Facility advanced by the Banks to the Borrower in accordance
               with Clause 2.

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

          1.1.27 "ENCUMBRANCE" means any mortgage, charge, pledge, lien,
               assignment, hypothecation, preferential right, option, title
               retention or trust arrangement or any other agreement or
               arrangement which, in any of the aforementioned instances, has
               the effect of creating security.

          1.1.28 "EVENT OF DEFAULT" means any of the events set out in Clause
               12.2.

          1.1.29 "EXECUTION DATE" means the date on which this Agreement is
               executed by each of the parties hereto.

          1.1.30 "FACILITY" means the reducing revolving credit facility made
               available by the Banks to the Borrower pursuant to this
               Agreement.

          1.1.31 "THE FACILITY OUTSTANDINGS" at any time means the total of all
               Drawings made at that time, to the extent not reduced by
               repayments, prepayments and voluntary reductions.

          1.1.32 "THE FACILITY PERIOD" means the period beginning on the
               Execution Date and ending on the date when the whole of the
               Indebtedness has

                                        5

<PAGE>

               been repaid in full and the Borrower has ceased to be under any
               further actual or contingent liability to the Finance Parties
               under or in connection with the Security Documents.

          1.1.33 "THE FEE LETTERS" means the letters from the Agent, the
               Arrangers and the Book Runners as agreed and accepted by the
               Borrower and/or the Guarantor setting out certain fees,
               commissions and other sums payable by the Borrower and/or the
               Guarantor in connection with the Facility.

          1.1.34 "THE FINANCE PARTIES" means the Banks, the Agent, the Arrangers
               and the Book Runners.

          1.1.35 "FIRST QUALIFYING SECURITY ASSIGNMENT" means the deed of
               assignment of the First Qualifying Security Documents dated 30
               September 2004 executed by (inter alios) the Borrower, NOL and
               the Intercompany Agent in favour of the Agent.

          1.1.36 "FIRST QUALIFYING SECURITY DOCUMENTS" means the NOL Guarantee
               and the Mortgages.

          1.1.37 "FIRST REDUCTION DATE" means the earlier to occur of (i) six
               months after the first Advance Date to occur after 30 September
               2006 and (ii) 30 April 2007.

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

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

          1.1.40 "THE GUARANTEE" means the guarantee and indemnity of the
               Guarantor in respect of the Borrower's Obligations referred to in
               Clause 8.2.3.

          1.1.41 "GUARANTOR GROUP" means the Guarantor and each of its
               Subsidiaries (including but not limited to the Borrower).

                                        6

<PAGE>

          1.1.42 "GUARANTOR" means Teekay Offshore Operating L.P., a limited
               partnership formed under the laws of the Marshall Islands and
               with its registered office at Trust Company Complex, Ajeltake
               Island, PO Box 1405, Majuro, Marshall Islands MH-196960.

          1.1.43 "GUARANTOR'S ACCOUNTS" means either the annual consolidated
               financial statements of the Guarantor prepared in accordance with
               GAAP comprising a profit and loss account, balance sheet and cash
               flow statement and audited by Ernst & Young or such other first
               class firm of accountants as may be acceptable to the Agent or
               (as the context may require) the quarterly consolidated financial
               statements of the Guarantor which shall be unaudited but shall
               also be prepared in accordance with GAAP.

          1.1.44 "THE INDEBTEDNESS" means the Facility Outstandings; all other
               sums of any nature including costs (together with all interest on
               any of those sums) which from time to time may be payable by the
               Borrower to the Finance Parties pursuant to the Security
               Documents; any damages payable as a result of any breach by the
               Borrower of any of the Security Documents; and any damages or
               other sums payable as a result of any of the obligations of the
               Borrower under or pursuant to any of the Security Documents being
               disclaimed by a liquidator or any other person, or, where the
               context permits, the amount thereof for the time being
               outstanding.

          1.1.45 "INSURANCES", in relation to a Vessel, means all policies and
               contracts of insurance (including but not limited to hull and
               machinery, all entries in protection and indemnity or war risks
               associations) which are from time to time taken out or entered
               into in respect of or in connection with that Vessel or her
               increased value and (where the context permits) all benefits
               thereof, including all claims of any nature and returns of
               premium.

          1.1.46 "INTERCOMPANY AGENT" means DnB NOR Bank ASA in its capacity as
               agent under the Intercompany Loan Agreement.

                                        7

<PAGE>

          1.1.47 "INTERCOMPANY BORROWER" means Norsk Teekay AS being a company
               incorporated according to the laws of Norway with Enterprise No.
               985 030 235.

          1.1.48 "INTERCOMPANY INDEBTEDNESS" means that portion of the Facility
               on lent by the Borrower to the Intercompany Borrower upon the
               terms and conditions of the Intercompany Loan Agreement.

          1.1.49 "INTERCOMPANY LOAN AGREEMENT" means the agreement dated 26 June
               2003 as amended and restated by an agreement dated 30 September
               2004 and as further amended and restated by an agreement dated 5
               October 2006 each made between the Borrower as lender, the
               Intercompany Borrower and the Intercompany Agent under which the
               Borrower has lent the Intercompany Indebtedness to the
               Intercompany Borrower.

          1.1.50 "INTEREST PAYMENT DATE" means each date for the payment of
               interest in accordance with Clause 6.

          1.1.51 "INTEREST PERIOD" means each interest period selected by the
               Borrower or agreed by the Agent pursuant to Clause 6.

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

          1.1.53 "LIBOR" means the rate, rounded to the nearest four decimal
               places downwards (if the digit displayed in the fifth decimal
               place is 1,2,3 or 4) or upwards (if the digit displayed in the
               fifth decimal place is 5,6,7,8 or 9) displayed on Reuters page
               LIBOR 01 (or such other page or pages which replace(s) such page
               for the purposes of displaying offered rates of leading banks,
               for deposits in Dollars of amounts equal to the amount of the
               relevant Drawing for a period equal in length to the relevant
               Interest Period or if there is no such display rate then
               available for Dollars for an amount comparable to the Drawing,
               the arithmetic mean

                                        8

<PAGE>

               (rounded upwards, if necessary, to the nearest whole multiple of
               one-sixteenth per centum (1/16%)) of the respective rates
               notified to the Agent by each of the Reference Banks as the rate
               at which it is offered deposits in Dollars and for the required
               period by prime banks in the London Interbank Market.

          1.1.54 "MAJORITY BANKS" means any one or more Banks whose combined
               Proportionate Shares exceed sixty six and two thirds per centum
               (66 2/3%).

          1.1.55 "MANDATORY COST" means for each Bank to which it applies, the
               cost imputed to that Bank of compliance with the mandatory liquid
               asset requirements of the Bank of England and/or the banking
               supervision or other costs imposed by the Financial Services
               Authority, determined in accordance with Schedule 6 (CALCULATION
               OF THE MANDATORY COST).

          1.1.56 "MARGIN" means nought point six two five (0.625) per cent per
               annum.

          1.1.57 "MATERIAL SUBSIDIARY" means:

               any Subsidiary of the Guarantor whose assets, as determined in
               accordance with GAAP and as shown from the most recent financial
               statements available to the Agent relating to it, as multiplied
               by the Relevant Percentage in respect of such Subsidiary, equal
               or exceed 10% of the aggregate value of the assets of the
               Guarantor Group as determined in accordance with GAAP and as
               shown from the most recently available financial statements of
               the Guarantor Group,

               provided that:

               (i)  in respect of any Subsidiary of the Guarantor, only the
                    value of its assets as multiplied by the Relevant Percentage
                    in respect of such Subsidiary shall be taken into account in
                    the computation of the value of the assets of the Guarantor
                    Group; and

               (ii) a statement by the auditors of the Guarantor to the effect
                    that, in their opinion, a Subsidiary of the Guarantor is or
                    is not or was or was not at any particular time a Material
                    Subsidiary shall, in the

                                        9

<PAGE>

                    absence of manifest error, be conclusive and binding on each
                    of the parties to this Agreement.

          1.1.58 "THE MAXIMUM FACILITY AMOUNT" means the amount of the aggregate
               Commitments (stated in Dollars) subject to any reductions
               effected in accordance with Clauses 2.4, 15.7 and 15.8.

          1.1.59 "MORTGAGES" means the first priority statutory ship mortgages
               over the Vessels each dated 30 September 2004 together with deeds
               of covenants collateral thereto made between NOL and the Borrower
               or NOL, the Borrower and the Intercompany Agent, as the case may
               be.

          1.1.60 "NAVION" means Teekay Norway AS (formerly known as Navion ASA
               with Enterprise No. 979199325) of Verven 4, N-4014 Stavanger,
               Norway.

          1.1.61 "NAVION GROUP" means the Borrower, TNOL, the Intercompany
               Borrower, Navion and Navion's Subsidiaries.

          1.1.62 "NOL" means Navion Offshore Loading AS being a company
               incorporated according to the laws of Norway with Enterprise No.
               984 837 771.

          1.1.63 "NOL GUARANTEE" means the guarantee and indemnity dated 30
               September 2004 executed by NOL in favour of the Intercompany
               Agent.

          1.1.64 "OWNER" means NOL and/or any other owner of a Vessel which is
               acceptable to the Majority Banks and which secures all or any
               part of the Indebtedness.

          1.1.65 "PERMITTED LIENS" means (i) any Encumbrance which has the prior
               written approval of the Agent acting upon the instructions of all
               the Banks or (ii) any Encumbrance arising either by operation of
               law or in the ordinary course of the business of the relevant
               Security Party which is discharged in the ordinary course of
               business or (iii) any Encumbrance over assets acquired subject to
               that Encumbrance, provided the Encumbrance is discharged within
               three (3) months of the date of acquisition of the asset.

                                       10

<PAGE>

          1.1.66 "POTENTIAL EVENT OF DEFAULT" means any event which, with the
               giving of notice and/or the passage of time and/or the
               satisfaction of any materiality test, would constitute an Event
               of Default.

          1.1.67 "PRO RATA INSURANCE PROCEEDS AMOUNT" means, in respect of each
               Vessel, a figure equal to (x) a fraction in which (i) the
               numerator is the amount of the insurance proceeds payable in
               respect of such Vessel in the event of a Total Loss and (ii) the
               denominator is the aggregate market value of all the Vessels
               (based on the Valuations) multiplied by (y) the Maximum Facility
               Amount.

          1.1.68 "PROCEEDINGS" means any suit, action or proceedings begun by
               any of the Finance Parties arising out of or in connection with
               the Security Documents.

          1.1.69 "PROPORTIONATE SHARE" means, for each Bank, the percentage
               indicated against the name of that Bank in Schedule 1, as amended
               by any Transfer Certificate executed from time to time.

          1.1.70 "QUALIFYING SECURITY" means together the First Qualifying
               Security Documents and any other security granted in respect of
               the Intercompany Indebtedness which is assigned to the Agent as
               security for the Indebtedness.

          1.1.71 "QUALIFYING SECURITY PARTIES" means any party who grants
               Qualifying Security.

          1.1.72 "REFERENCE BANKS" means DnB Nor Bank ASA, Citibank N.A. and
               Nordea Bank Norge ASA.

          1.1.73 "RELEVANT PERCENTAGE" means, in respect of any Subsidiary of
               the Guarantor at any time, the percentage of the equity share
               capital or the partnership capital, as the case may be, of such
               Subsidiary which is beneficially owned (free from Encumbrances)
               by the Guarantor at such time.

          1.1.74 "REQUISITION COMPENSATION", in relation to a Vessel, means all
               compensation or other money which may from time to time be
               payable to an Owner and/or a Bareboat Charterer as a result of
               that Vessel being

                                       11

<PAGE>

               requisitioned for title or in any other way compulsorily acquired
               (other than by way of requisition for hire).

          1.1.75 "THE SECURITY DOCUMENTS" means this Agreement, the Shares
               Charge, the Assignment, the First Qualifying Security Assignment,
               the Guarantee, the TNOL Assignment and Subordination Agreements,
               or (where the context permits) any one or more of them, and any
               other agreement or document which may at any time be executed as
               security for the payment of all or any part of the Indebtedness.

          1.1.76 "SECURITY PARTIES" means, at any relevant time, the Borrower,
               the Intercompany Borrower, the Guarantor, TNOL, NOL and any other
               party who may at any time during the Facility Period be liable
               for, or provide security for, all or any part of the
               Indebtedness, and "SECURITY PARTY" means any one of them.

          1.1.77 "SHARES CHARGE" means the assignment of the charge over the
               issued share capital of Navion referred to in Clause 8.1.2.

          1.1.78 "SUBSEQUENT REDUCTION DATES" means each date falling at
               consecutive six monthly intervals after the previous Subsequent
               Reduction Date which in the case of the first Subsequent
               Reduction Date shall be six months after the First Reduction
               Date.

          1.1.79 "SUBORDINATED DEBT" means (based on the Borrower's Accounts)
               any inter-company loan (including interest thereon) which has a
               term beyond the Termination Date and which shall be treated as
               equity in Navion for financial covenant test purposes.

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

          1.1.81 "TAXES" means all taxes, levies, imposts, duties, charges,
               fees, deductions and withholdings (including any related interest
               and penalties) and any restrictions or conditions resulting in
               any charge, other than taxes on the overall net income of a
               Finance Party or branch thereof, and "TAX" and "TAXATION" shall
               be interpreted accordingly.

                                       12

<PAGE>

          1.1.82 "THE TERMINATION DATE" means 31 October 2014.

          1.1.83 "TKO" means Teekay Offshore Partners L.P. a master limited
               partnership formed or to be formed according to the laws of The
               Marshall Islands and to be publicly listed.

          1.1.84 "TNOL" means Teekay Navion Offshore Loading PTE Ltd being a
               company incorporated according to the laws of Singapore.

          1.1.85 "TNOL ASSIGNMENT AND SUBORDINATION AGREEMENTS" means the deeds
               of assignment of Insurances and Earnings and subordination of
               rights in relation to the TNOL Vessels each dated 28 January 2005
               and made between TNOL, NOL and the Agent.

          1.1.86 "TNOL BAREBOAT CHARTERS" means the bareboat charterparties
               dated 28 January 2005 and entered into between NOL as owner and
               TNOL as Bareboat Charterer in respect of the TNOL Vessels.

          1.1.87 "TNOL VESSELS" means the Vessels listed in Schedule 3.

          1.1.88 "TOTAL DEBT" means the aggregate of:-

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

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

          1.1.89 "TOTAL LOSS", in relation to a Vessel means:-

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

                                       13

<PAGE>

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

               (c)  the capture, seizure, arrest, detention or confiscation of
                    that Vessel, unless the Vessel is released and returned to
                    the possession of its Owner or Bareboat Charterer (as the
                    case may be) within two months after the capture, seizure,
                    arrest, detention or confiscation in question.

          1.1.90 "TRANSACTION DOCUMENTS" means together the Intercompany Loan
               Agreement, the Security Documents, the Qualifying Security and
               the TNOL Bareboat Charters.

          1.1.91 "TRANSFER CERTIFICATE" means a certificate materially in the
               form set forth in Schedule 4 signed by a Bank and a Transferee
               whereby:-

               (a)  such Bank seeks to procure the transfer to such Transferee
                    of all or a part of such Bank's rights and obligations under
                    this Agreement upon and subject to the terms and conditions
                    set out in Clause 14; and

               (b)  such Transferee undertakes to perform the obligations it
                    will assume as a result of delivery of such certificate to
                    the Agent as is contemplated in Clause 14.

          1.1.92 "TRANSFER DATE" means, in relation to any Transfer Certificate,
               the date for the making of the transfer specified in the schedule
               to such Transfer Certificate.

          1.1.93 "TRANSFEREE" means a bank or other financial institution to
               which a Bank seeks to transfer all or part of such Bank's rights
               and obligations under this Agreement.

          1.1.94 "THE TRUST PROPERTY" means:-

               (a)  the benefit of Clause 8 and the covenants contained in
                    Clause 9.3; and

                                       14

<PAGE>

               (b)  all benefits arising under (including, without limitation,
                    all proceeds of the enforcement of) each of the Security
                    Documents (other than this Agreement), with the exception of
                    any benefits arising solely for the benefit of the Agent).

          1.1.95 "TSC" means Teekay Shipping Corporation being a corporation
               incorporated according to the laws of the Marshall Islands.

          1.1.96 "VALUATION" means in relation to a Vessel, the arithmetic mean
               of the written valuations of that Vessel expressed in Dollars
               prepared by two of the Approved Brokers (or such other firms of
               reputable independent shipbrokers as may be acceptable to the
               Majority Banks), one appointed by the Agent and the other
               appointed by the Borrower, unless either the Agent or the
               Borrower disagrees with such arithmetic average, in which event
               the two shipbrokers shall appoint a third firm of Approved
               Brokers (or such other firm of reputable independent shipbrokers
               as may be acceptable to the Majority Banks) and the valuation of
               the Vessel shall be the arithmetic mean of all three such
               valuations. Such valuations shall be prepared at the Borrower's
               expense, without a physical inspection, on the basis of a sale
               for prompt delivery for cash at arm's length between a willing
               buyer and a willing seller without the benefit of any
               charterparty or other engagement.

          1.1.97 "THE VESSELS" means the vessels listed in Schedule 2, and any
               other vessel which is used as security for the Indebtedness and
               everything now or in the future belonging to them on board and
               ashore (each a "VESSEL").

     1.2  INTERPRETATION

          In this Agreement:-

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

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

                                       15
<PAGE>

          1.2.3 references to Recitals, Clauses, Schedules and Appendices are
               references to recitals and clauses of, and schedules and
               appendices to, this Agreement;

          1.2.4 references to this Agreement include the Recitals, the Schedules
               and the Appendices;

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

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

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

          1.2.8 references to any of the Finance Parties include its successors,
               transferees and assignees; and

          1.2.9 references to times of day are to Oslo time.

2    THE FACILITY AND ITS PURPOSE

     2.1  AGREEMENT TO LEND Subject to the terms and conditions of this
          Agreement, and in reliance on each of the representations and
          warranties made or to be made in or in accordance with each of the
          Security Documents, each of the Banks agrees to advance to the
          Borrower its Commitment of an aggregate principal amount not exceeding
          the Maximum Facility Amount to be used by the Borrower for the
          purposes referred to in the Recital.

     2.2  DRAWINGS Subject to satisfaction by the Borrower of the conditions set
          out in Clause 3.1 (in respect of the first Drawing), Clause 3.3 (in
          respect of all subsequent Drawings), and subject to Clause 2.3, and
          provided that the maximum aggregate amount of the Facility
          Outstandings at any given time during the Facility Period shall not
          exceed the Maximum Facility Amount, each Drawing

                                       16

<PAGE>

          shall be advanced to the Borrower, in each case by the Agent
          transferring the amount of the Drawing to such account of the Borrower
          as the Borrower shall notify to the Agent in the relevant Drawdown
          Notice by such same day method of funds transfer as the Agent shall
          select.

     2.3  ADVANCE OF DRAWINGS Each Drawing shall be advanced in Dollars. Each
          Drawing shall be advanced on a Business Day, provided that the
          Borrower shall have given to the Agent not more than ten and not fewer
          than four Business Days' notice in writing materially in the form set
          out in Schedule 5 of the required Advance Date of the Drawing in
          question and provided that the requested Drawing would not cause a
          breach of Clause 2.5. Each Drawdown Notice once given shall be
          irrevocable and shall constitute a warranty by the Borrower that:-

          2.3.1 all conditions precedent to the advance of the Drawing requested
               in that Drawdown Notice will have been satisfied on or before the
               Advance Date requested;

          2.3.2 no Event of Default or Potential Event of Default has occurred
               or will then have occurred; and

          2.3.3 no Event of Default or Potential Event of Default will result
               from the advance of the Drawing in question.

          The Agent shall promptly notify each Bank of the receipt of each
          Drawdown Notice, following which each Bank will make its Proportionate
          Share of the amount of the requested Drawing available to the Borrower
          through the Agent on the Advance Date requested.

     2.4  FACILITY REDUCTION

          2.4.1 The amount of the Facility available to the Borrower for drawing
               under this Agreement shall be four hundred and fifty five million
               Dollars ($455,000,000) (reduced from the initial Facility of five
               hundred and fifty million Dollars $550,000,000) which shall be
               available for drawing from 5 October 2006 until the First
               Reduction Date. On the First Reduction Date and on each of the
               fifteen Subsequent Reduction Dates the amount of the Facility
               available for drawing shall be reduced in accordance with the
               schedule of reductions set forth in Schedule 8. In the event of a
               Change of Control the amount of the Facility available for
               drawing shall

                                       17

<PAGE>

               be reduced to zero and any outstanding Drawings shall be
               immediately repayable. On the Termination Date the Facility
               available shall be reduced to zero. The mandatory reductions in
               the amount of the Facility available for drawing required
               pursuant to this Clause will be made in the amounts and at the
               times specified whether or not the Maximum Facility Amount is
               reduced pursuant to Clause 2.4.3, Clause 2.4.4, Clause 2.4.5,
               Clause 5.2, Clause 15.7 or Clause 15.8. Any mandatory reductions
               pursuant to Clause 2.4.3 (sale) or Clause 2.4.4 (Total Loss)
               shall be applied to the remaining mandatory reductions hereunder
               on a pro rata basis.

          2.4.2 The Borrower may voluntarily cancel the Maximum Facility Amount
               in whole or in part in integral multiples of five million Dollars
               ($5,000,000), provided that it has first given to the Agent not
               fewer than five (5) Business Days' prior written notice expiring
               on a Business Day of its desire to reduce the Maximum Facility
               Amount. Any such reduction in the Maximum Facility Amount shall
               not be reversed. Any voluntary reduction in the Maximum Facility
               Amount pursuant to this Clause shall be applied to the remaining
               mandatory reductions under Clause 2.4.1 on a pro rata basis.

          2.4.3 In the event of a sale or disposal of a Vessel or the sale or
               disposal of any other asset owned by any member of the Navion
               Group as at the date hereof or which is the subject of Qualifying
               Security and where the net sales proceeds of such sales of other
               assets in any twelve (12) month period exceeds five million
               Dollars ($5,000,000) (or the equivalent in any other currency),
               the Maximum Facility Amount shall be reduced on the date of
               receipt of such proceeds by the amount of such net sale or
               disposal proceeds (which in the case of a Vessel must be proceeds
               received from a commercial sale or disposal at arms length for
               full consideration) (the "NET PROCEEDS") unless either:-

               (i)  the Vessel or asset in question remains owned by a member of
                    the Navion Group; or

               (ii) the Vessel or asset in question is replaced within one
                    hundred and twenty (120) days of the sale with a similar
                    vessel or asset being

                                       18

<PAGE>

                    in all respects acceptable to all of the Finance Parties in
                    their absolute discretion,

               and in either case any security held by the Agent (whether
               directly or indirectly) over such Vessel or asset is
               reconstituted immediately after the sale to the new owner or over
               the replacement asset (as the case may be) in substantially
               identical form, and the Agent obtains favourable legal opinions
               in respect of such reconstituted security. For any period
               commencing on the date of the sale or disposal of a Vessel or
               other relevant asset and ending on the earlier of (a) the date
               falling one hundred and twenty (120) days thereafter and (b) the
               date on which a replacement Vessel or asset is acquired in
               accordance with the provisions of this Clause, then, at the
               Borrower's option, either:-

               (a)  the Net Proceeds shall be placed in such account as the
                    Agent may reasonably specify and the Borrower shall execute
                    and deliver or cause to be executed and delivered (as the
                    case may be) a first priority charge over the Net Proceeds
                    in favour of the Agent on behalf of the Finance Parties or,
                    if applicable, in favour of the Intercompany Agent who will
                    assign such charge to the Agent, in each case in such form
                    as the Agent may reasonably specify and the Net Proceeds and
                    the said deed of charge would (subject to no Event of
                    Default or Potential Event of Default then being in
                    existence) be released at the end of such period; or

               (b)  a part of the Maximum Facility Amount equivalent to the Net
                    Proceeds (the "UNAVAILABLE PORTION") shall be unavailable
                    for drawing. If the aggregate Drawings then advanced exceed
                    the Maximum Facility Amount less the Unavailable Portion,
                    the Borrower shall promptly make such prepayment as may be
                    required to ensure that the aggregate Drawings then advanced
                    are equal to or less than the Maximum Facility Amount less
                    the Unavailable Portion. For the avoidance of doubt,
                    Commitment Commission shall continue to accrue on the
                    Unavailable Portion for such period.

                                       19

<PAGE>

          2.4.4 In the event that any Vessel becomes a Total Loss, on the
               earlier to occur of (a) the date of receipt of the proceeds of
               the Total Loss and (b) the date falling one hundred and eighty
               (180) days after the occurrence of the Total Loss (the "REDUCTION
               DATE"), the Maximum Facility Amount shall (subject to the proviso
               hereto) reduce by the Pro Rata Insurance Proceeds Amount in
               respect of such Vessel. Any such reductions in the Maximum
               Facility Amount shall not be reversed. If, as a result of any
               reduction in the Maximum Facility Amount pursuant to this Clause
               the Facility Outstandings exceed the Maximum Facility Amount, the
               Borrower shall, on the earlier to occur of (a) the one hundred
               and eightieth day after the date of such Total Loss occurring and
               (b) the date on which the relevant Owner or the Bareboat
               Charterer (as the case may be) receives the proceeds of such
               Total Loss, prepay such amount of the Facility Outstandings as
               will ensure that the Facility Outstandings are not greater than
               the Maximum Facility Amount. Any such prepayment shall not be
               reborrowed and Clause 5.3 shall apply to any such prepayment.
               PROVIDED ALWAYS that if there is an investment in a substitute
               vessel acceptable to all of the Banks within one hundred and
               twenty (120) days of the Reduction Date, and security over such
               substitute vessel acceptable to all of the Banks is also executed
               and delivered within one hundred and twenty (120) days of the
               Reduction Date, then the reduction in the Maximum Facility Amount
               shall not apply.

          2.4.5 If at any time during the Facility Period TSC ceases to own a
               minimum of fifty one per cent (51%) of the voting rights of
               Teekay Offshore GP L.L.C, the general partner of TKO which will,
               following the public listing of, and offering for TKO, own a
               minimum of fifty one per cent (51%) of the voting rights of
               Teekay Offshore Operating GP L.L.C, the Maximum Facility Amount
               shall be immediately reduced to zero and the Borrower shall
               immediately prepay the Indebtedness. The provisions of Clause 5.3
               shall apply to any prepayment made under or pursuant to this
               Clause. Any reduction in the Maximum Facility Amount pursuant to
               this Clause shall be permanent and non reversible.

          2.4.6 To the extent that repayments or prepayments made by the
               Borrower to the Agent in accordance with this Agreement reduce
               the Facility Outstandings to less than the Maximum Facility
               Amount, the Borrower

                                       20

<PAGE>

               shall again be entitled to make Drawings up to the Commitment
               Termination Date in accordance with and subject to the terms of
               this Agreement. Any part of the Facility which is undrawn on the
               Commitment Termination Date shall be automatically cancelled.

          2.4.7 Simultaneously with each reduction of the Maximum Facility
               Amount in accordance with Clause 2.4.1, Clause 2.4.2, Clause
               2.4.3, Clause 2.4.4 or Clause 2.4.5 (as the case may be), the
               Commitment of each Bank will reduce so that the Commitments of
               the Banks in respect of the reduced Maximum Facility Amount
               remain in accordance with their respective Proportionate Shares.

     2.5  RESTRICTIONS ON DRAWINGS The Borrower shall not be entitled to make
          more than one Drawing on any Business Day and no more than seven (7)
          Drawings may be outstanding at any one time during the Facility
          Period. Each Drawing shall be of an amount of not less than ten
          million Dollars ($10,000,000) and in integral multiples of five
          million Dollars ($5,000,000) or the undrawn balance of the Facility.
          If at any time during the Facility Period the Facility Outstandings
          exceed the Maximum Facility Amount then available or if a proposed
          Drawing added to the Facility Outstandings would result in the Maximum
          Facility Amount being exceeded then the Borrower shall immediately pay
          to the Agent on behalf of the Banks such amounts as will ensure that
          the Facility Outstandings are equal to or less than the Maximum
          Facility Amount then available.

     2.6  TERMINATION DATE No Bank shall be under any obligation to advance all
          or any part of its Commitment after the Commitment Termination Date.

     2.7  SEVERAL OBLIGATIONS The obligations of the Banks under this Agreement
          are several. The failure of a Bank to perform its obligations under
          this Agreement shall not affect the obligations of the Borrower to any
          Finance Party nor shall any Finance Party be liable for the failure of
          another Bank to perform any of its obligations under or in connection
          with this Agreement.

     2.8  APPLICATION OF FACILITY Without prejudice to the obligations of the
          Borrower under this Agreement, no Finance Party shall be obliged to
          concern itself with the application of the Facility by the Borrower.

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     2.9  LOAN FACILITY AND CONTROL ACCOUNTS The Agent will open and maintain
          such loan facility account or such other control accounts as the Agent
          shall in its discretion consider necessary or desirable in connection
          with the Facility.

3    CONDITIONS PRECEDENT AND SUBSEQUENT

     3.1  CONDITIONS PRECEDENT - FIRST DRAWING Before any Bank shall have any
          obligation to advance the first Drawing under the Facility, the
          Borrower shall pay to the Agent the relevant fees referred to in
          Clause 7 and the Fee Letter and deliver or cause to be delivered to or
          to the order of the Agent the following documents and evidence:-

          3.1.1 EVIDENCE OF INCORPORATION Such evidence as the Agent may
               reasonably require that each Security Party was duly incorporated
               in its country of incorporation and remains in existence and,
               where appropriate, in good standing, with power to enter into,
               and perform its obligations under, those of the Security
               Documents to which it is, or is intended to be, a party,
               including (without limitation) a copy, certified by a director or
               an officer of the Security Party in question as true, complete,
               accurate and unamended, of all documents establishing or limiting
               the constitution of each Security Party.

          3.1.2 CORPORATE AUTHORITIES A copy, certified by a director or the
               secretary of the Security Party in question as true, complete,
               accurate and neither amended nor revoked, of a resolution of the
               directors and a resolution of the shareholders of each Security
               Party (together, where appropriate, with signed waivers of notice
               of any directors' or shareholders' meetings) approving, and
               authorising or ratifying the execution of, those of the Security
               Documents and each Drawdown Notice to which that Security Party
               is or is intended to be a party and all matters incidental
               thereto.

          3.1.3 OFFICER'S CERTIFICATE A certificate (i) signed by a duly
               authorised officer of each of the Security Parties setting out
               the names of the directors, officers and shareholders of that
               Security Party and (ii) issued by each Security Party's company
               registry confirming due incorporation and valid existence and
               (when such information is maintained by the registry) the names
               of its directors and shareholders.

                                       22

<PAGE>

          3.1.4 POWER OF ATTORNEY The power of attorney (notarially attested and
               legalised, if necessary, for registration purposes) of each of
               the Security Parties under which any documents are to be executed
               or transactions undertaken by that Security Party.

          3.1.5 THE SECURITY DOCUMENTS The Security Documents, together with all
               notices and other documents required by any of them, duly
               executed.

          3.1.6 DRAWDOWN NOTICE A Drawdown Notice.

          3.1.7 PROCESS AGENT A letter from Teekay Shipping (UK) Ltd accepting
               their appointment by each of the Security Parties as agent for
               service of Proceedings pursuant to the Security Documents.

          3.1.8 FEE LETTER A fee letter countersigned on behalf of the Borrower
               by way of acceptance of its terms.

          3.1.9 LEGAL OPINIONS Confirmation satisfactory to the Agent that all
               legal opinions required by the Agent on behalf of the Finance
               Parties will be given substantially in the form required by the
               Agent on behalf of the Finance Parties.

          3.1.10 ACCOUNTS The Borrower's Accounts for its fiscal quarter just
               ended, certified, by a director or an officer of the Borrower, as
               fair and accurate.

          3.1.11 CORPORATE STRUCTURE Evidence of the capital structure and
               financial condition of the Navion Group (based on the Borrower's
               Accounts) confirming (inter alia) that within the Navion Group
               there is available two hundred million Dollars ($200,000,000) of
               equity or Subordinated Debt and twenty million Dollars
               ($20,000,000) of Free Liquidity.

          3.1.12 INTERCOMPANY LOAN AGREEMENT A copy of the Intercompany Loan
               Agreement duly executed by the parties thereto and certified as a
               true and complete copy by the Borrower together with evidence
               that all conditions precedent required under the Intercompany
               Loan Agreement have been satisfied.

                                       23

<PAGE>

          3.1.13 NAVION Evidence that any charges or other security granted
               and/or registered against Navion or on or over all or any of its
               vessels has been discharged.

          3.1.14 SHARE CHARGE DOCUMENTS Any documents required by the Shares
               Charge.

          3.1.15 BRIDGE FACILITY Evidence that the Bridge Facility and any other
               sums due and payable by the Borrower to the Bridge Lenders and
               the Agent under the Bridge Facility Agreement will following
               application of the first Drawing hereunder have been irrevocably
               repaid in full and that any security granted by any of the
               Security Parties as security for the Bridge Facility shall be
               released forthwith upon repayment of the Bridge Facility.

          3.1.16 NEGATIVE PLEDGE an undertaking in form and content acceptable
               to the Agent duly executed and delivered by Navion covenanting
               not to create or permit to arise or continue any Encumbrance on
               or over all or any part of its assets or undertakings except for
               Permitted Liens.

     3.2  CONDITIONS SUBSEQUENT The Borrower undertakes to deliver or to cause
          to be delivered to the Agent on, or as soon as practicable after, the
          first Advance Date, the following additional documents and evidence:-

          3.2.1 LEGAL OPINIONS Such legal opinions as the Agent on behalf of the
               Banks shall require pursuant to Clause 3.1.9.

          3.2.2 COMPANIES ACT REGISTRATIONS Evidence that the prescribed
               particulars of the Security Documents have been delivered to the
               Registrar of Companies of England and Wales and any other
               relevant authorities within the statutory time limit.

     3.3  CONDITIONS PRECEDENT - SUBSEQUENT DRAWINGS Before any Bank shall have
          any obligation to advance any subsequent Drawings under the Facility,
          the Borrower shall deliver or cause to be delivered to the order of
          the Agent, a Drawdown Notice, in addition to the documents and
          evidence referred to in Clause 3.1 where such documents and evidence
          have not already been delivered to and received by the Agent.

                                       24

<PAGE>

     3.4  NO WAIVER If the Banks in their sole discretion agree to advance any
          part of the Facility to the Borrower before all of the documents and
          evidence required by Clause 3.1 or Clause 3.3 (as the case may be)
          have been delivered to or to the order of the Agent, the Borrower
          undertakes to deliver all outstanding documents and evidence to or to
          the order of the Agent no later than the date specified by the Agent,
          and the advance of any part of the Facility shall not be taken as a
          waiver of the Agent's right to require production of all the documents
          and evidence required by Clause 3.1 or Clause 3.3 (as the case may
          be).

     3.5  FORM AND CONTENT All documents and evidence delivered to the Agent
          pursuant to this Clause shall:-

          3.5.1 be in form and substance acceptable to the Agent;

          3.5.2 be accompanied, if required by the Agent, by translations into
               the English language, certified in a manner acceptable to the
               Agent;

          3.5.3 if required for registration purposes, be certified, notarised,
               legalised or attested in a manner acceptable to the Agent.

     3.6  EVENT OF DEFAULT No Bank shall be under any obligation to advance any
          part of its Commitment nor to act on any Drawdown Notice if, at the
          date of the Drawdown Notice or at the date on which the advance of a
          Drawing is requested in the Drawdown Notice, an Event of Default or
          Potential Event of Default shall have occurred, or if an Event of
          Default or Potential Event of Default would result from the advance of
          the Drawing in question.

4    REPRESENTATIONS AND WARRANTIES

     The Borrower represents and warrants to each of the Finance Parties at the
     date of this Agreement and (by reference to the facts and circumstances
     then pertaining) at the date of each Drawdown Notice, at each Advance Date
     and at each Interest Payment Date as follows except that the representation
     and warranty contained at Clause 4.6 shall only be made on the first
     Advance Date:-

     4.1  INCORPORATION AND CAPACITY Each of the Security Parties is a body
          corporate duly constituted, organised and validly existing and (where
          applicable) in good standing under the law of its country of
          incorporation, in each case with perpetual corporate existence and the
          power to sue and be sued, to own its assets and to

                                       25

<PAGE>

          carry on its business, and all of the corporate shareholders (if any)
          of each Security Party are duly constituted and existing under the
          laws of their countries of incorporation with perpetual corporate
          existence and the power to sue and be sued, to own their assets and to
          carry on their business and are acting on their own account.

     4.2  SOLVENCY None of the Security Parties or the Qualifying Security
          Parties is insolvent or in liquidation or administration or subject to
          any other insolvency procedure, and no receiver, administrative
          receiver, administrator, liquidator, trustee or analogous officer has
          been appointed in respect of any of the Security Parties or the
          Qualifying Security Parties or all or any part of their assets. For
          this purpose a Security Party or a Qualifying Security Party (as the
          case may be) will be deemed insolvent if it is unable to pay its debts
          within the meaning of S.123 of the Insolvency Act 1986.

     4.3  BINDING OBLIGATIONS The Security Documents and the Qualifying Security
          when duly executed and delivered will constitute the legal, valid and
          binding obligations of the Security Parties and the Qualifying
          Security Parties (as the case may be) enforceable in accordance with
          their respective terms subject to applicable laws regarding creditors'
          rights in general.

     4.4  SATISFACTION OF CONDITIONS All acts, conditions and things required to
          be done and satisfied and to have happened prior to the execution and
          delivery of the Security Documents and the Qualifying Security in
          order to constitute the Security Documents and the Qualifying Security
          the legal, valid and binding obligations of the Security Parties and
          the Qualifying Security Parties (as the case may be) in accordance
          with their respective terms have been done, satisfied and have
          happened in compliance with all applicable laws.

     4.5  REGISTRATIONS AND CONSENTS With the exception only of the
          registrations referred to in Clauses 3.2 all (if any) consents,
          licences, approvals and authorisations of, or registrations with or
          declarations to, any governmental authority, bureau or agency which
          may be required in connection with the execution, delivery,
          performance, validity or enforceability of the Security Documents and
          the Qualifying Security have been obtained or made and remain in full
          force and effect and the Borrower is not aware of any event or
          circumstance which could reasonably be expected adversely to affect
          the right of any of the Security Parties

                                       26

<PAGE>

          or the Qualifying Security Parties (as the case may be) to hold and/or
          obtain renewal of any such consents, licences, approvals or
          authorisations.

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

     4.7  NO MATERIAL LITIGATION Except for those matters disclosed in writing
          to the Agent, there is no action, suit, arbitration or administrative
          proceeding nor any contemplated action, suit, arbitration or
          administrative proceeding pending or to its knowledge about to be
          pursued before any court, tribunal or governmental or other authority
          which would, or would be likely to, have a materially adverse effect
          on the business, assets, financial condition or creditworthiness of
          the Navion Group.

     4.8  NO BREACH OF LAW OR CONTRACT The execution, delivery and performance
          of the Security Documents will not contravene any contractual
          restriction or any law binding on any of the Security Parties or on
          any shareholder (whether legal or beneficial) of any of the Security
          Parties, or the constitutional documents of any of the Security
          Parties, nor result in the creation of, nor oblige any of the Security
          Parties to create, any Encumbrance over all or any of its assets, with
          the exception of the Encumbrances created by or pursuant to the
          Security Documents.

     4.9  NO DEDUCTIONS Except as disclosed to the Agent in writing, that to the
          best of their knowledge belief and without undue enquiry, none of the
          Security Parties is required to make any deduction or withholding from
          any payment which it may be obliged to make to any of the Finance
          Parties under or pursuant to the Security Documents.

     4.10 USE OF FACILITY The Facility will be used for the purposes specified
          in the Recital.

     4.11 MATERIAL ADVERSE CHANGE There has been no material adverse change in
          the business, assets, operations, condition (financial or otherwise)
          or prospects of any company within the Navion Group or the Guarantor
          or in the facts and information regarding such entities as represented
          to date. In this clause material adverse change means, in the
          reasonable opinion of the Banks, a material adverse

                                       27

<PAGE>

          affect on (i) the ability of the Borrower to repay Drawings or perform
          its obligations under this Agreement or (ii) the ability of any
          Security Party to perform its material obligations under any document
          related to the Facility or (iii) the business, property, assets,
          liabilities, operations, condition (financial or otherwise) or
          prospects of any Security Party.

     4.12 INTERCOMPANY LOAN AGREEMENT The Intercompany Loan Agreement delivered
          to the Agent constitutes the entire agreement between the Borrower and
          the Intercompany Borrower in relation to the Intercompany Indebtedness
          and there are no side letters, security documents or other related
          agreements nor fees payable in connection therewith which have not
          been disclosed to the Agent.

5    REPAYMENT AND PREPAYMENT

     5.1  REPAYMENT Each Drawing shall be repaid by the Borrower to the Agent on
          behalf of the Banks on the last day of its Interest Period unless the
          Borrower selects a further Interest Period for that Drawing in
          accordance with Clause 6, provided that the Borrower shall not be
          permitted to select such further Interest Period if an Event of
          Default or Potential Event of Default has occurred and shall then be
          obliged to repay such Drawing on the last day of its then current
          Interest Period. The Borrower shall on the Termination Date repay to
          the Agent as agent for the Banks all Facility Outstandings.

     5.2  PREPAYMENT The Borrower may prepay the Facility Outstandings in whole
          or in part in integral multiples of five million Dollars ($5,000,000)
          (or as otherwise may be agreed by the Agent) provided that it has
          first given to the Agent not fewer than five (5) Business Days' prior
          written notice expiring on a Business Day of its intention to do so.
          Any notice pursuant to this Clause 5.2 once given shall be irrevocable
          and shall oblige the Borrower to make the prepayment referred to in
          the notice on the Business Day specified in the notice, together with
          all interest accrued on the amount prepaid up to and including that
          Business Day.

     5.3  PREPAYMENT INDEMNITY If the Borrower shall, subject always to Clause
          5.2, make a prepayment on a Business Day other than the last day of an
          Interest Period, it shall pay to the Agent on behalf of the Banks any
          amount which is necessary to compensate the Banks for any Break Costs
          incurred by the Agent or any of the Banks as a result of the
          prepayment in question.

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<PAGE>

     5.4  APPLICATION OF PREPAYMENTS Any prepayment in an amount less than the
          Indebtedness shall be applied in satisfaction or reduction first of
          any costs and other expenses outstanding; secondly of all interest
          accrued with respect to the outstanding Drawings; and thirdly of the
          outstanding Drawings as the Borrower may specify.

     5.5  REBORROWING OF PREPAYMENTS Any amount prepaid pursuant to this
          Agreement may be reborrowed in accordance with Clause 2.4.

6    INTEREST

     6.1  INTEREST PERIODS The period during which any Drawing shall be
          outstanding pursuant to this Agreement shall be divided into
          consecutive Interest Periods of one, three or six months' duration, as
          selected by the Borrower by written notice to the Agent not later than
          11.00 a.m. on the fourth Business Day before the beginning of the
          Interest Period in question, or such other duration as may be agreed
          by the Banks in their discretion. No more than five one (1) month
          Interest Periods may be selected by the Borrower in each calendar year
          during the Facility Period.

     6.2  BEGINNING AND END OF INTEREST PERIODS The first Interest Period in
          respect of each Drawing shall begin on the Advance Date of that
          Drawing and shall end on the last day of the Interest Period selected
          in accordance with Clause 6.1. Any subsequent Interest Period selected
          in respect of each Drawing shall commence on the day following the
          last day of its previous Interest Period and shall end on the last day
          of its current Interest Period selected in accordance with Clause 6.1.
          However, in respect of any Drawings outstanding on the Termination
          Date, the Interest Period applicable to such Drawings shall end on the
          Termination Date.

     6.3  INTEREST RATE During each Interest Period, interest shall accrue on
          each Drawing at the rate determined by the Agent to be the aggregate
          of (a) the Margin (b) LIBOR and (c), if applicable, the Mandatory Cost
          determined at or about 11.00 a.m. (London time) on the second Business
          Day prior to the beginning of the Interest Period relating to that
          Drawing.

     6.4  ACCRUAL AND PAYMENT OF INTEREST During the Facility Period, interest
          shall accrue from day to day, shall be calculated on the basis of a
          360 day year and the actual number of days elapsed (or, in any
          circumstance where market practice

                                       29

<PAGE>

          differs, in accordance with the prevailing market practice) and shall
          be paid by the Borrower to the Agent on behalf of the Banks on the
          last day of each Interest Period and additionally, during any Interest
          Period exceeding three months, on the last day of each successive
          three month period after the beginning of that Interest Period.

     6.5  ENDING OF INTEREST PERIODS If any Interest Period would end on a day
          which is not a Business Day, that Interest Period shall end on the
          next succeeding Business Day (unless the next succeeding Business Day
          falls in the next calendar month, in which event the Interest Period
          in question shall end on the next preceding Business Day).

     6.6  DEFAULT RATE If an Event of Default shall occur, the whole of the
          Indebtedness shall, from the date of the occurrence of the Event of
          Default, bear interest up to the date of actual payment (both before
          and after judgment) at the Default Rate, compounded at such intervals
          as the Agent shall in its reasonable discretion determine, which
          interest shall be payable from time to time by the Borrower to the
          Agent on behalf of the Banks on demand.

     6.7  DETERMINATIONS CONCLUSIVE Each determination of an interest rate made
          by the Agent in accordance with Clause 6 shall (save in the case of
          manifest error or on any question of law) be final and conclusive.

7    FEES

     7.1  FEE LETTERS The Borrower shall pay to or to the order of the Agent,
          the Arrangers or the Book Runners (as the case may be), the fees,
          commissions and other sums referred to in the relevant Fee Letters in
          the amounts and on the dates set out in the relevant Fee Letters.

     7.2  COMMITMENT COMMISSION The Borrower shall pay to the Agent Commitment
          Commission in Dollars at the Commission Rate on any undrawn and
          uncancelled part of the Facility. The Commitment Commission will
          accrue from day to day on the basis of a 360 day year and the actual
          number of days elapsed and shall be paid quarterly in arrears from 30
          September 2006 until the Commitment Termination Date with a pro rata
          payment being due and payable on the Commitment Termination Date.

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<PAGE>

8    SECURITY DOCUMENTS

     8.1  As security for the repayment of the Indebtedness, the Borrower
          executed and delivered to the Agent or caused to be executed and
          delivered to the Agent, on or before the first Advance Date, the
          following Security Documents in such forms and containing such terms
          and conditions as the Agent required:-

          8.1.1 THE ASSIGNMENT a deed of assignment of the Intercompany
               Indebtedness;

          8.1.2 SHARES CHARGE an assignment by the Borrower of a charge over the
               issued share capital of Navion entered into by the Intercompany
               Borrower as security for its obligations under the Intercompany
               Loan Agreement.

     8.2  As further security for the repayment of the Indebtedness, the
          Borrower has caused to be executed and delivered to the Agent the
          following Security Documents:-

          8.2.1 THE FIRST QUALIFYING SECURITY ASSIGNMENT a deed of assignment of
               the First Qualifying Security Documents;

          8.2.2 THE TNOL ASSIGNMENT AND SUBORDINATION AGREEMENTS the deeds of
               assignment and subordination in relation to the TNOL Vessels; and

          8.2.3 THE GUARANTEE the guarantee and indemnity of the Guarantor in
               respect of the Borrower's Obligations.

9    AGENCY AND TRUST

     9.1  APPOINTMENT Each of the Banks and each of the Arrangers appoints the
          Agent its agent for the purpose of administering the Facility and the
          Security Documents and authorises the Agent and its directors,
          officers, employees and agents acting on the instructions from time to
          time of the Majority Banks, and subject to Clauses 9.4 and 9.19, to
          execute the Security Documents on its behalf and to exercise all
          rights, powers, discretions and remedies vested in the Banks under or
          pursuant to the Security Documents, together with all powers
          reasonably incidental to them.

     9.2  AUTHORITY Each of the Banks and the Arrangers irrevocably authorises
          the Agent, acting on the instructions from time to time of the
          Majority Banks (save where the

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<PAGE>

          terms of any Security Document expressly require the instructions of
          all of the Banks):-

          9.2.1 to give or withhold any consents or approvals; and

          9.2.2 to exercise, or refrain from exercising, any discretions; and

          9.2.3 to collect, receive, release or pay any money;

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

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

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

          9.3.2 the Banks acknowledge that the Agent shall be under no
               obligation to insure any property nor to require any other person
               to insure any

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<PAGE>

               property and shall not be responsible for any loss which may be
               suffered by any person as a result of the lack or insufficiency
               of any insurance; and

          9.3.3 the Agent and the Banks agree that the perpetuity period
               applicable to the trusts declared by this Agreement shall be the
               period of eighty years from the Execution Date.

     9.4  LIMITATIONS ON AUTHORITY Except with the prior written consent of each
          of the Banks, the Agent shall not be entitled to :-

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

          9.4.2 except as otherwise provided in this Agreement, agree to waive
               the payment of any sum of money payable by any of the Security
               Parties under the Security Documents; nor

          9.4.3 change the meaning of the expression "MAJORITY BANKS"; nor

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

          9.4.5 extend the due date for the payment of any sum of money payable
               by any of the Security Parties under the Security Documents; nor

          9.4.6 take or refrain from taking any step if the effect of such
               action or inaction may lead to the increase of the obligations of
               a Bank under any of the Security Documents; nor

          9.4.7 agree to change the currency in which any sum is payable under
               the Security Documents; nor

          9.4.8 agree to amend this Clause 9.4; nor

          9.4.9 agree to amend the definition of "MARGIN".

     9.5  LIABILITY Neither the Agent nor any of its directors, officers,
          employees or agents shall be liable to the Banks or the Arrangers for
          anything done or omitted to be

                                       33
<PAGE>

          done by the Agent under or in connection with the Security Documents
          unless as a result of the Agent's wilful misconduct or gross
          negligence.

     9.6  ACKNOWLEDGEMENT Each of the Banks and the Arrangers acknowledges
          that:-

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

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

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

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

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

     9.7  LIMITATIONS ON RESPONSIBILITY The Agent shall have no responsibility
          to any of the Security Parties or to the Banks or to the Arrangers on
          account of:-

          9.7.1 the failure of a Bank or of any of the Security Parties to
               perform any of their respective obligations under the Security
               Documents;

          9.7.2 the financial condition of any of the Security Parties;

          9.7.3 the completeness or accuracy of any statements, representations
               or warranties made in or pursuant to any of the Security
               Documents, or in

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<PAGE>

               or pursuant to any document delivered pursuant to or in
               connection with any of the Security Documents;

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

     9.8  THE AGENT'S RIGHTS The Agent may:-

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

          9.8.2 assume that no Event of Default or Potential Event of Default
               has occurred unless, in its capacity as the Agent, it has
               acquired actual knowledge to the contrary; and

          9.8.3 rely on any document or Communication believed by it to be
               genuine; and

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

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

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

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     9.9  THE AGENT'S DUTIES The Agent shall:-

          9.9.1 if requested in writing to do so by a Bank, make enquiry and
               advise the Banks as to the performance or observance of any of
               the provisions of the Security Documents by any of the Security
               Parties or as to the existence of an Event of Default; and

          9.9.2 inform the Banks promptly of any Event of Default of which the
               Agent has actual knowledge; and

          9.9.3 inform the Banks promptly of any disclosures in writing received
               by the Agent pursuant to Clause 4.7.

     9.10 NO DEEMED KNOWLEDGE The Agent shall not be deemed to have actual
          knowledge of the falsehood or incompleteness of any representation or
          warranty made or deemed repeated by any of the Security Parties or
          actual knowledge of the occurrence of any Event of Default or
          Potential Event of Default unless a Bank or any of the Security
          Parties shall have given written notice thereof to the Agent.

     9.11 OTHER BUSINESS The Agent may, without any liability to account to the
          Banks or the Arrangers, generally engage in any kind of banking or
          trust business with any of the Security Parties or any of their
          respective Subsidiaries or associated companies or with a Bank as if
          it were not the Agent.

     9.12 INDEMNITY The Banks shall, promptly on the Agent's request, reimburse
          the Agent in their respective Proportionate Shares, for, and keep the
          Agent fully indemnified in respect of:-

          9.12.1 all amounts payable by the Borrower to the Agent pursuant to
               Clause 17 (other than under Clauses 17.3 and 17.4) to the extent
               that those amounts are not paid by the Borrower;

          9.12.2 all liabilities, damages, costs and claims sustained or
               incurred by the Agent in connection with the Security Documents,
               or the performance of its duties and obligations, or the exercise
               of its rights, powers, discretions or remedies under or pursuant
               to any of the Security Documents; or in connection with any
               action taken or omitted by the Agent under or pursuant to any of
               the Security Documents, unless in

                                       36

<PAGE>

               any case those liabilities, damages, costs or claims arise solely
               from the Agent's wilful misconduct or gross negligence.

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

     9.14 DISTRIBUTION OF PAYMENTS The Agent shall pay promptly to the order of
          each of the Banks that Bank's Proportionate Share of every sum of
          money received by the Agent pursuant to the Security Documents (with
          the exception of any amounts payable pursuant to Clause 7.1 and/or the
          Fee Letters and any amounts which, by the terms of the Security
          Documents, are paid to the Agent for the account of the Agent alone or
          specifically for the account of one or more Banks, the Arrangers or
          the Book Runners) and until so paid such amount shall be held by the
          Agent on trust absolutely for that Bank or the Arrangers (or as the
          case may be).

     9.15 REIMBURSEMENT The Agent shall have no liability to pay any sum to a
          Bank or to the Arrangers until it has itself received payment of that
          sum. If, however, the Agent does pay any sum to a Bank or to the
          Arrangers on account of any amount prospectively due to it pursuant to
          Clause 9.14 before it has itself received payment of that amount, and
          the Agent does not in fact receive payment within five Business Days
          after the date on which that payment was required to be made by the
          terms of the Security Documents or the Mortgagees' Insurances, the
          recipient will, on demand by the Agent, refund to the Agent an amount
          equal to the amount received by it, together with an amount sufficient
          to reimburse the Agent for any amount which the Agent may certify that
          it has been required to pay by way of interest on money borrowed to
          fund the amount in question during the period beginning on the date on
          which that amount was required to be paid by the terms of the Security
          Documents or the Mortgagees' Insurances and ending on the date on
          which the Agent receives reimbursement.

                                       37

<PAGE>

     9.16 REDISTRIBUTION OF PAYMENTS Unless otherwise agreed between the Finance
          Parties, if at any time a Bank receives or recovers by way of set-off,
          the exercise of any lien or otherwise (other than from any assignee or
          transferee of or sub-participant in that Bank's Commitment), an amount
          greater than that Bank's Proportionate Share of any sum due from any
          of the Security Parties under the Security Documents (the amount of
          the excess being referred to in this Clause as the "EXCESS AMOUNT")
          then:-

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

          9.16.2 that Bank shall pay to the Agent an amount equal to the Excess
               Amount within ten days of its receipt or recovery of the Excess
               Amount; and

          9.16.3 the Agent shall treat that payment as if it were a payment by
               the Security Party in question on account of the sum owed to the
               Banks as aforesaid and shall account to the Banks in respect of
               the Excess Amount in accordance with the provisions of this
               Clause.

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

     9.18 RESCISSION OF EXCESS AMOUNT If all or any part of any Excess Amount is
          rescinded or must otherwise be restored to any of the Security Parties
          or to any other third party, the Banks which have received any part of
          that Excess Amount by way of distribution from the Agent pursuant to
          Clause 9.16 shall repay to the Agent for the account of the Bank which
          originally received or recovered the Excess Amount, the amount which
          shall be necessary to ensure that the Banks share rateably in
          accordance with their Proportionate Shares in the amount of the
          receipt or payment retained, together with interest on that amount at
          a rate equivalent to that (if any) paid by the Bank receiving or
          recovering the Excess Amount to the person to whom that Bank is liable
          to make payment in respect of such amount, and Clause 9.16.3 shall
          apply only to the retained amount.

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<PAGE>

     9.19 PROCEEDINGS Each of the Finance Parties shall notify one another of
          the proposed commencement of any Proceedings under any of the Security
          Documents prior to their commencement. No such Proceedings may be
          commenced without the prior written consent of the Majority Banks.

     9.20 INSTRUCTIONS Where the Agent is authorised or directed to act or
          refrain from acting in accordance with the instructions of the Banks
          or of the Majority Banks each of the Banks shall provide the Agent
          with instructions within seven Business Days of the Agent's written
          request. If a Bank does not provide the Agent with instructions within
          that period, (i) that Bank shall be bound by the decision of the
          Agent, (ii) that Bank shall have no vote for the purposes of this
          Clause and (iii) the combined Proportionate Shares of the other Banks
          who provided such instructions shall be deemed to contribute 100%.
          Nothing in this Clause shall limit the right of the Agent to take, or
          refrain from taking, any action without obtaining the instructions of
          the Banks if the Agent in its discretion considers it necessary or
          appropriate to take, or refrain from taking, such action in order to
          preserve the rights of the Banks under or in connection with the
          Security Documents. In that event, the Agent will notify the Banks of
          the action taken by it as soon as reasonably practicable, and the
          Banks agree to ratify any action taken by the Agent pursuant to this
          Clause.

     9.21 COMMUNICATIONS Any Communication under this Clause shall be given,
          delivered, made or served, in the case of the Agent (in its capacity
          as Agent or as one of the Banks), and in the case of the other Banks,
          at the address indicated in Schedule 1 or such other addresses as
          shall be duly notified in writing to the Agent on behalf of the Banks.

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

     9.23 RETIREMENT Subject to a successor being appointed in accordance with
          this Clause, the Agent may retire as agent and/or security trustee at
          any time without assigning any reason by giving to the Borrower and
          the other Finance Parties notice of its intention to do so, in which
          event the following shall apply:-

          9.23.1 with the consent of the Borrower, not to be unreasonably
               withheld, the other Finance Parties may within thirty days after
               the date of the Agent's

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<PAGE>

               notice appoint a successor to act as agent and/or security
               trustee or, if they fail to do so with the consent of the
               Borrower, not to be unreasonably withheld, the Agent may appoint
               any other bank or financial institution as its successor;

          9.23.2 the resignation of the Agent shall take effect simultaneously
               with the appointment of its successor on written notice of that
               appointment being given to the Borrower and the other Finance
               Parties;

          9.23.3 the Agent shall thereupon be discharged from all further
               obligations as agent and/or security trustee but shall remain
               entitled to the benefit of the provisions of this Clause;

          9.23.4 the Agent's successor and each of the other parties to this
               Agreement shall have the same rights and obligations amongst
               themselves as they would have had if that successor had been a
               party to this Agreement.

     9.24 NO FIDUCIARY RELATIONSHIP Except as provided in Clauses 9.3 and 9.14,
          the Agent shall not have any fiduciary relationship with or be deemed
          to be a trustee of or for a Bank or the Arrangers and nothing
          contained in any of the Security Documents shall constitute a
          partnership between any two or more Banks or between the Agent and any
          Bank or the Arrangers.

     9.25 THE AGENT AS A BANK The expression "THE BANKS" when used in the
          Security Documents includes the Agent in its capacity as one of the
          Banks. The Agent shall be entitled to exercise its rights, powers,
          discretions and remedies under or pursuant to the Security Documents
          in its capacity as one of the Banks in the same manner as any other
          Bank and as if it were not also the Agent.

     9.26 THE AGENT AS SECURITY TRUSTEE Unless the context otherwise requires,
          the expression "THE AGENT" when used in the Security Documents
          includes the Agent acting in its capacities both as agent and security
          trustee.

10   COVENANTS

     The Borrower covenants with the Finance Parties in the following terms.

                                       40

<PAGE>

     10.1 NEGATIVE COVENANTS

          The Borrower will not and will procure that no member of the
          Covenanting Group will:-

          10.1.1 NO THIRD PARTY RIGHTS without the Majority Banks' prior written
               consent, create or permit to arise or continue any Encumbrance on
               or over all or any part of the Vessels or their Earnings or
               Insurances except for Permitted Liens or Encumbrances arising in
               connection with the financing of the organic compound equipment
               provided on a non-recourse basis to the Borrower; nor

          10.1.2 NO OTHER BUSINESS materially change the nature of its business
               from that carried on as at the Execution Date (and for the
               purpose of this Clause, a change of business shall be deemed
               "material" if the turnover of any new or changed business
               constitutes seven point five per cent (7.5%) or more of the
               aggregate turnover of the relevant entity within the Covenanting
               Group); nor

          10.1.3 MERGER OR AMALGAMATION without the prior written consent of the
               Majority Banks, permit any merger or amalgamation with a company
               outside the Navion Group provided that the Borrower shall notify
               the Agent, in the case of a merger or amalgamation within the
               Navion Group; nor

          10.1.4 QUALIFYING SECURITY without the prior written consent of the
               Banks, make or cause to be made any amendment, variation,
               supplement or release to, or transfer or novation of, the
               Qualifying Security.

     10.2 POSITIVE COVENANTS

          10.2.1 FINANCIAL STATEMENTS The Borrower will supply to the Agent,
               without request, the Guarantor's Accounts for each financial year
               of the Guarantor ending during the Facility Period, containing
               (amongst other things) the Guarantor's profit and loss account
               for, and balance sheet at the end of, each such financial year,
               in each case within one hundred and fifty days of the end of the
               financial year to which they relate and the Guarantor's quarterly
               unaudited management accounts within 90 days of the end of the
               quarter to which they relate, and such financial

                                       41

<PAGE>

               statements shall accurately and fairly represent the financial
               condition of the Guarantor.

          10.2.2 OTHER INFORMATION The Borrower will promptly supply to the
               Agent such information and explanations as the Majority Banks may
               from time to time reasonably require in connection with the
               operation of the Vessels and the Guarantor Group's profit and
               liquidity, and will procure that the Agent be given the like
               information and explanations relating to all other Security
               Parties and the Qualifying Security Parties.

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

          10.2.4 NOTIFICATION OF EVENT OF DEFAULT The Borrower will immediately
               notify the Agent in writing of the occurrence of any Event of
               Default or Potential Event of Default or any event which will
               materially adversely affect the Borrower's or the Guarantor's
               ability to perform its obligations under the Security Documents
               to which it is a party or the ability of any of the other
               Security Parties to perform any of their material obligations
               under any of the Security Documents to which they are a party or
               may become a party to.

          10.2.5 PARI PASSU The Borrower shall ensure that its respective
               obligations under this Agreement shall at all times rank at least
               pari passu with all of its other present and future unsecured and
               unsubordinated indebtedness with the exception of any obligations
               which are mandatorily preferred by any applicable laws to
               companies generally and not by contract.

          10.2.6 CORPORATE EXISTENCE Save as permitted by Clause 10.1.3, the
               Borrower shall ensure that throughout the Facility Period each of
               the Security Parties and the Qualifying Security Parties shall
               (i) remain duly formed and validly existing under the laws of its
               respective jurisdiction of incorporation (ii) remain authorised
               to do business in the jurisdiction in which it transacts its
               business (iii) continue to have the power to carry on its
               business as it is now being conducted and to enter into and
               perform its obligations under the Transaction Documents to which
               it is a

                                       42

<PAGE>

               party and (iv) continue to comply with all laws, statutory,
               regulatory and other requirements relative to its business which
               could reasonably be expected to have a material adverse effect on
               its business, assets or operations, financial or otherwise.

          10.2.7 ADMISSIBILITY IN EVIDENCE The Borrower shall on the request of
               the Agent obtain all necessary authorisations, consents,
               approvals, licences, exemptions, filings, registrations,
               recordings and notarisations required or advisable in connection
               with the admissibility in evidence of the Security Documents or
               any of them in Proceedings in England or any other jurisdiction
               in which Proceedings have been commenced.

     10.3 VALUATIONS Deliver to the Agent a Valuation of each of the Vessels on
          the due date for delivery of the financial statements of the Guarantor
          and on such other occasions as the Agent may reasonably request.

     10.4 GUARANTOR'S FINANCIAL COVENANTS At any time during the Facility
          Period, the Borrower shall procure that on a consolidated basis:-

          10.4.1 the Guarantor Group maintains Free Liquidity and undrawn
               committed revolving credit lines (including under this Agreement
               but excluding committed revolving credit lines with less than six
               months to maturity) of not less than seventy five million Dollars
               ($75,000,000) in aggregate; and

          10.4.2 the aggregate of the Free Liquidity of the Guarantor Group and
               undrawn committed revolving credit lines (including under this
               Agreement but excluding committed revolving credit lines with
               less than 6 months to maturity) shall not be less than five per
               cent (5%) of its Total Debt.

     10.5 DIVIDENDS Provided that the Intercompany Indebtedness shall at all
          times be equal to or greater than the Indebtedness and no Event of
          Default has occurred and is continuing (but not otherwise) the
          Borrower may:-

          10.5.1 pay any dividends or make any other distributions to
               shareholders; and/or

          10.5.2 make any loan or other similar financial support available to
               any third party or any member of the Navion Group.

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<PAGE>

     10.6 INTERCOMPANY LOAN Upon the written request of the Agent, the Borrower
          shall deliver a certificate to the Agent confirming the amount
          outstanding under the Intercompany Loan Agreement, which shall at all
          times be at least equal to the aggregate of the Facility Outstandings
          and all unpaid interest, costs and expenses under this Agreement.

11   EARNINGS

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

12   EVENTS OF DEFAULT

     12.1 THE AGENT'S RIGHTS If any of the events set out in Clause 12.2 occurs,
          the Agent may at its discretion (and, on the instructions of the
          Majority Banks, will) by notice to the Borrower declare the Banks to
          be under no further obligation to the Borrower under or pursuant to
          this Agreement and may (and, on the instructions of the Majority
          Banks, will) declare all or any part of the Indebtedness (including
          such unpaid interest as shall have accrued) to be immediately payable,
          whereupon the Indebtedness (or the part of the Indebtedness referred
          to in the Agent's notice) shall immediately become due and payable
          without any further demand or notice of any kind.

     12.2 EVENTS OF DEFAULT The events referred to in Clause 12.1 are:-

          12.2.1 PAYMENT DEFAULT if the Borrower defaults in the payment of any
               part of the Indebtedness when due PROVIDED ALWAYS that if the
               Borrower can demonstrate to the reasonable satisfaction of the
               Agent that it has given all necessary instructions to effect
               payment and the non-receipt thereof is attributable to an error
               in the banking system, such Event of Default shall only occur (i)
               three (3) Business Days after such payment fell due if it relates
               to principal, (ii) five (5) Business Days after such payment fell
               due if it relates to a scheduled payment which is not principal
               and (iii) ten Business Days after such payment fell due if it
               relates to a payment on demand; or

          12.2.2 OTHER DEFAULT if any of the Security Parties or the Qualifying
               Security Parties fails to observe or perform any of the
               covenants, conditions,

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<PAGE>

               undertakings, agreements or obligations (other than those
               relating to Insurances) on its part contained in any of the
               Transaction Documents (other than a TNOL Bareboat Charter) or
               shall in any other way be in breach of or do or cause to be done
               any act repudiating or evidencing an intention to repudiate any
               of the Transaction Documents (other than a TNOL Bareboat Charter)
               and such default (if in the reasonable opinion of the Majority
               Banks capable of remedy) is not remedied within thirty (30) days
               after notice of the default has been given to the Borrower; or

          12.2.3 MISREPRESENTATION OR BREACH OF WARRANTY if any representation,
               warranty or statement made, deemed to be made, or repeated under
               any of the Security Documents or in any accounts, certificate,
               notice instrument, written statement or opinion delivered by a
               Security Party under or in connection with any Security Document
               is incorrect or misleading in any material respect when made,
               deemed to be made or repeated; or

          12.2.4 EXECUTION if a distress or execution or other process of a
               court or authority is levied on any of the property of any of the
               Security Parties or any other member of the Navion Group before
               or after final judgment or by order of any competent court or
               authority for an amount in excess of five million Dollars
               ($5,000,000) or its equivalent in any other currency and is not
               satisfied or stayed (with a view to being contested in good
               faith) within fourteen days of levy or any other applicable cure
               period (if longer); or

          12.2.5 INSOLVENCY EVENTS if any of the Security Parties:-

               (a)  resolves to appoint, or applies for, or consents to the
                    appointment of, a receiver, administrative receiver,
                    trustee, administrator or liquidator of itself or of all or
                    part of its assets other than for the purposes of a merger
                    or amalgamation pursuant to Clause 10.1.3; or

               (b)  is unable or admits its inability to pay its debts as they
                    fall due; or

               (c)  makes a general assignment for the benefit of creditors; or

               (d)  ceases trading or threatens to cease trading; or

                                       45

<PAGE>

               (e)  has appointed an Inspector under the Companies Act 1985 or
                    any statutory provision which the Agent in its discretion
                    considers analogous thereto; or

          12.2.6 INSOLVENCY PROCEEDINGS if any proceedings are commenced or
               threatened, or any order or judgment is given by any court, for
               the bankruptcy, liquidation, winding up, administration or
               re-organisation of any of the Security Parties or any other
               member of the Navion Group or for the appointment of a receiver,
               administrative receiver, administrator, liquidator or trustee of
               any of the Security Parties or any other member of the Navion
               Group or of all or any material part of the assets of any of the
               Security Parties or any other member of the Navion Group, or if
               any person appoints or purports to appoint such receiver,
               administrative receiver, administrator, liquidator or trustee
               which proceeding is not discharged within thirty (30) days of its
               commencement; or

          12.2.7 IMPOSSIBILITY OR ILLEGALITY unless covered by Clause 15.7, if
               any event occurs which would, or would with the passage of time,
               render performance of any of the Security Documents impossible,
               unlawful or unenforceable by the Banks or the Agent; or

          12.2.8 CONDITIONS SUBSEQUENT if any of the conditions set out in
               Clause 3.2 is not satisfied within the time reasonably required
               by the Agent; or

          12.2.9 REVOCATION OR MODIFICATION OF CONSENTS ETC. if any material
               consent, licence, approval or authorisation which is now or which
               at any time during the Facility Period becomes necessary to
               enable any of the Security Parties to comply with any of their
               obligations in or pursuant to any of the Security Documents is
               revoked, withdrawn or withheld, or modified in a manner which the
               Agent reasonably considers is, or may be, prejudicial to the
               interests of the Banks in a material manner, or any material
               consent, licence, approval or authorisation ceases to remain in
               full force and effect; or

          12.2.10 CURTAILMENT OF BUSINESS if the business of any of the Security
               Parties is wholly or materially curtailed by any intervention by
               or under authority of any government, or if all or a substantial
               part of the undertaking,

                                       46

<PAGE>

               property or assets of any of the Security Parties is seized,
               nationalised, expropriated or compulsorily acquired by or under
               authority of any government or any Security Party disposes or
               threatens to dispose of a substantial part of its business or
               assets; or

          12.2.11 ACCELERATION OF OTHER INDEBTEDNESS if any other indebtedness
               of any Security Party or any Material Subsidiary is not paid when
               due (or within any applicable grace period) or any indebtedness
               of any Security Party or any Material Subsidiary is declared to
               be or otherwise becomes due and payable prior to its specified
               maturity where (in either case) the aggregate of all such unpaid
               or accelerated indebtedness (i) of the Guarantor is equal to or
               greater than fifty million Dollars ($50,000,000) or its
               equivalent in any other currency; or (ii) of the Borrower, or any
               Material Subsidiary is equal to or greater than twenty five
               million Dollars ($25,000,000) or its equivalent in any other
               currency; or

          12.2.12 REDUCTION OF CAPITAL if any of the members of the Navion Group
               reduces its authorised or issued or subscribed capital except
               reductions effected in compliance with Clause 10.1.3; or

          12.2.13 CHALLENGE TO REGISTRATION if the registration of any Vessel or
               any Mortgage becomes void or voidable or liable to cancellation
               or termination; or

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

          12.2.15 NOTICE OF TERMINATION if the Guarantor gives notice to the
               Agent to determine its obligations under the Guarantee; or

          12.2.16 MATERIAL ADVERSE CHANGE if at any time there shall occur a
               change in the business or operations of a Security Party or a
               change in the financial condition of any Security Party which, in
               the reasonable opinion of the Majority Banks, materially impairs
               such Security Party's ability to discharge its obligations under
               the Security Documents in the manner provided therein and such
               change, if capable of remedy, is not

                                       47

<PAGE>

               so remedied within 15 days of the delivery of a notice confirming
               such change by the Agent to the relevant Security Party; or

          12.2.17 FINAL JUDGEMENTS if any of the Security Parties fails to
               comply with any non appealable court order or fails to pay a
               final unappealable judgment against it, in either case, in excess
               of one million Dollars ($1,000,000) which remains unsettled for
               fourteen (14) days; or

          12.2.18 INTERCOMPANY LOAN AGREEMENT if any default (other than on the
               part of the Intercompany Agent) occurs under the Intercompany
               Loan Agreement or if the Intercompany Agent is removed (or steps
               are taken to try to remove it) from its position as agent
               thereunder or if the Borrower (i) obstructs the Intercompany
               Agent from performance of its delegated duties or (ii) attempts
               to revoke the authority and discretion it has granted to the
               Intercompany Agent, under clause 10.3(b) of the Intercompany Loan
               Agreement; or

          12.2.19 QUALIFYING SECURITY if any amendment, variation, supplement,
               release, transfer or novation is made or effected in relation to
               the Qualifying Security without the prior written consent of the
               Banks; or

          12.2.20 TNOL BAREBOAT CHARTERS if the TNOL Bareboat Charters or any of
               them are terminated prior to the Termination Date without the
               prior written consent of the Agent; or

          12.2.21 INSURANCES if any Security Party fails to effect or maintain
               the Insurances in the manner required by the relevant Security
               Documents or the First Qualifying Security Documents (as the case
               may be).

13   SET-OFF AND LIEN

     13.1 SET-OFF The Borrower irrevocably authorises each of the Finance
          Parties at any time after all or any part of the Indebtedness shall
          have become due and payable to set off without notice any liability of
          the Borrower to any of the Finance Parties (whether present or future,
          actual or contingent, and irrespective of the branch or office,
          currency or place of payment) against any credit balance from time to
          time standing on any account of the Borrower (whether current or
          otherwise and whether or not subject to notice) with any branch of any
          of the Finance Parties in or towards satisfaction of the Indebtedness
          and, in the name of that Finance Party

                                       48

<PAGE>

          or the Borrower, to do all acts (including, without limitation,
          converting or exchanging any currency) and execute all documents which
          may be required to effect such application.

     13.2 LIEN If an Event of Default has occurred and is continuing, each
          Finance Party shall have a lien on and be entitled to retain and
          realise as additional security for the repayment of the Indebtedness
          any cheques, drafts, bills, notes or negotiable or non-negotiable
          instruments and any stocks, shares or marketable or other securities
          and property of any kind of the Borrower (or of that Finance Party as
          agent or nominee of the Borrower) from time to time held by that
          Finance Party, whether for safe custody or otherwise.

     13.3 RESTRICTIONS ON WITHDRAWAL Despite any term to the contrary in
          relation to any deposit or credit balance at any time on any account
          of the Borrower with any of the Finance Parties, no such deposit or
          balance shall be repayable or capable of being assigned, mortgaged,
          charged or otherwise disposed of or dealt with by the Borrower after
          an Event of Default has occurred and while such Event of Default is
          continuing, but any Finance Party may from time to time permit the
          withdrawal of all or any part of any such deposit or balance without
          affecting the continued application of this Clause.

     13.4 APPLICATION Whilst an Event of Default is continuing, the Borrower
          irrevocably authorises the Agent to apply all sums which the Agent may
          receive:-

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

          13.4.2 by way of payment to the Agent of any sum in respect of the
               Insurances, Earnings or Requisition Compensation of a Vessel; or

          13.4.3 otherwise arising under or in connection with any of the
               Security Documents

          in or towards satisfaction, or by way of retention on account, of the
          Indebtedness, in such manner as the Agent may in its discretion
          determine.

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14   ASSIGNMENT AND SUB-PARTICIPATION

     14.1 RIGHT TO ASSIGN Each of the Banks may assign or transfer all or any of
          its rights under or pursuant to the Security Documents or grant
          sub-participations in all or any part of its Commitment to any other
          branch of that Bank or (with the prior written consent of the Borrower
          which shall not be unreasonably withheld and which shall be deemed
          given if the Borrower fails to respond to any written request under
          this provision within a period of ten (10) Business Days) to any other
          bank or financial institution, provided that such assignment or
          transfer or sub-participation does not result in the Borrower being
          subject to any additional Tax or other financial or legal obligations
          other than those contemplated by the terms of this Agreement at the
          time of such assignment, transfer or sub-participation.

     14.2 BORROWER'S CO-OPERATION The Borrower will co-operate fully with the
          Banks in connection with any assignment, transfer or sub-participation
          pursuant to Clause 14.1; will execute and procure the execution of
          such documents as the Banks may require in connection therewith; and
          irrevocably authorises each of the Finance Parties to disclose to any
          proposed assignee, transferee or sub-participant (whether before or
          after any assignment, transfer or sub-participation and whether or not
          any assignment, transfer or sub-participation shall take place) all
          information relating to the Security Parties, the Facility or the
          Security Documents which each such Finance Party may in its discretion
          consider necessary or desirable (subject to any duties of
          confidentiality applicable to the Banks generally).

     14.3 RIGHTS OF ASSIGNEE Any assignee, transferee or sub-participant of a
          Bank shall (unless limited by the express terms of the assignment,
          transfer or sub-participation) take the full benefit of every
          provision of the Security Documents benefiting that Bank.

     14.4 TRANSFER CERTIFICATES If any Bank wishes to transfer all or any of its
          Commitment as contemplated in Clause 14.1 then such transfer may be
          effected by the delivery to the Agent of a duly completed and duly
          executed Transfer Certificate in which event, on the later of the
          Transfer Date specified in such Transfer Certificate and the fifth
          Business Day after the date of delivery of such Transfer Certificate
          to the Agent:

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<PAGE>

          14.4.1 to the extent that in such Transfer Certificate the Bank which
               is a party thereto seeks to transfer its Commitment in whole, the
               Borrower and such Bank shall be released from further obligations
               towards each other under this Agreement and their respective
               rights against each other shall be cancelled other than existing
               claims against such Bank for breach of this Agreement (such
               rights, benefits and obligations being referred to in this Clause
               14.4 as "DISCHARGED RIGHTS AND OBLIGATIONS");

          14.4.2 the Borrower and the Transferee which is a party thereto shall
               assume obligations towards one another and/or acquire rights
               against one another which differ from such discharged rights and
               obligations only insofar as the Borrower and such Transferee have
               assumed and/or acquired the same in place of the Borrower and
               such Bank; and

          14.4.3 the Agent, the Arrangers, the Transferee and the other Banks
               shall acquire the same rights and benefits and assume the same
               obligations between themselves as they would have acquired and
               assumed had such Transferee been an original party to this
               Agreement as a Bank with the rights, benefits and/or obligations
               acquired or assumed by it as a result of such transfer.

     14.5 POWER OF ATTORNEY In order to give effect to each Transfer Certificate
          the Finance Parties and the Borrower each hereby irrevocably and
          unconditionally appoint the Agent as its true and lawful attorney with
          full power to execute on their respective behalves each Transfer
          Certificate delivered to the Agent pursuant to Clause 14.4 without the
          Agent being under any obligation to take any further instructions from
          or give any prior notice to, any of the Finance Parties or, subject to
          the Borrower's rights under Clause 14.1, the Borrower before doing so
          and the Agent shall so execute each such Transfer Certificate on
          behalf of the other Finance Parties and the Borrower immediately on
          its receipt of the same pursuant to Clause 14.4.

     14.6 NOTIFICATION The Agent shall promptly notify the other Finance
          Parties, the Transferee and the Borrower on the execution by it of any
          Transfer Certificate together with details of the amount transferred,
          the Transfer Date and the parties to such transfer.

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15   PAYMENTS, MANDATORY PREPAYMENT, RESERVE REQUIREMENTS AND ILLEGALITY

     15.1 PAYMENTS All amounts payable by the Borrower under or pursuant to any
          of the Security Documents shall be paid to such accounts at such banks
          as the Agent may from time to time direct to the Borrower and shall be
          paid in Dollars in same day funds (or such funds as are required by
          the authorities in the United States of America for settlement of
          international payments for immediate value). Payments shall be deemed
          to have been received by the Agent on the date on which the Agent
          receives authenticated advice of receipt, unless that advice is
          received by the Agent on a day other than a Business Day or at a time
          of day (whether on a Business Day or not) when the Agent in its
          reasonable discretion considers that it is impossible or impracticable
          for the Agent to utilise the amount received for value that same day,
          in which event the payment in question shall be deemed to have been
          received by the Agent on the Business Day next following the date of
          receipt of advice by the Agent.

     15.2 NO DEDUCTIONS OR WITHHOLDINGS All payments (whether of principal or
          interest or otherwise) to be made by the Borrower pursuant to the
          Security Documents shall, subject only to Clause 15.3, be made free
          and clear of and without deduction for or on account of any Taxes or
          other deductions, withholdings, restrictions, conditions or
          counterclaims of any nature, and the Borrower will not claim any
          equity in respect of any payment due from it to the Banks or to the
          Agent under or in relation to any of the Security Documents.

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

     15.4 EVIDENCE OF DEDUCTIONS If at any time the Borrower is required by law
          to make any deduction or withholding from any payment to be made by it
          pursuant to any

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<PAGE>

          of the Security Documents, the Borrower will pay the amount required
          to be deducted or withheld to the relevant authority within the time
          allowed under the applicable law and will, no later than thirty days
          after making that payment, deliver to the Agent an original receipt
          issued by the relevant authority, or other evidence reasonably
          acceptable to the Agent, evidencing the payment to that authority of
          all amounts required to be deducted or withheld. If the Borrower makes
          any deduction or withholding from any payment under or pursuant to any
          of the Security Documents, and a Bank subsequently receives a refund
          or allowance from any tax authority which that Bank at its sole
          discretion identifies as being referable to that deduction or
          withholding, that Bank shall, as soon as reasonably practicable, pay
          to the Borrower an amount equal to the amount of the refund or
          allowance received, if and to the extent that it may do so without
          prejudicing its right to retain that refund or allowance and without
          putting itself in any worse financial position than that in which it
          would have been had the deduction or withholding not been required to
          have been made. Nothing in this Clause shall be interpreted as
          imposing any obligation on any Bank unless requested by the Borrower
          to apply for any refund or allowance nor as restricting in any way the
          manner in which any Bank organises its tax affairs, nor as imposing on
          any Bank any obligation to disclose to the Borrower any information
          regarding its tax affairs or tax computations. All costs and expenses
          incurred by any Bank in obtaining or seeking to obtain a refund or
          allowance from any tax authority pursuant to this Clause shall be for
          the Borrower's account.

     15.5 ADJUSTMENT OF DUE DATES If any payment to be made under any of the
          Security Documents, other than a payment of interest on the Facility,
          shall be due on a day which is not a Business Day, that payment shall
          be made on the next succeeding Business Day (unless the next
          succeeding Business Day falls in the next calendar month in which
          event the payment shall be made on the next preceding Business Day).
          Any such variation of time shall be taken into account in computing
          any interest in respect of that payment.

     15.6 CHANGE IN LAW If, by reason of the introduction of any law, or any
          change in any law, or the interpretation or administration of any law,
          or in compliance with any request or requirement from any central bank
          or any fiscal, monetary or other authority:-

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<PAGE>

          15.6.1 any Finance Party (or the holding company of any Finance Party)
               shall be subject to any Tax with respect to payments of all or
               any part of the Indebtedness; or

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

          15.6.3 any reserve requirements shall be imposed, modified or deemed
               applicable against assets held by or deposits in or for the
               account of or loans by any branch of any Finance Party or its
               direct or indirect holding company; or

          15.6.4 any ratio (whether cash, capital adequacy, liquidity or
               otherwise) which any Finance Party or its direct or indirect
               holding company is required or requested to maintain shall be
               affected; or

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

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

     15.7 ILLEGALITY AND IMPRACTICALITY Notwithstanding anything contained in
          the Security Documents, the obligations of a Bank to advance or
          maintain its

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<PAGE>

          Commitment shall terminate in the event that a change in any law or in
          the interpretation of any law by any authority charged with its
          administration shall make it unlawful for that Bank to advance or
          maintain its Commitment. In such event the Bank affected shall notify
          the Agent and the Agent shall, by written notice to the Borrower,
          declare that Bank's obligations to be immediately terminated. If all
          or any part of the Facility shall have been advanced by the Banks to
          the Borrower, the portion of the Indebtedness (including all accrued
          interest) advanced by the Bank so affected shall be prepaid within
          thirty days from the date of such notice. Clause 5.3 shall apply to
          that prepayment if it is made on a day other than the last day of an
          Interest Period. During that period, the affected Bank shall negotiate
          in good faith with the Borrower to find an alternative method or
          lending base in order to maintain the Facility.

     15.8 CHANGES IN MARKET CIRCUMSTANCES If at any time a Bank determines
          (which determination shall be final and conclusive and binding on the
          Borrower) that, by reason of changes affecting the London Interbank
          market, adequate and fair means do not exist for ascertaining the rate
          of interest on the Facility or any part thereof pursuant to this
          Agreement:-

          15.8.1 that Bank shall give notice to the Agent and the Agent shall
               give notice to the Borrower of the occurrence of such event; and

          15.8.2 the Agent shall as soon as reasonably practicable certify to
               the Borrower in writing the effective cost to that Bank of
               maintaining its Commitment for such further period as shall be
               selected by that Bank and the rate of interest payable by the
               Borrower for that period; or, if that is not acceptable to the
               Borrower,

          15.8.3 the Agent in accordance with instructions from that Bank and
               subject to that Bank's approval of any agreement between the
               Agent and the Borrower, will negotiate with the Borrower in good
               faith with a view to modifying this Agreement to provide a
               substitute basis for that Bank's Commitment which is financially
               a substantial equivalent to the basis provided for in this
               Agreement.

          If, within thirty days of the giving of the notice referred to in
          Clause 15.8.1, the Borrower and the Agent fail to agree in writing on
          a substitute basis for such Bank's Commitment the Borrower will
          immediately prepay the amount of such

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<PAGE>

          Bank's Commitment and the Maximum Facility Amount will automatically
          decrease by the amount of such Commitment and such decrease shall not
          be reversed. Clause 5.3 shall apply to that prepayment if it is made
          on a day other than the last day of an Interest Period.

     15.9 NON-AVAILABILITY OF CURRENCY If a Bank is for any reason unable to
          obtain Dollars in the London Interbank market and is, as a result, or
          as a result of any other contingency affecting the London Interbank
          market, unable to advance or maintain its Commitment in Dollars, that
          Bank shall give notice to the Agent and the Agent shall give notice to
          the Borrower and that Bank's obligations to make the Facility
          available shall immediately cease. In that event, if all or any part
          of the Facility shall have been advanced by that Bank to the Borrower,
          the Agent in accordance with instructions from that Bank and subject
          to that Bank's approval of any agreement between the Agent and the
          Borrower, will negotiate with the Borrower in good faith with a view
          to establishing a mutually acceptable basis for funding the Facility
          or relevant part thereof from an alternative source. If the Agent and
          the Borrower have failed to agree in writing on a basis for funding
          the Facility or relevant part thereof from an alternative source by
          11.00 a.m. on the second Business Day prior to the end of the then
          current relevant Interest Period, the Borrower will (without prejudice
          to its other obligations under or pursuant to this Agreement,
          including, without limitation, its obligation to pay interest on the
          Facility, arising on the expiry of the then relevant Interest Period)
          prepay the Indebtedness (or relevant part thereof) to the Agent on
          behalf of that Bank on the expiry of the then current relevant
          Interest Period.

16   COMMUNICATIONS

     16.1 METHOD Except for Communications pursuant to Clause 9, which shall be
          made or given in accordance with Clause 9.20, any Communication may be
          given, delivered, made or served (as the case may be) under or in
          relation to this Agreement by letter or fax and shall be in the
          English language and sent addressed:-

          16.1.1 in the case of any of the Finance Parties to the Agent at its
               address at the head of this Agreement (fax no: + 47 22 482 894)
               marked for the attention of: Credit Administration Shipping; and

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          16.1.2 in the case of the Borrower and/or the Guarantor to the
               Communications Address;

          or to such other address or fax number as the Agent or the Borrower
          may designate for themselves by written notice to the others.

     16.2 TIMING A Communication shall be deemed to have been duly given,
          delivered, made or served to or on, and received by a party to this
          Agreement:-

          16.2.1 in the case of a fax when the sender receives one or more
               transmission reports showing the whole of the Communication to
               have been transmitted to the correct fax number;

          16.2.2 if delivered to an officer of the relevant party or (in the
               case of the Borrower) left at the Communications Address at the
               time of delivery or leaving; or

          16.2.3 if posted, at 9.00 a.m. on the third Business Day after posting
               by prepaid first class post.

          Any Communication by fax shall be promptly confirmed in writing by
          post or hand delivery.

17   GENERAL INDEMNITIES

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

     17.2 COSTS AND EXPENSES The Borrower will, within fourteen days of the
          Agent's written demand, reimburse the Agent (on behalf of each of the
          Finance Parties) for all reasonable out of pocket expenses including
          internal and external legal costs (including stamp duty, Value Added
          Tax or any similar or replacement tax if applicable) of and incidental
          to:-

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          17.2.1 the negotiation, syndication, preparation, execution and
               registration of the Security Documents (whether or not any of the
               Security Documents are actually executed or registered and
               whether or not all or any part of the Facility is advanced);

          17.2.2 any amendments, addenda or supplements to any of the Security
               Documents (whether or not completed);

          17.2.3 any other documents which may at any time be required by any
               Finance Party to give effect to any of the Security Documents or
               which any Finance Party is entitled to call for or obtain
               pursuant to any of the Security Documents; and

          17.2.4 the exercise of the rights, powers, discretions and remedies of
               the Finance Parties under or pursuant to the Security Documents.

     17.3 EVENTS OF DEFAULT The Borrower shall indemnify the Finance Parties
          from time to time on demand against all losses and costs incurred or
          sustained by any Finance Party as a consequence of any Event of
          Default, including (without limitation) any Break Costs.

     17.4 FUNDING COSTS The Borrower shall indemnify the Finance Parties from
          time to time on demand against all losses and costs incurred or
          sustained by any Finance Party if, for any reason due to a default or
          other action by the Borrower, any Drawing is not advanced to the
          Borrower after the relevant Drawdown Notice has been given to the
          Agent, or is advanced on a date other than that requested in the
          Drawdown Notice, including (without limitation) any Break Costs.

     17.5 PROTECTION AND ENFORCEMENT The Borrower shall indemnify the Finance
          Parties from time to time on demand against all losses, costs and
          liabilities which any Finance Party may from time to time sustain,
          incur or become liable for in or about the protection, maintenance or
          enforcement of the rights conferred on the Finance Parties by the
          Security Documents or in or about the exercise or purported exercise
          by the Finance Parties of any of the rights, powers, discretions or
          remedies vested in them under or arising out of the Security
          Documents, including (without limitation) any losses, costs and
          liabilities which any Finance Party may from time to time sustain,
          incur or become liable for by reason of any Finance Party being
          mortgagees of any Vessel, assignees of any Mortgage and/or

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<PAGE>

          a lender to the Borrower, or by reason of any Finance Party being
          deemed by any court or authority to be an operator or controller, or
          in any way concerned in the operation or control, of any Vessel. No
          such indemnity will be given to a Finance Party where any such loss,
          cost or liability has occurred due to gross negligence or wilful
          misconduct on the part of that Finance Party; however this shall not
          affect the right of any other Finance Party to receive any such
          indemnity.

     17.6 LIABILITIES OF FINANCE PARTIES The Borrower will from time to time
          reimburse the Finance Parties on demand for all sums which any Finance
          Party may pay on account of any of the Security Parties or in
          connection with any Vessel (whether alone or jointly or jointly and
          severally with any other person) including (without limitation) all
          sums which any Finance Party may pay or guarantees which any Finance
          Party may give in respect of the Insurances, any expenses incurred by
          any Finance Party in connection with the maintenance or repair of any
          Vessel or in discharging any lien, bond or other claim relating in any
          way to any Vessel, and any sums which any Finance Party may pay or
          guarantees which they may give to procure the release of any Vessel
          from arrest or detention.

     17.7 TAXES The Borrower shall pay all Taxes to which all or any part of the
          Indebtedness or any of the Security Documents may be at any time
          subject and shall indemnify the Finance Parties on demand against all
          liabilities, costs, claims and expenses incurred in connection
          therewith, including but not limited to any such liabilities, costs,
          claims and expenses resulting from any omission to pay or delay in
          paying any such Taxes. The indemnity contained in this Clause shall
          survive the repayment of the Indebtedness.

18   MISCELLANEOUS

     18.1 WAIVERS No failure or delay on the part of any Finance Party in
          exercising any right, power, discretion or remedy under or pursuant to
          any of the Security Documents, nor any actual or alleged course of
          dealing between any Finance Party and any of the Security Parties,
          shall operate as a waiver of, or acquiescence in, any default on the
          part of any Security Party, unless expressly agreed to do so in
          writing by the Agent, nor shall any single or partial exercise by any
          Finance Party of any right, power, discretion or remedy preclude any
          other or further exercise of that right, power, discretion or remedy,
          or the exercise by a Finance Party of any other right, power,
          discretion or remedy.

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     18.2 NO ORAL VARIATIONS No variation or amendment of any of the Security
          Documents shall be valid unless in writing and signed on behalf of the
          Agent and the relevant Security Party.

     18.3 SEVERABILITY If at any time any provision of any of the Security
          Documents is invalid, illegal or unenforceable in any respect that
          provision shall be severed from the remainder and the validity,
          legality and enforceability of the remaining provisions shall not be
          affected or impaired in any way.

     18.4 SUCCESSORS ETC. The Security Documents shall be binding on the
          Security Parties and on their successors and permitted transferees and
          assignees, and shall inure to the benefit of the Finance Parties and
          their respective successors, transferees and assignees. The Borrower
          may not assign or transfer any of its rights or duties under or
          pursuant to any of the Security Documents without the prior written
          consent of the Banks.

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

     18.6 OTHER ARRANGEMENTS The Finance Parties may, without prejudice to their
          rights under or pursuant to the Security Documents, at any time and
          from time to time, on such terms and conditions as they may in their
          discretion determine, and without notice to the Borrower, grant time
          or other indulgence to, or compound with, any other person liable
          (actually or contingently) to the Finance Parties or any of them in
          respect of all or any part of the Indebtedness, and may release or
          renew negotiable instruments and take and release securities and hold
          funds on realisation or suspense account without affecting the
          liabilities of the Borrower or the rights of the Finance Parties under
          or pursuant to the Security Documents.

     18.7 ADVISERS The Borrower irrevocably authorises the Agent, at any time
          and from time to time during the Facility Period, to consult insurance
          advisers on any matters relating to the Insurances, including, without
          limitation, the collection of

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<PAGE>

          insurance claims, and from time to time to consult or retain advisers
          or consultants to monitor or advise on any other claims relating to
          the Vessels. The Borrower will provide such advisers and consultants
          with all information and documents which they may from time to time
          reasonably require and will reimburse the Agent on demand for all
          reasonable costs and expenses incurred by the Agent in connection with
          the consultation or retention of such advisers or consultants.

     18.8 DELEGATION The Finance Parties may at any time and from time to time
          delegate to any person any of their rights, powers, discretions and
          remedies pursuant to the Security Documents, other than rights
          relating to actions to be taken by the Majority Banks or the Banks as
          a group on such terms as they may consider appropriate (including the
          power to sub-delegate).

     18.9 RIGHTS ETC. CUMULATIVE Every right, power, discretion and remedy
          conferred on the Finance Parties under or pursuant to the Security
          Documents shall be cumulative and in addition to every other right,
          power, discretion or remedy to which they may at any time be entitled
          by law or in equity. The Finance Parties may exercise each of their
          rights, powers, discretions and remedies as often and in such order as
          they deem appropriate subject to obtaining the prior written consent
          of the Majority Banks. The exercise or the beginning of the exercise
          of any right, power, discretion or remedy shall not be interpreted as
          a waiver of the right to exercise any other right, power, discretion
          or remedy either simultaneously or subsequently.

     18.10 NO ENQUIRY The Finance Parties shall not be concerned to enquire into
          the powers of the Security Parties or of any person purporting to act
          on behalf of any of the Security Parties, even if any of the Security
          Parties or any such person shall have acted in excess of their powers
          or if their actions shall have been irregular, defective or informal,
          whether or not any Finance Parties had notice thereof.

     18.11 CONTINUING SECURITY The security constituted by the Security
          Documents shall be continuing and shall not be satisfied by any
          intermediate payment or satisfaction until the Indebtedness shall have
          been repaid in full and none of the Finance Parties shall be under any
          further actual or contingent liability to any third party in relation
          to the Vessels, the Insurances, Earnings or Requisition Compensation
          or any other matter referred to in the Security Documents.

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     18.12 SECURITY CUMULATIVE The security constituted by the Security
          Documents shall be in addition to any other security now or in the
          future held by the Finance Parties or any of them for or in respect of
          all or any part of the Indebtedness, and shall not merge with or
          prejudice or be prejudiced by any such security or any other
          contractual or legal rights of any of the Finance Parties, nor
          affected by any irregularity, defect or informality, or by any
          release, exchange or variation of any such security. Section 93 of the
          Law of Property Act 1925 and all provisions which the Agent considers
          analogous thereto under the law of any other relevant jurisdiction
          shall not apply to the security constituted by the Security Documents.

     18.13 RE-INSTATEMENT If any Finance Party takes any steps to exercise any
          of its rights, powers, remedies or discretions pursuant to the
          Security Documents and the result shall be adverse to the Finance
          Parties, the Borrower and the Finance Parties shall be restored to
          their former positions as if no such steps had been taken.

     18.14 NO LIABILITY None of the Finance Parties, nor any agent or employee
          of any Finance Party, nor any receiver and/or manager appointed by the
          Agent, shall be liable for any losses which may be incurred in or
          about the exercise of any of the rights, powers, discretions or
          remedies of the Finance Parties under or pursuant to the Security
          Documents nor liable as mortgagee in possession for any loss on
          realisation or for any neglect or default of any nature for which a
          mortgagee in possession might otherwise be liable unless such Finance
          Party's action constitutes gross negligence or wilful misconduct.

     18.15 RESCISSION OF PAYMENTS ETC. Any discharge, release or reassignment by
          any of the Finance Parties of any of the security constituted by, or
          any of the obligations of any Security Party contained in, any of the
          Security Documents shall be (and be deemed always to have been) void
          if any act (including, without limitation, any payment) as a result of
          which such discharge, release or reassignment was given or made is
          subsequently wholly or partially rescinded or avoided by operation of
          any law, unless such Finance Party's action constitutes gross
          negligence or wilful misconduct.

     18.16 SUBSEQUENT ENCUMBRANCES If the Agent receives notice of any
          subsequent Encumbrance (other than any Encumbrance permitted by the
          terms of this Agreement) affecting any Vessel or all or any part of
          the Insurances, Earnings or Requisition Compensation, the Agent may
          open a new account in its books for the

                                       62

<PAGE>

          Borrower. If the Agent does not open a new account, then (unless the
          Encumbrance is permitted by the terms of this Agreement or the Agent
          gives written notice to the contrary to the Borrower) as from the time
          of receipt by the Agent of notice of such subsequent Encumbrance, all
          payments made to the Agent shall be treated as having been credited to
          a new account of the Borrower and not as having been applied in
          reduction of the Indebtedness.

     18.17 RELEASES If any Finance Party shall at any time in its discretion
          release any party from all or any part of any of the Security
          Documents or from any term, covenant, clause, condition or obligation
          contained in any of the Security Documents, the liability of any other
          party to the Security Documents shall not be varied or diminished.

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

     18.19 SURVIVAL OF REPRESENTATIONS AND WARRANTIES The representations and
          warranties on the part of the Borrower contained in this Agreement
          shall survive the execution of this Agreement and the advance of the
          Facility or any part thereof.

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

     18.21 THIRD PARTY RIGHTS Notwithstanding the provisions of the Contracts
          (Rights of Third Parties) Act 1999, no term of this Agreement is
          enforceable by a person who is not a party to it.

19   LAW AND JURISDICTION

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

     19.2 JURISDICTION For the exclusive benefit of the Finance Parties, the
          parties to this Agreement irrevocably agree that the courts of England
          are to have jurisdiction to settle any disputes which may arise out of
          or in connection with this Agreement

                                       63

<PAGE>

          and that any Proceedings may be brought in those courts. The Borrower
          irrevocably waives any objection which it may now or in the future
          have to the laying of the venue of any Proceedings in any court
          referred to in this Clause, and any claim that those Proceedings have
          been brought in an inconvenient or inappropriate forum.

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

     19.4 SERVICE OF PROCESS Without prejudice to the right of the Finance
          Parties to use any other method of service permitted by law, the
          Borrower irrevocably agrees that any writ, notice, judgment or other
          legal process shall be sufficiently served on it if addressed to it
          and left at or sent by post to the Address for Service, and in that
          event shall be conclusively deemed to have been served at the time of
          leaving or, if posted, at 9.00 a.m. on the third Business Day after
          posting by prepaid first class registered post.

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

                                       64

<PAGE>

SIGNED by                         )
duly authorised for and on behalf )
of DNB NOR BANK ASA               )
(as the Agent)                    )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of CITIBANK N.A.                  )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of DNB NOR BANK ASA               )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of FORTIS CAPITAL CORP            )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of THE GOVERNOR AND COMPANY       )
OF THE BANK OF SCOTLAND           )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of HSBC BANK PLC                  )
(as a Bank)                       )
in the presence of:-              )

                                       65

<PAGE>

SIGNED by                         )
duly authorised for and on behalf )
of HSH NORDBANK AG                )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of ING BANK N.V.                  )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of LLOYDS TSB BANK PLC            )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of NIBC BANK N.V.                 )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of NORDEA BANK NORGE ASA          )
GRAND CAYMAN BRANCH               )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of SCOTIABANK EUROPE PLC          )
(as a Bank)                       )
in the presence of:-              )

                                       66

<PAGE>

SIGNED by                         )
duly authorised for and on behalf )
of CALYON CORPORATE AND           )
INVESTMENT BANK                   )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of DANISH SHIP FINANCE A/S        )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of BAYERISCHE HYPO-UND            )
VEREINSBANK AG                    )
(as a Bank)                       )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of DNB NOR BANK ASA               )
(as an Arranger)                  )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of CITIGROUP GLOBAL               )
MARKETS LIMITED                   )
(as an Arranger)                  )
in the presence of:-              )

                                       67

<PAGE>

SIGNED by                         )
duly authorised for and on behalf )
of NORDEA BANK FINLAND PLC,       )
NEW YORK BRANCH                   )
(as an Arranger)                  )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of DNB NOR BANK ASA               )
(as a Book Runner)                )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of CITIGROUP GLOBAL               )
MARKETS LIMITED                   )
(as a Book Runner)                )
in the presence of:-              )

SIGNED by                         )
duly authorised for and on behalf )
of NORSK TEEKAY HOLDINGS LTD      )
in the presence of:-              )

                                       68

<PAGE>

(This is the form of the amended and restated facility agreement dated 26 June
2003 as further amended and restated on the Effective Date (as defined in the
deed of consent and amendment and restatement dated 5 October 2006 to which this
is an appendix)

                               DATED 26 JUNE 2003

                            NORSK TEEKAY HOLDINGS LTD
                                  (AS BORROWER)

                                     - AND -

                        CITIGROUP GLOBAL MARKETS LIMITED
                                DNB NOR BANK ASA
                                       AND
                    NORDEA BANK FINLAND PLC, NEW YORK BRANCH
                          (AS MANDATED LEAD ARRANGERS)

                                     - AND -

                                DNB NOR BANK ASA
                                   AND OTHERS
                                   (AS BANKS)

                                     - AND -

                        CITIGROUP GLOBAL MARKETS LIMITED
                                       AND
                                DNB NOR BANK ASA
                                (AS BOOK RUNNERS)

                                     - AND -

                                DNB NOR BANK ASA
                    (AS FACILITY AGENT AND SECURITY TRUSTEE)

                                   ----------

                          FURTHER AMENDED AND RESTATED
                             US$550,000,000 SECURED
                             REDUCING REVOLVING LOAN
                               FACILITY AGREEMENT

                                   ----------

                               STEPHENSON HARWOOD
                           ONE, ST. PAUL'S CHURCHYARD
                                 LONDON EC4M 8SH
                               TEL: 020 7329 4422
                               FAX: 020 7329 7100
                                  REF: 819/822

<PAGE>

                                    CONTENTS

<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            ----
<S>                                                                         <C>
1  Definitions and Interpretation........................................     2
2  The Facility and its Purpose..........................................    16
3  Conditions Precedent and Subsequent...................................    22
4  Representations and Warranties........................................    25
5  Repayment and Prepayment..............................................    28
6  Interest..............................................................    29
7  Fees..................................................................    30
8  Security Documents....................................................    31
9  Agency and Trust......................................................    31
10 Covenants.............................................................    40
11 Earnings..............................................................    44
12 Events Of Default.....................................................    44
13 Set-Off and Lien......................................................    48
14 Assignment and Sub-Participation......................................    50
15 Payments, Mandatory Prepayment, Reserve Requirements and Illegality...    52
16 Communications........................................................    56
17 General Indemnities...................................................    57
18 Miscellaneous.........................................................    59
19 Law and Jurisdiction..................................................    63

SCHEDULE 1...............................................................    65
   The Banks, the Commitments and the Proportionate Shares...............    65

SCHEDULE 2...............................................................    68
   The Vessels...........................................................    68
</TABLE>

<PAGE>

<TABLE>
<S>                                                                         <C>
SCHEDULE 3...............................................................    69
   TNOL Vessels..........................................................    69

SCHEDULE 4...............................................................    70
   Form of Transfer Certificate..........................................    70

SCHEDULE 5...............................................................    72
   Form of Drawdown Notice...............................................    72

SCHEDULE 6...............................................................    73
   Calculation of the Mandatory Cost.....................................    73

SCHEDULE 7...............................................................    76
   The Arrangers.........................................................    76

SCHEDULE 8...............................................................    77
   Schedule of Reductions................................................    77
</TABLE>

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