Document:

exhibit10-4.htm

    ASSET
      PURCHASE, SETTLEMENT AND MUTUAL RELEASE AGREEMENT

    

    BETWEEN

    

    BETTER
      BIODIESEL, INC.

    A
      Colorado Corporation

    (BBI)

    

    and

    

    RON
      CRAFTS, MARY CRAFTS, JAMES CRAWFORD, JOHN CRAWFORD LYNN DEAN CRAWFORD and
      CULINARY CRAFTS, LLC, a Utah Liability Company

     (Shareholders)

    

    

    December
      __, 2007

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     ASSET
      PURCHASE, SETTLEMENT AND MUTUAL RELEASE AGREEMENT

    

    

    This
      Asset Purchase, Settlement and
      Mutual Release Agreement (this “Agreement”) is made this ____ day of
      December, 2007 (the “Effective Date”), by and between Better Biodiesel,
      Inc., a Colorado corporation (“BBI”), Domestic Energy Partners, LLC, a
      Utah limited liability company, and wholly owned subsidiary of Better Biodiesel
      (“DEP”), and Ron Crafts, Mary Crafts (collectively with Ron Crafts, the
“Crafts”), James Crawford, John Crawford, Lynn Dean Crawford
      (collectively with James Crawford and John Crawford, the “Crawfords”),
      and Cullinary Crafts, LLC, a Utah limited liability company (collectively with
      the Crafts and the Crawfords, the “Shareholders”).  The parties
      hereto are referred to herein each as a “Party” and collectively as the
“Parties.”

    

    WHEREAS,
      BBI is engaged in the business
      of biodiesel technology development and biodiesel fuel production and
      distribution (the “Business”);

    

    WHEREAS,
      BBI owns 100% of the
      membership interests in DEP (the “DEP Membership
      Interests”);

    

    WHEREAS,
      for various business reasons, it is the desire of BBI to separate a portion
      of
      the Business (the “Separated Business”) from BBI, and to enable the
      Shareholders to concentrate their efforts to operate the Separated Business
      through DEP while BBI thereafter continues to develop, diversify, and operate
      the remaining portion of the Business;

    

    WHEREAS,
      excepting the Separated Business, BBI and its management do not intend to sell
      Business;

    

    WHEREAS,
      neither DEP nor the Shareholders have any plan or intention to sell DEP or
      the
      assets or operations of DEP;

    

    NOW
      THEREFORE, in consideration of the foregoing, the mutual covenants of the
      Parties set forth in this Agreement, and other good and valuable consideration,
      the receipt and sufficiency of which are hereby acknowledged, the Parties,
      intending to be legally bound, agree as follows:

    

    Recitals.

    

    The
      foregoing recitals are hereby
      acknowledged to be true and are hereby incorporated into the Agreement as if
      set
      forth herein in full.

    

    

    

    Definitions.

    

    “Affiliate”
has
      the meaning set
      forth in Rule 12b-2 of the regulations promulgated under the Securities Exchange
      Act.

    

    “Assigned
      Assets” has the
      meaning set forth in Section 3(a) below.

    

    “Assigned
      Contracts” has the
      meaning set forth in Section 3(c) below.

    

    “Assumed
      Liabilities” has the
      meaning set forth in Section 3(b) below.

    

    “BBI”
has
      the meaning set forth
      in the preface above.

    

    “Business”
has
      the meaning set
      forth in the preface above.

    

    “Claims”
has
      the meaning set
      forth in Section 8 below.

    

    “Closing”
has
      the meaning set
      forth in Section 4 below.

    

    “Crafts”
has
      the meaning set
      forth in the preface above.

    

    “Crawfords”
has
      the meaning set
      forth in the preface above.

    

    “Damages”
shall
      mean any and all
      costs, losses, damages, liabilities, demands, claims, suits, actions, judgments,
      causes of action, assessments or expenses, including interest, penalties, fines
      and attorneys' fees and expenses incident thereto, incurred in connection with
      any claim for indemnification arising out of this Agreement, and any and all
      amounts paid in settlement of any such claim.

    

    “DEP”
shall
      mean Domestic Energy
      Partners, LLC, a Utah limited liability company, and its wholly owned
      subsidiaries, Domestic Energy Leasing, LLC, a Utah limited liability company,
      and Domestic Energy Licensing, LLC, a Utah limited liability
      company.

    

    “DEP
      Membership Interest” has
      the meaning set forth in the preface above.

    

    “Effective
      Date” the meaning set
      forth in the preface above.

    

    “Liability”
means
      any liability
      (whether known or unknown, whether asserted or unasserted, whether absolute
      or
      contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
      and whether due or to become due), including any liability for
      Taxes.

    

    “Party”
and
“Parties”
      have the meanings set forth in the preface above.

    

    “Person”
means
      an individual, a
      partnership, a corporation, an association, a joint stock company, a trust,
      a
      joint venture, an unincorporated organization or a governmental entity (or
      any
      agency or political subdivision thereof).

    

    “Separated
      Business” has the
      meaning set forth in the preface above.

    

    “Shareholders”
has
      the meaning
      set forth in the preface above.

    

    “Tax”
means
      any federal, state,
      local or foreign income, gross receipts, license, payroll, employment, excise,
      severance, stamp, occupation, premium, windfall profits, environmental
      assessments, customs duties, capital stock, franchise, profits, withholding,
      social security (or similar), unemployment, disability, real property, personal
      property, sales, use, transfer, registration, value added, alternative, minimum,
      estimated, or other tax of any kind whatsoever, including any interest, penalty
      or addition thereto, whether disputed or not.

    

    Basic
      Transaction.

    

    (a)           Transfer
      of Assets to DEP.  BBI has assigned, transferred, and delivered to
      DEP all of the personal property, assets, tangible and intangible, including
      the
      goodwill associated therewith, in connection with, and that are necessary and
      desirable in, the operation of the Separated Business, including but not limited
      to the assets described in Exhibit C (the “Assigned Assets”) of each of
      the consent resolutions of BBI and DEP (including its subsidiaries), dated
      as of
      the date hereof, approving the transactions contemplated by this Agreement
      (collectively, the “Consent Resolutions”), free and clear of any and all
      current and existing debts, obligations, claims, limitations, liens and/or
      any
      other encumbrances whatsoever, excepting any professional liens that may exist
      in favor of the law firm of Workman Nydeggar on the intellectual property
      included in the Assigned Assets.

    

    (b)           Assumption
      of Liabilities by DEP. On and subject to the terms and conditions of this
      Agreement, the Shareholders agree and acknowledge that DEP has assumed all
      of
      BBI’s liabilities, and have retained DEP’s liabilities, if any, in connection
      with, or obligations owed to, any of Ron Crafts, Culinary Crafts, LLC, or the
      Crawfords, as listed on Exhibit D of the Consent Resolutions (the “Assumed
      Liabilities”).  Except for the Assumed Liabilities, the Parties
      agree and acknowledge that DEP has no liabilities other than the Assumed
      Liabilities.  The Parties acknowledge the potential existence of
      professional liens in favor Workman Nydegger that may exist on the intellectual
      property included in the Assigned Assets and that DEP is not assuming any
      payment obligation to Workman Nydegger.

    

    (c)           Transfer
      of Contracts to DEP.  BBI has, and has caused its subsidiaries to,
      assign, transfer, and convey to DEP all of the contracts, in connection with,
      and that are necessary and desirable in, the operation of the Separated
      Business, including but not limited to the contracts described in Exhibit E
      of
      the Consent Resolutions (the “Assigned Contracts”), free and clear of any
      and all debts, obligations, claims, limitations, liens and/or any other
      encumbrances whatsoever (excepting those contractual obligations arising
      directly from the Assigned Contracts).

    

    (d)           Distribution
      of DEP Membership Interests. At the Closing (as defined below), BBI
      will distribute 100% of the outstanding membership interests of DEP to the
      Shareholders, in the amounts shown on Schedule 3(c) hereto, in consideration
      of
      and exchange for 15,750,000 shares of common stock in BBI held by the
      Shareholders in the amounts shown in Schedule 3(c) hereto (the “BBI
      Stock”).  At the Closing, the Shareholders shall deliver one or
      more certificates representing such shares in BBI.

    

    Closing.

    

    The
      closing of the transaction
      contemplated by this Agreement (the “Closing”) will take place at the
      offices of BBI, or such other location agreed to by the Parties, and shall
      be
      effective upon the Shareholder’s transfer of the BBI stock to the
      BBI.

    

    Representations
      and Warranties of BBI. BBI represents and warrants to the Shareholders that
      the statements contained in this Section 4 are correct and complete as of the
      Effective Date.

    

    (a)           Organization
      of the BBI.  Better Biodiesel, Inc. is a corporation duly
      organized, validly existing and in good standing under the laws of the state
      of
      Colorado.  Domestic Energy Partners, LLC, is a limited liability
      company and wholly owned subsidiary of Better Biodiesel, Inc., validly existing
      and in good standing under the laws of the state of Utah. Domestic Energy
      Leasing, LLC, is a Utah limited liability company and wholly owned subsidiary
      of
      Domestic Energy Partners, LLC, and Domestic Energy Licensing, LLC, is a Utah
      limited liability company and wholly owned subsidiary of Domestic Energy
      Partners, LLC; both validly existing and in good standing under the laws of
      the
      state of Utah.

    

    (b)           Authorization
      of Transaction.  BBI has full power and authority (including full
      corporate power and authority) to execute and deliver this Agreement and to
      perform its obligations hereunder.  This Agreement constitutes the
      valid and legally binding obligation of BBI, enforceable in accordance with
      its
      terms and conditions.

    

    (c)           Assignment
      of Assets. BBI has assigned, transferred, and delivered to DEP all of the
      Assigned Assets.

    

    (d)           Title
      to Assets.  At the execution of this Agreement by the Parties, DEP
      will have good and marketable title to all of the Assigned Assets, free and
      clear of any Liabilities (other than the Assumed Liabilities), including all
      debts, obligations, claims, limitations, liens, security interests, restrictions
      on transfer and/or any other encumbrances whatsoever on Assigned Assets,
      excepting any professional liens in favor of the law firm of Workman Nydeggar
      that may exist on the intellectual property included in the Assigned
      Assets.

    

    (e)           Assumed
      Liabilities.  At the execution of this Agreement by the Parties,
      DEP will have no Liabilities other than the Assumed Liabilities, and there
      will
      exist no defaults or notices thereof with respect to any of the Assumed
      Liabilities.

    

    (f)           Assignment
      of Contracts. At the execution of this Agreement by the Parties, DEP will
      have no contracts other than the Assigned Contracts.  All of the
      Assigned Contracts are in full force and effect, and there are no breaches,
      defaults, or notices of thereof with respect to any of the Assigned
      Contracts.

    

    (g)           Noncontravention.  Neither
      the execution and the delivery of this Agreement, nor the consummation of the
      transactions contemplated hereby, will (i) violate any constitution, statute,
      regulation, rule, injunction, judgment, order, decree, ruling, charge or other
      restriction of any government, governmental agency, or court to which BBI or
      any
      of its subsidiaries is subject or, as applicable, any provision of its charter
      or bylaws or (ii) conflict with, result in a breach of, constitute a default
      under, result in the acceleration of, create in any party the right to
      accelerate, terminate, modify or cancel, or require any notice under any
      agreement, contract, lease, license, instrument or other arrangement to which
      BBI or any of its subsidiaries is a party or by which any of the Shareholders
      is
      bound or to which BBI’s or any of its subsidiaries’ assets is
      subject.  The Shareholders do not need to give any notice to, make any
      filing with, or obtain any authorization, consent, or approval of any government
      or governmental agency in order for the Parties to consummate the transactions
      contemplated by this Agreement.

    

    (h)           Brokers’
      Fee.  BBI will have no Liability or obligation to pay any fees or
      commissions to any broker, finder or agent with respect to the transactions
      contemplated by this Agreement for which the Shareholders could become liable
      or
      obligated.

    

    (i)           Limitation
      of Representations and Warranties.  Except for the representations
      and warranties of the Shareholders expressly set forth in Section 6 below,
      BBI
      has not relied upon any representations and warranties in making its
      determination to enter into this Agreement and consummate the matters provided
      for herein

    

    (j)           Disclosure.  The
      representations and warranties contained in this Section 5 above do not contain
      any untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements and information contained in this
      Section 5 above not misleading.

    

    (k)           Indemnification.
      In the event BBI (i) breaches or is deemed to have breached any of the
      representations and warranties contained in this Agreement or (ii) fails to
      perform or comply with any of the covenants and agreements set forth in this
      Agreement, BBI shall hold harmless, indemnify and defend Shareholders, and
      each
      of its directors, officers, shareholders, attorneys, representatives and agents,
      from and against any Damages incurred or paid by the acquirer to the extent
      such
      Damages arise or result from a breach by BBI of any such representations or
      warranties or a violation of any covenant in this Agreement.

    

    Representations
      and Warranties of the Shareholders. The Shareholders represent and warrant
      to BBI that the statements contained in this Section 6 are correct and complete
      as of the Effective Date.

    

    (a)           Organization
      of Culinary Crafts.  Culinary Crafts, LLC, is a limited liability
      company duly organized, validly existing, and in good standing under the laws
      of
      the State of Utah.

    

    (b)           Authorization
      of Transaction.  Each of the Shareholders has full power and
      authority (including full corporate power and authority) to execute and deliver
      this Agreement and to perform its obligations hereunder.  This
      Agreement constitutes the valid and legally binding obligation of the
      Shareholders, enforceable in accordance with its terms and
      conditions.

    

    (c)           Noncontravention.  Neither
      the execution and the delivery of this Agreement, nor the consummation of the
      transactions contemplated hereby, will (i) violate any constitution, statute,
      regulation, rule, injunction, judgment, order, decree, ruling, charge or other
      restriction of any government, governmental agency, or court to which any of
      the
      Shareholders is subject or, as applicable, any provision of its charter or
      bylaws or (ii) conflict with, result in a breach of, constitute a default under,
      result in the acceleration of, create in any party the right to accelerate,
      terminate, modify or cancel, or require any notice under any agreement,
      contract, lease, license, instrument or other arrangement to which any of the
      Shareholders is a party or by which any of the Shareholders is bound or to
      which
      any of the Shareholders’ assets is subject.  The Shareholders do not
      need to give any notice to, make any filing with, or obtain any authorization,
      consent, or approval of any government or governmental agency in order for
      the
      Parties to consummate the transactions contemplated by this
      Agreement.

    

    (d)           Brokers’
      Fee.  The Shareholders have no Liability or obligation to pay any
      fees or commissions to any broker, finder or agent with respect to the
      transactions contemplated by this Agreement for which BBI could become liable
      or
      obligated.

    

    (e)           Limitation
      of Representations and Warranties.  Except for the representations
      and warranties of BBI expressly set forth in Section 5 above, the Shareholders
      have not relied upon any representations and warranties in making its
      determination to enter into this Agreement and consummate the matters provided
      for herein

    

    (f)           Disclosure.  The
      representations and warranties contained in this Section 6 above do not contain
      any untrue statement of a material fact or omit to state any material fact
      necessary in order to make the statements and information contained in this
      Section 6 above not misleading.

    

    (g)           Indemnification.
      In the event Shareholders (i) breach or are deemed to have breached any of
      the
      representations and warranties contained in this Agreement or (ii) fail to
      perform or comply with any of the covenants and agreements set forth in this
      Agreement, Shareholders shall hold harmless, indemnify and defend BBI, and
      each
      of its directors, officers, shareholders, attorneys, representatives and agents,
      from and against any Damages incurred or paid by the acquirer to the extent
      such
      Damages arise or result from a breach by Shareholders of any such
      representations or warranties or a violation of any covenant in this
      Agreement.

     

    Covenants
      of the Parties.

    

    (a)           Joint
      Statement.  Promptly following the Closing, if requested by the
      Shareholders, BBI will cooperate in issuing a joint statement to suppliers,
      customers, and such other parties as may be agreed upon by the Shareholders
      and
      the BBI, advising them of the transactions contemplated hereunder.

    

    (b)           Post-Closing
      Access and Cooperation.  For the period following the Closing,
      each Party will provide the other with reasonable access to such documents,
      books, records, agreements, contracts, plans and financial data.

    

    (c)         No
      Disparagement.  Each of the Parties hereby agree that it shall
      not, directly or indirectly, disparage the name or business of any other Party
      hereto or any of its current and former predecessors, successors, assigns,
      parent companies, subsidiaries, affiliates, officers, directors, members,
      shareholders, managers, employees, family members, and agents.

    

    (d)           Saleable
      Fuel.  The Parties agree and acknowledge that the proceeds from
      (a) approximately 9,200 gal. of saleable, not-to-specification fuel that will
      be
      retained by BBI but stored at the facilities located at 355 South 1550 West
      in
      Spanish Fork, Utah, for the purpose of being sold and (b) any receivables
      collected from Cardwell Distributing Inc. in connection with fuel rebates
      (approximately $4,500) will be applied to current accrued payroll (excluding
      any
      of the Assumed Liabilities), any immediate insurance obligations, and critical
      costs for filing year-end statements.

    

    (e)           Further
      Assurances. At any time and from time to time after the Closing, the Parties
      shall cooperate with each other to execute and deliver any other documents,
      instruments of transfer or assignment, files, books and records and do all
      further acts and things as may reasonably be required to carry out the intent
      of
      the Parties under this Agreement.  Without limiting the generality of
      the foregoing, following the Closing, at the request of the Shareholders, BBI
      shall execute and deliver any further documents and instruments and take all
      reasonable action as may be necessary or appropriate (i)to vest in DEP all
      of
      BBI’s title to the Assigned Assets; and (ii) to transfer to DEP all of BBI’s
      rights to permits necessary for the operation of the Assigned
      Assets.

    
 

    Mutual
      and General Releases.

    

    (a)         BBI.  BBI
      and each of its respective predecessors, successors, affiliates, present and
      former subsidiaries, divisions, parents, their respective present and former
      officers, employees, agents and shareholders hereby release and forever
      discharge the Shareholders and each of their respective past, present or future
      subsidiaries, affiliates, shareholders, officers, directors, employees,
      insurers, agents, predecessors, successors and assigns (collectively, the
“Shareholders’ Released Parties”) of and from any and all claims,
      actions, suits, causes of action, debts, fees, costs, expenses (including
      attorneys’ fees), contracts, promises, liens, liabilities, losses, demands,
      controversies, agreements, promises, trespasses, and damages in law or in equity
      of any nature whatsoever (“Claims”), known or unknown, unless concealed
      by acts of fraud, or unforeseen, fixed or contingent, under statute or
      otherwise, and whether existing now or in the future, that BBI now has or may
      have had, or hereafter claims to have, against the Shareholders’ Released
      Parties relating to, resulting from, arising out of (i) Shareholders’
involvement with BBI, or (ii) actions taken by Shareholders on or prior to
      the
      date hereof; provided, however, that this release shall not apply to the
      obligations of Shareholders under this Agreement.

    

    (b)           Shareholders.  Shareholders
      and each of their respective predecessors, successors, affiliates, present
      and
      former subsidiaries, divisions, parents, their respective present and former
      officers, employees, agents and members hereby release and forever discharge
      BBI
      and its past, present or future subsidiaries, affiliates, shareholders,
      officers, directors, employees, insurers, agents, predecessors, successors
      and
      assigns (collectively “BBI Released Parties”) of and from any and all
      Claims, known or unknown, unless concealed by acts of fraud, or unforeseen,
      fixed or contingent, under statute or otherwise, and whether existing now or
      in
      the future, that Shareholders now have or may have had, or hereafter claims
      to
      have, against BBI Released Parties relating to, resulting from, arising out
      of
      monies owed to any of the Shareholders on or prior to the date hereof, including
      but not limited to all claims arising out of or in connection with any of the
      Shareholders’ employment or separation of employment with the BBI, and including
      but not limited to: (i) any and all claims for violation of any federal, state
      or municipal statute, including but not limited to Title VII of the Civil Rights
      Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities
      Act,
      the Fair Labor Standards Act, the Family and Medical Leave Act, the Employee
      Retirement Income Security Act, and applicable state laws relating to
      discrimination and the payment of wages; (ii) any and all claims for wrongful
      discharge of employment; termination in violation of public policy;
      discrimination; breach of contract; breach of a covenant of good faith and
      fair
      dealing; promissory estoppel; negligent or intentional infliction of emotional
      distress; negligent or intentional misrepresentation; negligent or intentional
      interference with contract or prospective economic advantage; unfair business
      practices; defamation; libel; slander; negligence; personal injury; assault;
      battery; invasion of privacy; false imprisonment; and conversion; (iii) any
      and
      all claims arising out of any other laws and regulations relating to employment,
      employment discrimination, wages, commissions and employee benefits; (iv) any
      and all Claims, known, unknown, or unforeseen, fixed or contingent, under
      statute or otherwise, and whether existing now or in the future, that any of
      the
      Shareholders now have or may have had, or hereafter claims to have, against
      BBI
      Released Parties relating to, resulting from, arising out of monies owed to
      any
      of the Shareholders on or prior to the date hereof; or (v) any and all claims
      for attorneys’ fees and costs; provided, however, that this release shall not
      apply to the obligations of the Shareholders under this Agreement.

    

    Waiver
      of Unknown Claims.  Each of the Parties understands that it is
      possible that an unknown injury, damage, diminution or loss, action or suit,
      lien, theory of recovery, lawsuit, claim or cause of action may exist, or may
      arise in the future, which if known by the Parties would have materially
      affected their decision to settle on the terms set forth in this
      Agreement.  Each of the Parties agrees that the exchange set forth
      herein is fair consideration for settling the claims and entering into this
      Agreement, and that this Agreement was entered into in good faith.

    

    No
      Admission of Liability.  This Agreement does not constitute any
      admission by any Party (and shall not be admissible in a proceeding as evidence)
      that any action such Party, its agents or employees took with respect to the
      other was wrongful, unlawful or in violation of any local, state or Federal
      act,
      statute, regulation or constitution, public policy, or contact, or susceptible
      of inflicting any damages or injury whatsoever on the other Party, and each
      Party hereto specifically denies any such wrongdoing or violation.  It
      is further agreed that this Agreement is entered into in part for compromise
      and
      in an effort to resolve fully all matters and issues related to or arising
      out
      of liabilities of the Parties.

    

    Confidentiality.  Whether
      or not the Parties consummate the transactions contemplated in this Agreement,
      neither BBI nor the Shareholders (i) shall not use any of the information
      disclosed to the Shareholders concerning BBI, or BBI concerning the
      Shareholders, as the case may be, or the Acquired Assets for any reason other
      than those reasonably contemplated by this Agreement; (ii) shall destroy or
      return to BBI or the Shareholders, as the case may be, as much of such written
      information as BBI or the Shareholders, as the case may be, may reasonably
      request, and (iii) shall maintain in confidence all such information, whether
      obtained in writing, orally or otherwise, except for information generally
      known
      to the public other than through BBI’s or the Shareholders’ breach of the
      covenants of this Section.

    

    Miscellaneous.

    

    (a)           No
      Third-Party Beneficiaries.  This Agreement shall not confer any
      rights or remedies upon any Person other than the Parties and their respective
      successors and permitted assigns.

    

    (b)           Succession
      and Assignment.  This Agreement shall be binding upon and inure to
      the benefit of the Parties named herein and their respective successors and
      permitted assigns.  No Party may assign either this Agreement or any
      of its rights, interests or obligation hereunder without the prior written
      approval of the other Party.

    

    (c)           Notices.  All
      notices, requests, demands, claims and other communications hereunder will
      be in
      writing.  Any notice, request, demand, claim or other communications
      hereunder shall be deemed duly given if (and then two business day after) it
      is
      sent by registered or certified mail, return receipt requested, postage prepaid
      and addressed to the intended recipient as set forth below:

    
      	
              If
                to Better Biodiesel:

            	
              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

               

            
	
              With
                a copy to:

            	
              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

            
	
              If
                to the Shareholders:

            	
              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

              _______________________

            
	 	 
	 	 
	 	 
	 	 

    

    

    Any
      Party
      may send any notice, request, demand, claim or other communication hereunder
      to
      the intended recipient at the address set forth above using personal delivery,
      expedited courier, messenger service, but no such notice, request, demand,
      claim
      or other communication shall be deemed to have been duly given unless and until
      it actually is received by the intended recipient.  Any Party may
      change the address to which notices, requests, demands, claims and other
      communications hereunder are to be delivered by giving the other Party notice
      in
      the manner herein set forth.

    (d)           Governing
      Law.  This Agreement shall be governed by and construed in
      accordance with the domestic laws of the State of Utah without giving effect
      to
      any choice or conflict of law provision or rule (whether of the State of
      Washington or any other jurisdiction) that would cause the application of the
      laws of any jurisdiction other than the State of Utah.

    

    (e)           Amendments
      and Waivers.  No amendments of any provision of this Agreement
      shall be valid unless the same shall be in writing and signed by the
      Shareholders and BBI.  No waiver by any Party of any default,
      misrepresentation, or breach of warranty or covenant hereunder, whether
      intentional or not, shall be deemed to extend to any prior or subsequent
      default, misrepresentation or breach of warranty or covenant hereunder or affect
      in any way any rights arising by virtue of any prior or subsequent such
      occurrence.

    

    (f)           Severability.  Any
      term or provision of this Agreement that is invalid or unenforceable in any
      situation in any jurisdiction shall not affect the validity or enforceability
      of
      the remaining terms and provisions hereof or the validity or enforceability
      of
      the offending term or provision in any other situation or in any other
      jurisdiction.

    

    (g)           Expenses.  Each
      of the Shareholders and BBI will bear its own costs and expenses (including
      legal fees and expenses) incurred in connection with this Agreement and the
      transactions contemplated hereby.

    (h)           Headings.  The
      section headings contained in this Agreement are inserted for convenience only
      and shall not affect in any way the meaning or interpretation of this
      Agreement.

    

    (i)           Construction.  The
      Parties have participated jointly in the negotiation and drafting of this
      Agreement.  In the event an ambiguity or question of intent or
      interpretation arises, this Agreement shall be construed as if drafted jointly
      by the Parties and no presumption or burden of proof shall arise favoring or
      disfavoring any Party by virtue of the authorship of any of the provisions
      of
      this Agreement.  Any reference to any federal, state, local or foreign
      statute or law shall be deemed also to refer to all rules and regulations
      promulgated thereunder, unless the context requires otherwise.  The
      word “including” shall mean including without limitation.  The Parties
      intend that each representation, warranty and covenant contained herein shall
      have independent significance.  If any Party has breached any
      representation, warranty or covenant contained herein in any respect, the fact
      that there exists another representation, warranty or covenant relating to
      the
      same subject matter (regardless of the relative levels of specificity) which
      the
      Party has not breached shall not detract from or mitigate the fact that the
      Party is in breach of the first representation, warranty or
      covenant.

    

         
      (j)           Incorporation
      of Exhibits.  The Exhibits identified in this Agreement, as well
      as Exhibit F of the Consent Resolutions, setting forth the value of the Assigned
      Assets, Assumed Liabilites, and the BBI Stock, are incorporated herein by
      reference and made a part hereof.

    

    (k)           Counterparts.  This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original but all of which together will constitute one and the same
      instrument.  This Agreement may be executed by facsimile.

    

    (l)           Entire
      Agreement.  This Agreement and the Exhibits hereto (including the
      documents referred to herein) constitutes the entire agreement between the
      Parties and supersedes any prior understandings, agreements, or representations
      by or between the Parties, written or oral, to the extent they related in any
      way to the subject matter hereof.

    

    

    

    IN
      WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
      date
      first above written:

    

    
      	
              BETTER
                BIODIESEL, INC.

               

               

              By:           /s/
                David
                Otto                                           

              Name:  David
                Otto

              Its:         Director

               

               

            	
              DOMESTIC
                ENERGY PARTNERS, LLC

               

               

              By:           /s./
                David
                Otto                                                      

              Name:  David
                Otto, on behalf of Better Biodiesel, as Sole Member and Manager of
                Domestic Energy Partners, LLC

               

            
	
              MARY
                CRAFTS

               

               

              By:           /s/
                Mary
                Crafts                                           

            	
              JAMES
                CRAWFORD

               

               

              By:           /s/
                James
                Crawford                                           

            
	
              JOHN
                CRAWFORD

               

               

              By:           /s/
                John
                Crawford                                           

               

            	
              LYNN
                DEAN CRAWFORD

               

               

              By:           /s/
                Lynn Dean
                Crawford                                           

            
	
              RON
                CRAFTS

               

               

               

              By:__/s/
                Ron Crafts____________

               

               

              CULINARY
                CRAFTS, LLC

               

               

              By:           /s/
                Ron
                Crafts                                           

              Name:  Ron
                Crafts

              Its:        Co-Owner

              By:           /s/
                Mary
                Crafts                                           

              Name:  Mary
                Crafts

              Its:        Co-Owner

            	 

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Schedule
      3(c)

    

    
      	
              Shareholder

            	
              Shares
                of BBI

            	
              Ownership
                Percentage of DEP

            
	
              Ron
                Crafts

            	
              5,250,000

            	
              33.33%

            
	
              Mary
                Crafts

            	
              -0-

            	
              0%

            
	
              James
                Crawford

            	
              1,494,500

            	
              9.50%

            
	
              John
                Crawford

            	
              5,250,000

            	
              33.33%

            
	
              Lynn
                Dean Crawford

            	
              3,755,500

            	
              23.84%

            
	
              Culinary
                Crafts, LLC

            	
              -0-

               

            	
              0%

               

            
	
              Total

            	
              15,750,000

            	
              100%

            

    

    

    

    

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
 

    

    EXHIBIT
      A

    

    Assets
      of
      Separated Business

    

    (1)           One
      hundred percent (100%) of the DEP Membership interest, and, as wholly owned
      subsidiaries of Domestic Energy Partners, LLC, one hundred percent (100%) of
      the
      membership interests in Domestic Energy Leasing, LLC., a Utah limited liability
      company, and wholly owned subsidiary of Domestic Energy, and one hundred percent
      (100%) of the membership interests in Domestic Energy Licensing, LLC., a Utah
      limited liability company and wholly owned subsidiary of Domestic
      Energy.

    

    (2)           The
      raw material inventory of approximately 6,300 gallons of beef
      tallow.

    

    (3)           The
      raw material inventory of approximately 5,300 gallons of methanol.

    

    (4)           The
      biodiesel fuel in process of approximately 1,900 gallons requiring additional
      methanol recovery.

    

    (5)           The
      payroll cash advances of $6,000 representing $2,000 for each of the
      following:  Dean Crawford, John Crawford and James
      Crawford.

    

    (6)           The
      patent application identified in United States Patent Application Serial Numbers
      60/736,674 and 11/559,779.

    

    (7)           All
      of the intellectual property for the production of biodiesel fuel held by the
      Company, including assignments and related agreements from Ron Crafts, John
      Crawford, Dean Crawford, James Crawford, Gary Crook, Jill Hiner and Jason
      Gladden; as well as drawings, renderings and any other images and files, and
      all
      developments and improvements thereon.

    

    (8)           All
      of the production assets located at 355 South 1550 West in Spanish Fork, Utah
      consisting of storage tanks, processing equipment (including the container),
      laboratory equipment and miscellaneous production equipment.

    

    (9)           The
      Cessna twin engine airplane.

    

    (10)           The
      property lease by and between Domestic Energy Partners, LLC and Lew and Evelyn
      Christensen.

    

    (11)           All
      of the furniture, office equipment and leasehold improvements located at 355
      South 1550 West in Spanish Fork, Utah.

    

    (12)           The
      $5,000 deposit associated with lease of property located at 355 South 1550
      West
      in Spanish Fork, Utah and $500 in miscellaneous deposits.

    

    (13)           DEP’s
      checking account held at the Central Bank of Utah with an account balance not
      to
      exceed $50.00.

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    EXHIBIT
      B

    

    Assumed
      Liabilities

    

    

    (1)
      100%
      of accrued salary through October 31, 2007 owed to Ron Crafts, plus interest
      accrued thereon, due and owing to Mr. Crafts for services rendered to the
      Company in the amount of One hundred thousand dollars
      ($100,000.00);

    

    (2)
      That
      promissory note payable to Ron Crafts in the amount of Seventy-five thousand
      dollars ($75,000), plus Four thousand, two hundred eighty-four
      dollars  ($4,284) accrued through October 31, 2007, plus all
      subsequent interest accruing thereon;

    

    (3)  100%
      of accrued salary through October 31, 2007 owed to John Crawford, plus interest
      accrued thereon, due and owing to Mr. John Crawford for services rendered to
      the
      Company in the amount of Thirty-two thousand, five hundred dollars
      ($32,500.00);

    

    (4)  100%
      of accrued salary through October 31, 2007 owed to Dean Crawford, plus interest
      accrued thereon, due and owing to Mr. Dean Crawford for services rendered to
      the
      Company in the amount of Thirty-two thousand, five hundred dollars
      ($32,500.00);

    

    (5)  100%
      of accrued salary through October 31, 2007 owed to James Crawford, plus interest
      accrued thereon, due and owing to Mr. John Crawford for services rendered to
      the
      Company in the amount of Seventeen thousand, five hundred dollars
      ($17,500.00).

    

    (6)   $60,000
      unpaid compensation to Jill Hiner.

    

    

    Total
      Value:                                                                                     [approx
      $321,784.00]

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    
 

    

    EXHIBIT
      C

    

    ASSIGNED
      CONTRACTS

    

    (1)  Commercial
      lease
      agreement for the premises located at 355 South 1550 West in Spanish Fork,
      Utah.

    

    (2)  Employee
      leasing
      agreement with A-Plus Benefits.form6kexhibit4_18.htm

    

      
        	 
	 	
                Dated
                  15 December 2004 and as amended 

                and
                  restated on
                              December
                  2005

                 

                 

              	 
	
                AL
                  MARROUNA INC., AL AREESH
                  INC.

                and
                  AL DAAYEN INC.             (1)

                as
                  joint and several
                  Borrowers

                 

                CALYON                   (2)

                as
                  Arranger

                 

                CALYON                   (3)

                as
                  Facility
                  Agent

                 

                   
                CALYON

                as
                  Security
                  Trustee               (4)

                 

                      
                  THE EXPORT-IMPORT BANK OF KOREA         
                  (5)

                as
                  loan
                  provider

                 

                THE
                  BANKS AND FINANCIAL
                  INSTITUTIONS             (6)

                whose
                  names are set out in
                  Schedule 1

                as
                  Commercial Lenders

                 

                 

              
	 	 	 
	 	
                                                                                   

                LOAN
                  AGREEMENT

                relating
                  to a $468,108,023 loan to finance three LNG Tankers to be time
                  chartered
                  to Ras Laffan Liquefied Natural Gas Company Limited
                  II

                                                                                   

              	 
	
              

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Contents

       

      
        	 Clause Page	 
	 1         Purpose
                and definitions 	
                 1

              
	 2         The
                Commitments and the Ship Tranches	
                 26

              
	 3         Interest and interest periods 	
                 28

              
	 4         Repayment
                and prepayment 	
                 32

              
	 5         Commitment
                commission, fees and expenses	
                 38

              
	 6         Payments
                and taxes; accounts and calculations 	
                 39

              
	 7         Representations and warranties	
                 42

              
	 8         Undertakings 	
                 46

              
	 9         Conditions 	
                 67

              
	 10       Events of Default	
                 68

              
	 11       Indemnities	
                 75

              
	 12       Unlawfulness
                and increased costs 	
                 76

              
	 13       Security
                and set-off 	
                 78

              
	 14       Accounts	
                 79

              
	 15       Assignment,
                transfer and lending office	
                 79

              
	 16       Facility
                Agent and Security Trustee	
                 83

              
	 17       Notices and other matters 	
                 83

              
	 18       Governing law and jurisdiction	
                 88

              
	 Schedule 1
                The Lenders and their addresses	
                 90

              
	 Shedule 2
                The Ships 	
                 94

              
	 Schedule 3
                Form of Drawdown Notice	
                 95

              
	 Schedule 4
                Documents and evidence required as conditions precedent 	
                 98

              
	 Schedule 5
                Form of Substitution Certificate 	
                 107

              
	 Schedule 6
                Repayment Schedules	
                 112

              
	 Schedule 7
                Indicative Schedule of Advances 	
                 119

              

      

       

      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      THIS
        AGREEMENT is dated 15 December 2004 and is amended and restated on
                December
        2005 and made BETWEEN:

       

      
        	
                (1)  

              	
                AL
                  MARROUNA INC. (formerly DSME HULL NO. 2238
                  INC.), AL AREESH INC. (formerly DSME
                  HULL NO. 2239 INC.) and AL DAAYEN INC.
                  (formerly DSME HULL NO. 2240 INC.) as
                  joint and several Borrowers;

              

      

       

      
        	
                (2)  

              	
                CALYON
                  as Arranger;

              

      

       

      
        	
                (3)  

              	
                CALYON
                  as Facility Agent;

              

      

       

      
        	
                (4)  

              	
                CALYON
                  as Security Trustee;

              

      

       

      
        	
                (5)  

              	
                THE
                  EXPORT-IMPORT BANK OF KOREA;
                  and

              

      

       

      
        	
                (6)  

              	
                THE
                  BANKS AND FINANCIAL INSTITUTIONS whose names and addresses are
                  set out in Part 1 of
                  Schedule 1.

              

      

       

      IT IS AGREED
        as follows:

       

      
        	
                1  

              	
                Purpose
                  and
                  definitions

              

      

       

      
        	
                1.1  

              	
                Purpose

              

      

       

      This
        Agreement sets out the terms and conditions upon and subject to which the
        Lenders agree to make available to the Borrowers jointly and severally a
        loan of
        up to an aggregate amount of four hundred and sixty eight million, one hundred
        and eight thousand and twenty three Dollars ($468,108,023), in two Loan
        Tranches, three Ship Tranches and in multiple Advances, each to be used for
        the
        purpose of financing the Deposit Payments to be held with the Deposit Bank
        in
        connection with the letter of credit security to be procured by the Lessee
        in
        favour of the Lessor in respect of the acquisition and the leasing of the
        Ships  by the Lessor to the Lessee .

       

      
        	
                1.2  

              	
                Definitions

              

      

       

      In
        this
        Agreement, unless the context otherwise requires:

       

      “2238
        Borrower” means Al Marrouna Inc. (formerly DSME Hull No. 2238 Inc.) of
        Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
        MH 96960 and includes its successors in title;

       

      “2238
        Deposit Agreement” means the deposit agreement and charge in respect of
        the financing arrangements of the 2238 Ship executed or (as the context may
        require) to be executed by the 2238 Borrower and the Deposit Bank;

       

      “2238
        Deposit Payment” means each deposit payment which is to be placed by
        the 2238 Borrower with the Deposit Bank in connection with the financing
        arrangements for the 2238 Ship in accordance with the provisions of the 2238
        Deposit Agreement and “2238 Deposit Payments” means any or all
        of them;

       

      “2238
        Lease” means the lease agreement in respect of the 2238 Ship executed
        or (as the context may require) to be executed by the Lessor and the
        Lessee;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “2238
        Lessee Assignment” means the deed of assignment executed or (as the
        context may require) to be executed by the Lessee in favour of the Security
        Trustee containing, inter alia, an assignment of the Lessee’s right, interest
        and benefit in and to the 2238 Time Charter, the 2238 Lease, the 2238 Lessor
        Assignment and the Earnings, Insurances and Requisition Compensation in respect
        of the 2238 Ship;

       

      “2238
        Lessor Assignment” means the deed of assignment executed or (as the
        context may require) to be executed by the Lessor in favour of the Lessee
        containing, inter alia, an assignment of the Lessor’s rights, interest and
        benefit in and to the 2238 Shipbuilding Contract, the 2238 Refund Guarantee
        and
        the Insurances and Requisition Compensation in respect of the 2238 Ship and
        a
        charge over the Lessor’s rights, interest and benefit in and to the Lessor
        Proceeds Account;

       

      “2238
        Lessor Parent Support Letter” means the letter of support executed or
        (as the context may require) to be executed by the Lessor Parent in favour
        of
        the Security Trustee in respect of the Lessor’s obligations under the
        Transaction Documents relating to the 2238 Ship;

       

      “2238
        Mortgage” means a first priority statutory mortgage of the 2238 Ship
        executed or (as the context may require) to be executed by the Lessor in
        favour
        of the Lessee and as transferred in favour of the Security Trustee pursuant
        to
        the 2238 Mortgage Transfer;

       

      “2238
        Mortgage Transfer” means the mortgage transfer in respect of the 2238
        Mortgage executed or (as the context may require) to be executed by the Lessee
        in favour of the Security Trustee;

       

      “2238
        Novation Agreement” means the novation agreement in respect of the 2238
        Ship executed or (as the context may require) to be executed by the Builder,
        the
        2238 Borrower, the Replacement Purchaser and the Lessor pursuant to which
        the
        Lessor is to acquire the rights and obligations of the 2238 Borrower under
        the
        2238 Original Shipbuilding Contract;

       

      “2238Original
        Shipbuilding Contract” means the contract dated 3 June 2004 between the
        Builder and the 2238 Borrower pursuant to which the Builder is to construct
        and
        sell, and the 2238 Borrower is to purchase, the 2238 Ship (and as amended
        by an
        addendum dated 1 December 2004 between the Borrowers and the Builder and
        as
        amended by and incorporating the rights and obligations under a memorandum
        of
        agreement dated 18 August 2005 entered into between the Teekay Guarantor
        and the
        Builder (pursuant to which the Builder agreed to procure and sell to the
        Teekay
        Guarantor certain depot spare parts for the Ships) as the same has been novated
        from the Teekay Guarantor in favour of the 2238 Borrower by a novation agreement
        to be entered into on or about the date hereof between the Builder, the Teekay
        Guarantor and the 2238 Borrower);

       

      “2238
        Original Time Charter” means the sub-time charter dated 1 July 2004 in
        respect of the 2238 Ship executed by the Teekay Charterer
        and the Time Charterer;

       

      “2238
        Proceeds Deed” means the proceeds deed in respect of the 2238 Ship
        executed or (as the context may require) to be executed by the Lessor, the
        Lessee, the Borrowers, the Replacement Purchaser, the Security Trustee, the
        Proceeds Account Bank, the Operating Account Bank, the Debt Swap Providers,
        the
        Lease Swap Provider, KEXIM and the Commercial Lenders;

       

      “2238
        Refund Guarantee” means the letter of guarantee issued by the Refund
        Guarantor in respect of the Builder’s obligations to refund instalments paid by
        the Lessor under the 2238 Shipbuilding Contract and any replacement or
        additional guarantee(s) issued or to be issued by the Refund Guarantor in
        respect of such obligations that are acceptable to the Lenders and any extension
        or renewals to such guarantee(s);

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “2238
        Share Pledge” means the pledge of all of the issued shares of the 2238
        Borrower executed or (as the context may require) to be executed by the
        Shareholder in favour of the Security Trustee;

       

      “2238
        Ship” means the vessel with Hull No. 2238 being constructed in Koje
        Island, Korea by the Builder and to be registered in the ownership of the
        Lessor
        through the Registry under the laws and flag of the Flag State and as more
        particularly described in the definition of “Ship” in the 2238 Proceeds
        Deed;

       

      “2238
        Shipbuilding Contract” means the 2238 Original Shipbuilding Contract as
        novated to the Lessor pursuant to the 2238 Novation Agreement and, where
        the
        context so requires, as further novated to the Replacement Purchaser pursuant
        to
        the 2238 Novation Agreement;

       

      “2238
        Time Charter” means the 2238 Original Time Charter as novated from the
        Teekay Charterer to the Lessee and thereafter amended pursuant to the 2238
        Time
        Charter Novation Agreement together with its supplemental purchase option
        side
        letter dated on or about the date of the Supplemental Agreement from the
        Lessee
        to the Time Charterer;

       

      “2238
        Time Charter Novation Agreement” means the novation agreement in
        respect of the 2238 Ship executed or (as the context may require) to be executed
        by the Lessee, the Teekay Charterer and the Time Charterer pursuant to which
        the
        Lessee is to acquire the rights and the obligations of the Teekay Charterer
        under the 2238 Original Time Charter;

       

      “2239
        Borrower” means Al Areesh Inc. (formerly DSME Hull No. 2239 Inc.) of
        Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
        MH 96960 and includes its successors in title;

       

      “2239
        Deposit Agreement” means the deposit agreement and charge in respect of
        the financing arrangements of the 2239 Ship executed or (as the context may
        require) to be executed by the 2239 Borrower and the Deposit Bank;

       

      “2239
        Deposit Payment” means each deposit payment which is to be placed by
        the 2239 Borrower with the Deposit Bank in connection with the financing
        arrangements for the 2239 Ship in accordance with the provisions of the 2239
        Deposit Agreement and “2239 Deposit Payments” means any or all
        of them;

       

      “2239
        Lease” means the lease agreement in respect of the 2239 Ship executed
        or (as the context may require) to be executed by the Lessor and the
        Lessee;

       

      “2239
        Lessee Assignment” means the deed of assignment executed or (as the
        context may require) to be executed by the Lessee in favour of the Security
        Trustee containing, inter alia, an assignment of the Lessee’s right, interest
        and benefit in and to the 2239 Time Charter, the 2239 Lease, the 2239 Lessor
        Assignment and the Earnings, Insurances and Requisition Compensation in respect
        of the 2239 Ship;

       

      “2239
        Lessor Assignment” means the deed of assignment executed or (as the
        context may require) to be executed by the Lessor in favour of the Lessee
        containing, inter alia, an assignment of the Lessor’s rights, interest and
        benefit in and to the 2239 Shipbuilding Contract, the 2239 Refund Guarantee
        and
        the Insurances and Requisition Compensation in respect of the 2239 Ship and
        a
        charge over the Lessor’s rights, interest and benefit in and to the Lessor
        Proceeds Account;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “2239
        Lessor Parent Support Letter” means the letter of support executed or
        (as the context may require) to be executed by the Lessor Parent in favour
        of
        the Security Trustee in respect of the Lessor’s obligations under the
        Transaction Documents relating to the 2239 Ship;

       

      “2239
        Mortgage” means a first priority statutory mortgage of the 2239 Ship
        executed or (as the context may require) to be executed by the Lessor in
        favour
        of the Lessee and as transferred in favour of the Security Trustee pursuant
        to
        the 2239 Mortgage Transfer;

       

      “2239
        Mortgage Transfer” means the mortgage transfer in respect of the 2239
        Mortgage executed or (as the context may require) to be executed by the Lessee
        in favour of the Security Trustee;

       

      “2239
        Novation Agreement” means the novation agreement in respect of the 2239
        Ship executed or (as the context may require) to be executed by the Builder,
        the
        2239 Borrower, the Replacement Purchaser and the Lessor pursuant to which
        the
        Lessor is to acquire the rights and obligations of the 2239 Borrower under
        the
        2239 Original Shipbuilding Contract;

       

      “2239
        Original Shipbuilding Contract” means the contract dated 3 June 2004
        between the Builder and the 2239 Borrower pursuant to which the Builder is
        to
        construct and sell, and the 2239 Borrower is to purchase, the 2239 Ship (and
        as
        amended by an addendum dated 1 December 2004 between the Borrowers and the
        Builder);

       

      “2239
        Original Time Charter” means the sub-time charter dated 1 July 2004 in
        respect of the 2239 Ship executed by the Teekay Charterer and the Time
        Charterer;

       

      “2239
        Proceeds Deed” means the proceeds deed in respect of the 2239 Ship
        executed or (as the context may require) to be executed by the Lessor, the
        Lessee, the Borrowers, the Replacement Purchaser, the Security Trustee, the
        Proceeds Account Bank, the Operating Account Bank, the Debt Swap Providers,
        the
        Lease Swap Provider, KEXIM and the Commercial Lenders;

       

      “2239
        Refund Guarantee” means the letter of guarantee issued by the Refund
        Guarantor in respect of the Builder’s obligations to refund instalments paid by
        the Lessor under the 2239 Shipbuilding Contract and any replacement or
        additional guarantee(s) issued or to be issued by the Refund Guarantor in
        respect of such obligations that are acceptable to the Lenders and any extension
        or renewals to such guarantee(s);

       

      “2239
        Share Pledge” means the pledge of all of the issued shares of the 2239
        Borrower executed or (as the context may require) to be executed by the
        Shareholder in favour of the Security Trustee;

       

      “2239
        Ship” means the vessel with Hull No. 2239 being constructed in Koje
        Island, Korea by the Builder and to be registered in the ownership of the
        Lessor
        through the Registry under the laws and flag of the Flag State and as more
        particularly described in the definition of “Ship” in the 2239 Proceeds
        Deed;

       

      “2239
        Shipbuilding Contract” means the 2239 Original Shipbuilding Contract as
        novated to the Lessor pursuant to the 2239 Novation Agreement and, where
        the
        context so requires, as further novated to the Replacement Purchaser pursuant
        to
        the 2239 Novation Agreement;

       

      “2239
        Time Charter” means the 2239 Original Time Charter as novated from the
        Teekay Charterer to the Lessee and thereafter amended pursuant to the 2239
        Time
        Charter Novation Agreement together with its supplemental purchase option
        side
        letter dated on or about the date of the Supplemental Agreement from the
        Lessee
        to the Time Charterer;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “2239
        Time Charter Novation Agreement” means the novation agreement in
        respect of the 2239 Ship executed or (as the context may require) to be executed
        by the Lessee, the Teekay Charterer and the Time Charterer pursuant to which
        the
        Lessee is to acquire the rights and the obligations of the Teekay Charterer
        under the 2239 Original Time Charter;

       

      “2240
        Borrower” means Al Daayen Inc. (formerly DSME Hull No. 2240 Inc.) of
        Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands,
        MH 96960 and includes its successors in title;

       

      “2240
        Deposit Agreement” means the deposit agreement and charge in respect of
        the financing arrangements of the 2240 Ship executed or (as the context may
        require) to be executed by the 2240 Borrower and the Deposit Bank;

       

      “2240
        Deposit Payment” means each deposit payment which is to be placed by
        the 2240 Borrower with the Deposit Bank in connection with the financing
        arrangements for the 2240 Ship in accordance with the provisions of the 2240
        Deposit Agreement and “2240 Deposit Payments” means any or all
        of them;

       

      “2240
        Lease” means the lease agreement in respect of the 2240 Ship executed
        or (as the context may require) to be executed by the Lessor and the
        Lessee;

       

      “2240
        Lessee Assignment” means the deed of assignment executed or (as the
        context may require) to be executed by the Lessee in favour of the Security
        Trustee containing, inter alia, an assignment of the Lessee’s right, interest
        and benefit in and to the 2240 Time Charter, the 2240 Lease, the 2240 Lessor
        Assignment and the Earnings, Insurances and Requisition Compensation in respect
        of the 2240 Ship;

       

      “2240
        Lessor Assignment” means the deed of assignment executed or (as the
        context may require) to be executed by the Lessor in favour of the Lessee
        containing, inter alia, an assignment of the Lessor’s rights, interest and
        benefit in and to the 2240 Shipbuilding Contract, the 2240 Refund Guarantee
        and
        the Insurances and Requisition Compensation in respect of the 2240 Ship and
        a
        charge over the Lessor’s rights, interest or benefit in and to the Lessor
        Proceeds Account;

       

      “2240
        Lessor Parent Support Letter” means the letter of support executed or
        (as the context may require) to be executed by the Lessor Parent in favour
        of
        the Security Trustee in respect of the Lessor’s obligations under the
        Transaction Documents relating to the 2240 Ship;

       

      “2240
        Mortgage” means a first priority statutory mortgage of the 2240 Ship
        executed or (as the context may require) to be executed by the Lessor in
        favour
        of the Lessee and as transferred in favour of the Security Trustee pursuant
        to
        the 2240 Mortgage Transfer;

       

      “2240
        Mortgage Transfer” means the mortgage transfer in respect of the 2240
        Mortgage executed or (as the context may require) to be executed by the Lessee
        in favour of the Security Trustee;

       

      “2240
        Novation Agreement” means the novation agreement in respect of the 2240
        Ship executed or (as the context may require) to be executed by the Builder,
        the
        2240 Borrower, the Replacement Purchaser and the Lessor pursuant to which
        the
        Lessor is to acquire the rights and obligations of the 2240 Borrower under
        the
        2240 Original Shipbuilding Contract;

       

      “2240
        Original Shipbuilding Contract” means the contract dated 3 June 2004
        between the Builder and the 2240 Borrower pursuant to which the Builder is
        to
        construct and sell, and the 2240 Borrower is to purchase, the 2240 Ship (and
        as
        amended by an addendum dated 1 December 2004 between the Borrowers and the
        Builder);

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “2240
        Original Time Charter” means the sub-time charter dated 1 July 2004 in
        respect of the 2240 Ship executed by the Teekay Charterer and the Time
        Charterer;

       

      “2240
        Proceeds Deed” means the proceeds deed in respect of the 2240 Ship
        executed or (as the context may require) to be executed by the Lessor, the
        Lessee, the Borrowers, the Replacement Purchaser, the Security Trustee, the
        Proceeds Account Bank, the Operating Account Bank, the Debt Swap Providers,
        the
        Lease Swap Provider, KEXIM and the Commercial Lenders;

       

      “2240
        Refund Guarantee” means the letter of guarantee issued by the Refund
        Guarantor in respect of the Builder’s obligations to refund instalments paid by
        the Lessor under the 2240 Shipbuilding Contract and any replacement or
        additional guarantee(s) issued or to be issued by the Refund Guarantor in
        respect of such obligations that are acceptable to the Lenders and any extension
        or renewals to such guarantee(s);

       

      “2240
        Share Pledge” means the pledge of all of the issued shares of the 2240
        Borrower executed or (as the context may require) to be executed by the
        Shareholder in favour of the Security Trustee;

       

      “2240
        Ship” means the vessel with Hull No. 2240 being constructed in Koje
        Island, Korea by the Builder and to be registered in the ownership of the
        Lessor
        through the Registry under the laws and flag of the Flag State and as more
        particularly described in the definition of “Ship” in the 2240 Proceeds
        Deed;

       

      “2240
        Shipbuilding Contract” means the 2240 Original Shipbuilding Contract as
        novated to the Lessor pursuant to the 2240 Novation Agreement and, where
        the
        context so requires, as further novated to the Replacement Purchaser pursuant
        to
        the 2240 Novation Agreement;

       

      “2240
        Time Charter” means the 2240 Original Time Charter as novated from the
        Teekay Charterer to the Lessee and thereafter amended pursuant to the 2240
        Time
        Charter Novation Agreement together with its supplemental purchase option
        side
        letter dated on or about the date of the Supplemental Agreement from the
        Lessee
        to the Time Charterer;

       

      “2240
        Time Charter Novation Agreement” means the novation agreement in
        respect of the 2240 Ship executed or (as the context may require) to be executed
        by the Lessee, the Teekay Charterer and the Time Charterer pursuant to which
        the
        Lessee is to acquire the rights and the obligations of the Teekay Charterer
        under the 2240 Original Time Charter;

       

      “Account
        Pledge” means the account pledge (acte de nantissement de compte
        bancaire) in respect of the Operating Account and the Collection Account
        executed or (as the context may require) to be executed by the Lessee in
        favour
        of the Security Trustee;

       

      “Advance”
        means each borrowing or, as the context may require, proposed borrowing of
        a
        proportion of the Total Commitments by the Borrowers or (as the context may
        require) the principal amount of such borrowing and “Advances”
means any or all of them;

       

      “Agency
        Agreement” means the agency agreement dated 15 December 2004 between
        the Facility Agent, the other Finance Parties and the Borrowers as amended
        and
        restated pursuant to the Supplemental Agreement;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Agreement”
        means this loan agreement as originally executed on 15 December 2004 and
        as
        amended and restated pursuant to the Supplemental Agreement;

       

      “Approved
        Brokers” means Marsh & McLennan Companies or such other firm of
        insurance brokers, appointed by the Borrowers or the Lessee, as may from
        time to
        time be approved in writing by the Facility Agent;

       

      “Approved
        Management Agreement” means a management agreement on terms previously
        approved in writing by the Facility Agent pursuant to clause 8.6.18
        providing, inter alia, for the technical management of a Mortgaged Ship by
        a
        person other than any of the Borrowers or any member of the Teekay Guarantor
        Group;

       

      “Approved
        Shipbrokers” means collectively, Poten & Partners, Clarkson/LNG
        Solutions, Fearnleys, Platou and Bassoe or any other independent firm of
        shipbrokers nominated by the Borrowers and approved by the Facility Agent
        (acting on the instructions of the Majority Lenders) and “Approved
        Shipbroker” means any of them;

       

      “Arranger”
        means Calyon acting through its offices at 9 quai du Président Paul Doumer,
        92920 Paris La Defense Cedex, France and includes its successors in
        title;

       

      “Available
        Commitment” in relation to a Lender at any time, means the amount of
        its Commitment less the amount of its Contribution at that time;

       

      “Banking
        Day” means a day (other than Saturday or Sunday) on which dealings in
        deposits in Dollars are carried on in the London Interbank Eurocurrency Market
        and on which banks are open for business in London, New York City, Paris,
        Doha
        and Seoul;

       

      “Borrowed
        Money” means Indebtedness in respect of (a) money borrowed or raised
        and debit balances at banks, (b) any bond, note, loan stock, debenture or
        similar debt instrument, (c) acceptance or documentary credit facilities,
        (d) receivables sold or discounted (otherwise than on a non-recourse
        basis), (e) deferred payments for assets or services acquired, (f) finance
        leases and hire purchase contracts, (g) swaps, forward exchange contracts,
        futures and other derivatives (each calculated on a mark to market basis),
        (h)
        any other transaction (including without limitation forward sale or purchase
        agreements) having the commercial effect of a borrowing or raising of money
        and
        (i) guarantees in respect of Indebtedness of any person falling within any
        of
        (a) to (h) above;

       

      “Borrowers”
        means the 2238 Borrower, the 2239 Borrower and the 2240
        Borrower and “Borrower” means any of them;

       

      “Builder”
        means Daewoo Shipbuilding & Marine Engineering Co., Ltd of 140 Da-Dong,
        Jung-gu, Seoul, 100-180 Korea;

       

      “Cancellation
        Fee” means, in respect of any Time Charter, the fee payable by the Time
        Charterer to the Lessee under such Time Charter following the exercise by
        the
        Time Charterer of its cancellation rights under clause 2d of that Time
        Charter;

       

      “Casualty
        Amount” means for any Mortgaged Ship, five million Dollars ($5,000,000)
        (or the equivalent in any other currency);

       

      “Classification”
        means, in relation to each Ship, the classification required by the terms
        of the
        relevant Shipbuilding Contract and after the Delivery Date for each Ship,
        such
        classification or the highest classification available for such Ship with
        the
        Classification Society;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Classification
        Society” means, in respect of each of the Ships, Lloyds Register of
        Shipping, American Bureau of Shipping, Det norske Veritas or such other
        classification society which the Majority Lenders shall, at the request of
        the
        relevant Borrower or the Lessee, have agreed in writing shall be treated
        as the
        Classification Society in relation to a Ship for the purposes of the Security
        Documents;

       

      “Collection
        Account” means the Dollar account of the Lessee opened or (as the
        context may require) to be opened by the Lessee with the Operating Account
        Bank
        designated “Teekay Nakilat Limited - Collection Account” and with account number
        00 224 913 318 and into which all Earnings in respect of the 2238 Ship, the
        2239
        Ship and the 2240 Ship are to be paid after an Event of Default has occurred
        which is continuing and unwaived and includes any sub-account thereof or
        time
        deposit account constituted by moneys originally held on the Collection Account
        and any other account designated by the Facility Agent to be the Collection
        Account for the purposes of this Agreement and the Security
        Documents;

       

      “Commercial
        Interest Reference Rate” means four point eight nine per cent. (4.89%)
        per annum, being the commercial interest reference rate announced by the
        Organisation for Economic Co-operation and Development for the period between
        15
        May 2004 and 14 June 2004 for Dollar loans of over eight and a half (8.5)
        years
        duration;

       

      “Commercial
        Lenders” means collectively the banks and financial institutions (other
        than KEXIM) whose names and addresses are listed in Schedule 1 and includes
        their respective successors in title and New Lenders and “Commercial
        Lender” means any one of them individually;

       

      “Commercial
        Lenders Tranche” means the aggregate of the Commitments of the
        Commercial Lenders or, if any part of such Commitments has been advanced,
        the
        aggregate of the remaining Commitments (if any) and the Contributions of
        the
        Commercial Lenders at any time;

       

      “Commercial
        Tranche Margin” means zero point nine per cent. (0.90%) per
        annum;

       

      “Commitment”
        means, in relation to a Lender at any relevant time, the amount set opposite
        its
        name in Part 2 of Schedule 1 and/or, in the case of a New Lender, the
        amount specified in the relevant Substitution Certificate, as reduced, in
        each
        case, by any relevant term of this Agreement and so that, if at such time
        the
        Total Commitments have been reduced to zero, references to a Lender’s Commitment
        shall be construed as a reference to that Lender’s Commitment immediately prior
        to such reduction to zero and “Commitments” means any or all of
        them;

       

      “Compulsory
        Acquisition” in relation to a Ship, means the requisition for title or
        other compulsory acquisition, requisition, appropriation, expropriation,
        deprivation, forfeiture or confiscation for any reason of a Ship by any
        Government Entity or other competent authority, whether de jure or de facto,
        but
        shall exclude requisition for use or hire not involving a requisition of
        title;

       

      “Consent
        and Agreement” means, in respect of each Ship, the consent and
        agreement executed or (as the context may require) to be executed between
        the
        Security Trustee, the Lessor, the Lessee and the Time Charterer pursuant
        to the
        terms of the relevant Time Charter and “Consent and Agreements”
means any or all of them;

       

      “Contract
        Price” means in relation to each Ship, the price payable by the Lessor
        to the Builder for the purchase of such Ship in accordance with the relevant
        Shipbuilding Contract;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Contribution”
        means, in relation to a Lender, the principal amount of the Loan owing to
        such
        Lender at any relevant time;

       

      “Debt
        Swap Providers” means Calyon, Fortis Bank N.V./S.A. and DnB NOR Bank
        ASA;

       

      “Default”
        means any Event of Default or any event or circumstance which with the giving
        of
        notice by the Facility Agent or lapse of time or the satisfaction of any
        other
        condition (or any combination thereof) would constitute an Event of
        Default;

       

      “Delivery”
        means, in relation to a Ship:

       

      
        	
                (a)  

              	
                the
                  delivery of that Ship to, and the acceptance of such Ship by, the
                  Lessor
                  from the Builder pursuant to the relevant Shipbuilding
                  Contract;

              

      

       

      
        	
                (b)  

              	
                the
                  delivery of that Ship to, and the acceptance of such Ship by, the
                  Lessee
                  from the Lessor pursuant to the relevant Lease;
                  and

              

      

       

      
        	
                (c)  

              	
                the
                  delivery of that Ship to, and the acceptance of such Ship by, the
                  Time
                  Charterer from the Lessee pursuant to the relevant Time
                  Charter;

              

      

       

      “Delivery
        Advance” means, in relation to each Ship and each Ship Tranche, the
        Advance requested by the Borrowers in connection with the relevant Deposit
        Payment required to be made at or around the time of payment of the Delivery
        Instalment for such Ship;

       

      “Delivery
        Date” means, in relation to each Ship, the date on which the Delivery
        of such Ship to the Lessor pursuant to the Shipbuilding Contract for such
        Ship,
        to the Lessee pursuant to the Lease for such Ship and to the Time Charterer
        pursuant to the Time Charter for such Ship, takes place and “Delivery
        Dates” means any or all of them;

       

      “Delivery
        Instalment” means, in relation to each Shipbuilding Contract, the fifth
        instalment of the relevant Contract Price payable by the Lessor to the Builder
        on the delivery of the relevant Ship under Article 2.3 of such Shipbuilding
        Contract and described therein as the “Fifth (Final) Instalment”;

       

      “Deposit
        Agreement” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Deposit Agreement;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Deposit Agreement;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240 Deposit
                  Agreement,

              

      

       

      and
        “Deposit Agreements” means any or all of them;

       

      “Deposit
        Bank” means Calyon, London branch acting through its office at
        Broadwalk House, 5 Appold Street, London EC2A 2DA;

       

      “Deposit
        Payments” means any or all of the 2238 Deposit Payments, the 2239
        Deposit Payments and the 2240 Deposit Payments;

       

      “Disposal
        Reduction Date” has the meaning given to it in
        clause 4.4.3;

       

      “DOC”
        means a document of compliance issued to an Operator in accordance with rule
        13
        of the ISM Code;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Dollars”
        and “$” mean the lawful currency of the United States of
        America and in respect of all payments to be made under any of the Security
        Documents mean funds which are for same day settlement in the New York Clearing
        House Interbank Payments System (or such other U.S. dollar funds as may at
        the
        relevant time be customary for the same day settlement of international banking
        transactions denominated in U.S. dollars);

       

      “Drawdown
        Date” means, in relation to each Advance, the Banking Day falling
        within the Drawdown Period for the Ship Tranche to which such Advance relates,
        on which such Advance is, or is to be, drawn down;

       

      “Drawdown
        Notice” means, in relation to each Advance, a notice substantially in
        the form set out in Schedule 3 in respect of such Advance;

       

      “Drawdown
        Period” means, in relation to each Ship Tranche, the period from the
        date of this Agreement and ending on whichever is the earliest of (a) the
        Termination Date for that Ship Tranche or (b) the date on which the aggregate
        amount of the Advances in respect of such Ship Tranche is equal to the
        Commitments of all the Lenders in respect of such Ship Tranche or (c) the
        date
        on which the Borrowers cancel the whole of the undrawn Commitments in respect
        of
        such Ship Tranche pursuant to clause 4.8;

       

      “Earnings”
        means, in relation to any Mortgaged Ship, all moneys whatsoever from time
        to
        time due or payable to the Lessee during the Security Period arising out
        of the
        use or operation of such Mortgaged Ship including (but without limiting the
        generality of the foregoing) all freight, hire and passage moneys, income
        arising out of pooling arrangements, compensation payable to the Lessee in
        the
        event of requisition of such Mortgaged Ship for hire, remuneration for salvage
        or towage services, demurrage and detention moneys and damages for breach
        (or
        payments for variation or termination) of any charterparty or other contract
        for
        the employment of such Mortgaged Ship and any sums recoverable under any
        loss of
        earnings insurance;

       

      “Encumbrance”
        means any mortgage, charge (whether fixed or floating), pledge, lien,
        hypothecation, assignment, trust arrangement or security interest or other
        encumbrance of any kind securing any obligation of any person or any type
        of
        preferential arrangement (including without limitation title transfer and/or
        retention arrangements having a similar effect);

       

      “End
        of Funding Date” means, in the case of each Ship, the following
        dates:

       

      2238
        Ship:                                  28
        June 2007;

       

      2239
        Ship:                                  7
        September 2007; and

       

      2240
        Ship:                                  26
        December 2007;

       

      “Environmental
        Affiliate” in respect of any Borrower or the Lessee, means any agent or
        employee or any Related Company of that Borrower or the Lessee (as the case
        may
        be) and, in respect of any Relevant Ship, means the Security Party (or the
        Related Company of a Security Party) which is the owner or charterer of,
        or
        person responsible for crewing, that Relevant Ship and the manager (if any)
        of
        that Relevant Ship and any agent or employee of each such person;

       

      “Environmental
        Approval” means any consent, authorisation, licence or approval of any
        governmental or public body or authorities or courts applicable to any Relevant
        Ship or its operation or the carriage of cargo and/or passengers thereon
        and/or
        the provision of goods and/or services on or from such Relevant Ship required
        under any Environmental Laws;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Environmental
        Claim” means any and all enforcement, clean-up, removal or other
        governmental or regulatory actions or orders instituted or completed pursuant
        to
        any Environmental Laws or any Environmental Approval together with claims
        made
        by any third party relating to damage, contribution, loss or injury, resulting
        from any actual emission, spill, release or discharge of a Pollutant from
        any
        Relevant Ship;

       

      “Environmental
        Laws” means all national, international and state laws, rules,
        regulations, treaties and conventions applicable to any Relevant Ship pertaining
        to the pollution or protection of human health or the environment including,
        without limitation, the carriage of Pollutants and actual or threatened
        emissions, spills, releases or discharges of Pollutants;

       

      “Event
        of Default” means any of the events or circumstances described in
        clause 10.1;

       

      “Existing
        Lender” has the meaning ascribed to it in
        clause 15.3.1;

       

      “Facility
        Agent” means Calyon acting through its offices at 9 quai du Président
        Paul Doumer, 92920 Paris La Defense Cedex, France (or of such other address
        as
        may last have been notified to the other parties to this Agreement pursuant
        to
        clause 17.1.3) and its successor in title or such other person as may be
        appointed facility agent for the Finance Parties pursuant to the Agency
        Agreement;

       

      “Fee
        Letters” means collectively the letters addressed to each of KEXIM and
        each of the Commercial Lenders by the Facility Agent dated on or about the
        date
        of this Agreement and the letters addressed to the Facility Agent or the
        Arranger by the Borrowers dated on or about the date of this Agreement, and
        which set out fees that are payable by the Borrowers in connection with the
        facilities provided pursuant to this Agreement and the services provided
        or to
        be provided by any of the Finance Parties;

       

      “Final
        Maturity Date” means, in respect of each Ship (and subject to
        clause 6.3), the date which is the
        twelfth anniversary of the Delivery Date for that
        Ship;

       

      “Finance
        Parties” means each of the Commercial Lenders, KEXIM, the Facility
        Agent, the Security Trustee, the Arranger, the Proceeds Account Bank and
        the
        Operating Account Bank;

       

      “First
        Advance” means, in respect of each Ship Tranche, the first Advance in
        respect of that Ship Tranche made available under this Agreement;

       

      “First
        Instalment” means, in relation to each Shipbuilding Contract (and
        ignoring for this purpose the payment arrangements in respect of the Initial
        Instalment under the Novation Agreement for that Shipbuilding Contract),
        the
        first instalment of the relevant Contract Price payable by the Lessor to
        the
        Builder under Article 2.3 of such Shipbuilding Contract and described
        therein as the “First Instalment”;

       

      “First
        Ship” means the Ship which is first in time to be
        delivered;

       

      “Flag
        State” means the Bahamas or such other state or territory designated in
        writing by the Lenders, at the request of the Borrowers, as being the
“Flag State” of a Ship for the purposes of the Security
        Documents;

       

      “Fourth
        Instalment” means, in relation to each Shipbuilding Contract, the
        fourth instalment of the relevant Contract Price payable by the Lessor to
        the
        Builder under Article 2.3 of such Shipbuilding Contract and described
        therein as the “Fourth Instalment”;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Government
        Entity” means and includes (whether having a distinct legal personality
        or not) any national or local government authority, board, commission,
        department, division, organ, instrumentality, court or agency and any
        association, organisation or institution of which any of the foregoing is
        a
        member or to whose jurisdiction any of the foregoing is subject or in whose
        activities any of the foregoing is a participant;

       

      “Guarantees”
        means (a) the Teekay Guarantee and (b) the QGTC Guarantee and
“Guarantee” means either of them;

       

      “Guarantors” means
        (a) the Teekay Guarantor and (b) QGTC and “Guarantor” means
        either of them;

       

      “Guarantors’
        Groups” means both of the Teekay Guarantor Group and the QGTC Group and
        “Guarantor Group” means either of them;

       

      “Indebtedness”
        means any obligation for the payment or repayment of money, whether as principal
        or as surety and whether present or future, actual or contingent;

       

      “Initial
        Instalment” means in relation to each Ship, the instalment of the
        Contract Price for that Ship payable by the Lessor to the Builder under clause
        4
        of the Novation Agreement for that Ship;

       

      “Insurances”
        in relation to any Mortgaged Ship, means all policies and contracts of insurance
        (which expression includes all entries of such Mortgaged Ship in a protection
        and indemnity or war risks association) which are from time to time during
        the
        Security Period in place or taken out or entered into (or, as the context
        may
        permit, which are required to be in place or taken out or entered into) in
        respect of such Mortgaged Ship or otherwise howsoever in connection with
        such
        Mortgaged Ship and all benefits thereof (including claims of whatsoever nature
        and return of premiums);

       

      “Interest
        Payment Date” means, in relation to each Interest Period, the last day
        of that Interest Period save in respect of any Interest Period of six (6)
        months, in which case, there shall also be an Interest Payment Date on the
        date
        falling three (3) months after the first day of such Interest
        Period;

       

      “Interest
        Period” means each period for the calculation of interest in respect of
        an Advance, a Ship Tranche or the Loan determined in accordance with
        clause 3.2;

       

      “Interim
        Disposition” has the meaning given to that expression in the Proceeds
        Deeds;

       

      “Intra-Group
        Transactions” means transactions and dealings between two or more
        Security Parties who are members of the Teekay Guarantor Group and, for the
        purposes of the use of this defined term in clauses 8.3.7 and 8.3.10 only,
        Teekay LNG Partners L.P. shall be regarded as a Security Party who is a member
        of the Teekay Guarantor Group;

       

      “ISM
        Code” means the International Management Code for the Safe Operation of
        Ships and for Pollution Prevention constituted pursuant to Resolution A.
        741
        (18) of the International Maritime Organisation and incorporated into the
        Safety
        of Life at Sea Convention and includes any amendments or extensions thereto
        and
        any regulation issued pursuant thereto;

       

      “ISPS
        Code” means the International Ship and Port Facility Security Code of
        the International Maritime Organisation and includes any amendments or
        extensions thereto and any regulation issued pursuant thereto;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “KEXIM”
        means The Export-Import Bank of Korea whose registered office is at 16-1,
        Yoido-dong, Youngdeungpo-gu, Seoul, Korea;

       

      “KEXIM
        Post-Delivery Tranche Margin” means zero point five per cent. (0.50%)
        per annum;

       

      “KEXIM
        Pre-Delivery Tranche Margin” means one point zero five per cent.
        (1.05%) per annum;

       

      “KEXIM
        Rate” means:

       

      
        	
                (a)  

              	
                in
                  respect of each Interest Period for each Ship Tranche for each
                  Ship during
                  the Security Period up to the Delivery Date for such Ship (but
                  subject to
                  clause 3.2.3(d)), the rate per annum that is the aggregate of (i) the
                  KEXIM Pre-Delivery Tranche Margin and (ii) LIBOR for each such
                  Interest
                  Period; and

              

      

       

      
        	
                (b)  

              	
                in
                  respect of each Interest Period for each Ship Tranche for each
                  Ship during
                  the Security Period on and from the Delivery Date of the relevant
                  Ship,
                  five point three nine per cent. (5.39%) per annum (being the aggregate
                  of
                  the Commercial Interest Reference Rate and the KEXIM Post-Delivery
                  Tranche
                  Margin);

              

      

       

      “KEXIM
        Tranche” means the aggregate of the Commitments of KEXIM or, if any
        part of its Commitments have been made, the aggregate of its remaining
        Commitments (if any) and the Contributions made by KEXIM at any
        time;

       

      “Lease”
        means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Lease;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Lease;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240
                  Lease,

              

      

       

      and
        “Leases” means any or all of them;

       

      “Lease
        Event of Default” has the meaning given to the expression “Termination
        Event” in any of the Leases;

       

      “Lease
        Protocol of Delivery and Acceptance” means, in respect of each Ship,
        each protocol of delivery and acceptance to be signed by or on behalf of
        the
        Lessor and the Lessee evidencing the delivery and acceptance of that Ship
        pursuant to the relevant Lease, such protocol to be in a form satisfactory
        to
        the Facility Agent, acting reasonably;

       

      “Lease
        Swap Provider” means Calyon, in its capacity as lease swap provider,
        acting through its office at 9 quai du Président Paul Doumer, 92920 Paris, La
        Defense Cedex, France;

       

      “Lenders”
        means KEXIM and the Commercial Lenders and “Lender” means any
        of them;

       

      “Lending
        Office” has the meaning given to it in clause 15.8;

       

      “Lessee”
        means Teekay Nakilat (II) Limited, a company incorporated in England and
        Wales
        whose registered office is at 49 St. James’s Street, London SW1A
        1JT;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Lessee
        Assignment” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Lessee Assignment;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Lessee Assignment;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240 Lessee
                  Assignment,

              

      

       

      and
        “Lessee Assignments” means any or all of them;

       

      “Lessee
        Share Charge” means the charge over all of the issues shares of the
        Lessee executed by the Shareholder in favour of the Security
        Trustee;

       

      “Lessor”
        means SeaSpirit Leasing Limited, a company incorporated in England and Wales
        whose registered office is at PO Box 39900, Bishopsgate Exchange, 155
        Bishopsgate, London EC2M 3YB;

       

      “Lessor
        Assignment” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Lessor Assignment;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Lessor Assignment;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240 Lessor
                  Assignment,

              

      

       

      and
        “Lessor Assignments” means any or all of them;

       

      “Lessor
        Parent” means Halifax plc of Trinity Road, Halifax HX1
        2RG;

       

      “Lessor
        Parent Support Letter” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Lease, the 2238 Lessor Parent Support Letter;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Lease, the 2239 Lessor Parent Support Letter;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Lease, the 2240 Lessor Parent Support
                  Letter,

              

      

       

      and
        “Lessor Parent Support Letters” means any or all of
        them;

       

      “Lessor
        Proceeds Account” means the Dollar account of the Lessor opened by the
        Lessor with the Proceeds Account Bank designated “SeaSpirit Leasing Limited -
        Lessor Proceeds Account” and with account number 01 034247 001 02 0 and includes
        any sub-account thereof or time deposit account constituted by moneys originally
        held on the Lessor Proceeds Account and any other account designated by the
        Facility Agent to be the Lessor Proceeds Account for the purposes of this
        Agreement and the Security Documents;

       

      “LIBOR”
        means in relation to any amount and for any period the offered rate (if any)
        for
        deposits in Dollars for such amount and for such period which is:

       

      
        	
                (a)  

              	
                the
                  rate, for such period, appearing on Reuters screen page “LIBOR01” or such
                  other page as may replace such page “LIBOR01” on such system or on any
                  other system of the information vendor for the time being designated
                  by
                  the British Bankers’ Association to calculate the BBA Interest Settlement
                  Rate (as defined in the British Bankers’ Association’s Recommended Terms
                  and Conditions (“BBAIRS” terms) dated August 1995)),  at or
                  about 11:00 a.m. (London time) on the Quotation Date for such period;
                  or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (b)  

              	
                if
                  for any reason Reuters screen or other designated system is not
                  operating
                  at the relevant time, the rate per annum determined by the Facility
                  Agent
                  to be equal to the arithmetic mean (rounded upwards, if not already
                  such a
                  multiple, to the nearest whole multiple of one sixteenth of one
                  percent)
                  of the rates offered by no less than three (3) leading banks in
                  the London
                  interbank market selected by the Facility Agent to other prime
                  banks in
                  the London interbank market for deposits in Dollars in an amount
                  approximately equal to such amount for a period equivalent to such
                  period
                  at or about 11:00 a.m. (London time) on the relevant Interest Payment
                  Date;

              

      

       

      “Loan”
        means the aggregate principal amount owing to the Lenders under this Agreement
        at any relevant time;

       

      “Loan
        Tranches” means collectively the KEXIM Tranche and the Commercial
        Lenders Tranche and individually means either of them;

       

      “Majority
        Lenders” means, at any relevant time, either (a) if there are only two
        Lenders, both Lenders or (b) if there are more than two Lenders, KEXIM and
        Calyon (provided in each case that it is still a Lender) together with the
        other
        Commercial Lenders (i) the aggregate of whose Contributions (when added to
        the
        Contributions of KEXIM and Calyon, provided in each case that it is still
        a
        Lender) exceeds seventy-five per cent. (75%) of the Loan or (ii) if no principal
        amounts are outstanding under this Agreement, the aggregate of whose Commitments
        (when added to the Commitments of KEXIM and Calyon, provided in each case
        that
        it is still a Lender) exceeds seventy-five per cent. (75%) of the Total
        Commitments;

       

      “Manager’s
        Undertaking” in relation to a Mortgaged Ship, means an undertaking
        executed or, as the context may require, to be executed by the manager (other
        than any manager which is a Subsidiary of the Teekay Guarantor) of such
        Mortgaged Ship under an Approved Management Agreement in favour of the Security
        Trustee in respect of the subordination of such manager’s rights over such
        Mortgaged Ship in favour of the rights of the Finance Parties over such
        Mortgaged Ship in a form to be agreed between the Facility Agent (acting
        on the
        instructions of the Majority Lenders) and the Borrowers at the applicable
        time
        and “Manager’s Undertakings” means any or all of
        them;

       

      “Material
        Adverse Effect” means a material adverse effect, as determined by the
        Facility Agent (acting on the instructions of the Majority Lenders) on any
        or
        all of the following:

       

      
        	
                (a)  

              	
                the
                  ability of any of the Security Parties to meet their respective
                  obligations to the Finance Parties under the Security Documents
                  to which
                  they are a party;

              

      

       

      
        	
                (b)  

              	
                the
                  value and effectiveness of the security provided to the Security
                  Trustee
                  under the Security Documents (including, without limitation, the
                  Mortgages); and/or

              

      

       

      
        	
                (c)  

              	
                the
                  business, assets, operations, property or financial condition of
                  any of
                  the Borrowers or the Guarantors;

              

      

       

      “Maximum
        Ship Tranche Amount” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, one hundred and fifty-five million,
                  seven
                  hundred and one thousand, eight hundred and sixty-five Dollars
                  ($155,701,865); or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, one hundred and fifty-six million, thirty
                  three
                  thousand, five hundred and fifty-three Dollars ($156,033,553);
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, one hundred and fifty-six million, three
                  hundred and seventy-two thousand, six hundred and six Dollars
                  ($156,372,606);

              

      

       

      “Mortgage”
        means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Mortgage;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Mortgage;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240
                  Mortgage,

              

      

       

      and
        “Mortgages” means any or all of them;

       

      “Mortgaged
        Ship” means, at any relevant time, any Ship which is at such time
        subject to a Mortgage and a Ship shall for the purposes of this Agreement
        be
        deemed to be a Mortgaged Ship as from the date that the Mortgage of that
        Ship
        shall have been executed and registered in accordance with this Agreement
        until
        whichever shall be the earlier of (a) the payment in full of the amount required
        to be paid pursuant to clause 4.4 following the sale or Total Loss of such
        Ship and (b) the date on which all moneys owing under the Security Documents
        have been repaid in full;

       

      “Mortgage
        Transfer” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Mortgage Transfer;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Mortgage Transfer;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240 Mortgage
                  Transfer,

              

      

       

      and
        “Mortgage Transfers” means any or all of them;

       

      “New
        Lender” has the meaning ascribed to it in
        clause 15.3;

       

      “Novation
        Agreement” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Novation Agreement;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Novation Agreement;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240 Novation
                  Agreement,

              

      

       

      and
        “Novation Agreements” means any or all of them.

       

      “Operator”
        means any person who is from time to time during the Security Period concerned
        in the operation of a Ship and falls within the definition of
“Company” set out in rule 1.1.2 of the ISM Code;

       

      “Operating
        Account” means the Dollar account of the Lessee opened or (as the
        context may require) to be opened by the Lessee with the Operating Account
        Bank
        designated “Teekay Nakilat Limited - Operating Account” and with account number
        00 224 953 088 and into which all Earnings in respect of the 2238 Ship, the
        2239
        Ship and the 2240 Ship are to be paid and includes any sub-account thereof
        or
        time deposit account constituted by moneys originally held on the Operating
        Account and any other account designated by the Facility Agent to be the
        Operating Account for the purposes of this Agreement and the Security Documents;
        

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “OperatingAccount
        Bank” means Calyon acting through its offices at 9 quai du Président
        Paul Doumer, 92920 Paris La Defense Cedex, France and includes any other
        bank
        designated in writing by the Facility Agent (at the request of the Borrowers
        and
        acting on the instructions of the Majority Lenders) to be an “Operating Account
        Bank” for the purposes of the Security Documents;

       

      “Original
        Date” means 15 December 2004;

       

      “Original
        Time Charter” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Original Time Charter;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Original Time Charter;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240 Original Time
                  Charter,

              

      

       

      and
        “Original Time Charters” means any or all of them;

       

      “Permitted
        Encumbrances” means (a) any Encumbrance created pursuant to the
        Security Documents and (b) Permitted Liens;

       

      “Permitted
        Liens” means any lien:

       

      
        	
                (a)  

              	
                on
                  a Ship (including, without limitation, for master’s, officer’s or crew’s
                  wages) outstanding in the ordinary course of trading for a period
                  not
                  exceeding forty five (45) days or, in the case of master’s, officer’s or
                  crew’s wages, thirty (30) days and the aggregate of any such liens are
                  not
                  to exceed at any time the Casualty Amount;
                  or

              

      

       

      
        	
                (b)  

              	
                for
                  salvage and any ship repairer’s or outfitter’s possessory lien for a sum
                  not (except with the prior written consent of the Facility Agent,
                  acting
                  on the instructions of the Majority Lenders) exceeding the Casualty
                  Amount,

              

      

       

      and
        which
        liens do not, in each such case in the reasonable opinion of the Facility
        Agent,
        involve the imminent likelihood of any arrest, forfeiture, seizure, sale
        or loss
        of the relevant Ship;

       

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

       

      “Proceeds
        Account Bank” means Calyon, London branch acting through its office at
        Broadwalk House, 5 Appold Street, London EC2A 2DA;

       

      “Proceeds
        Deed” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Proceeds Deed;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Proceeds Deed;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240 Proceeds
                  Deed,

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      and
        “Proceeds Deeds” means any or all of them;

       

      “QGTC”
        means Qatar Gas Transport Company Limited (Nakilat) of the State of
        Qatar;

       

      “QGTC
        Group” means QGTC and all its Subsidiaries;

       

      “QGTC
        Guarantee” means the guarantee executed by QGTC in favour of the
        Security Trustee in respect of all of the obligations of the Borrowers to
        the
        Finance Parties under this Agreement and the Security Documents;

       

      “Quotation
        Date” means, in relation to any period for which LIBOR is to be
        determined, the date which is two (2) Banking Days (in London) prior to the
        first day of the relevant period;

       

      “Refund
        Guarantee Notice and Acknowledgement” means, in relation to each Ship,
        the notice of assignment in respect of the Refund Guarantee(s) for that Ship
        to
        be given by the Lessor, the Lessee and the Replacement Purchaser and the
        acknowledgement of and consent to such notice of assignment to be given by
        the
        Refund Guarantor in the form scheduled to the relevant Lessee Assignment
        and the
        Replacement Purchaser Assignment for that Ship;

       

      “Refund
        Guarantee” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Refund Guarantee;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Refund Guarantee;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240 Refund
                  Guarantee,

              

      

       

      and
        “Refund Guarantees” means any or all of them;

       

      “Refund
        Guarantor” means KEXIM and shall include its successors in
        title;

       

      “Registry”
        means, in relation to a Ship, such registrar, commissioner or representative
        of
        the Flag State who is duly authorised and empowered to register the relevant
        Ship, the relevant Borrower’s title to such Ship and the relevant Mortgage under
        the laws and the flag of the relevant Flag State;

       

      “Regulatory
        Agency” means the Government Entity or other organisation in the Flag
        State which has been designated by the Government of the Flag State to implement
        and/or administer and/or enforce the provisions of the ISM Code or the ISPS
        Code;

       

      “Related
        Company” of a person means any Subsidiary of such person, any company
        or other entity of which such person is a Subsidiary and any Subsidiary of
        any
        such company or entity;

       

      “Relevant
        Jurisdiction” means, any jurisdiction in which or where any Security
        Party is incorporated, resident, domiciled, has a permanent establishment,
        carries on, or has a place of business or where any Mortgaged Ship is
        registered;

       

      “Relevant
        Insured Amount” means, in relation to a Mortgaged Ship as at any
        relevant date, an amount in Dollars equal to the outstanding amount of the
        Ship
        Tranche associated with such Mortgaged Ship as at that date;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Relevant
        Ship” means all or any of the Mortgaged Ships and any other vessel from
        time to time (whether before or after the date of this Agreement) owned,
        managed
        or crewed by, or chartered to, any Related Company of the Security
        Parties;

       

      “Repayment
        Date” means, in respect of each Ship Tranche, subject to
        clause 6.3, each of the forty-eight (48) dates during the Security Period
        falling at three (3) monthly intervals after the Delivery Date for the Ship
        associated with that Ship Tranche;

       

      “Replacement
        Purchaser” means Teekay Nakilat Replacement Purchaser L.L.C., a limited
        liability company formed in the Marshall Islands whose registered office
        is at
        Trust Company Complex, Ajeltake Road, Ajeltake Islands, Majuro, Marshall
        Islands
        MH 96960;

       

      “Replacement
        Purchaser Assignment” means in respect of each Ship, the deed of
        assignment executed or (as the context may require) to be executed by the
        Replacement Purchaser in favour of the Security Trustee in respect of the
        Shipbuilding Contract for that Ship as the same may be further novated by
        the
        Lessor in favour of the Replacement Purchaser pursuant to the Novation Agreement
        for that Ship and “Replacement Purchaser Assignments” means any
        or all of them;

       

      “Requisition
        Compensation” means, in relation to a Mortgaged Ship, all sums of money
        or other compensation from time to time payable during the Security Period
        by
        reason of the Compulsory Acquisition of such Ship;

       

      “Retention
        Account” means the Dollar account of the member of the Teekay Guarantor
        Group providing the cash collateral security referred to in clause 8.6.24
        opened or, as the context may require, to be opened with the Operating Account
        Bank and with such account number and designation as the Operating Account
        Bank
        shall advise at the time such account is opened and includes any sub-account
        thereof or time deposit account constituted by moneys originally held on
        the
        Retention Account and any other account designated by the Facility Agent
        to be
        the Retention Account for the purposes of this Agreement;

       

      “Retention
        Account Pledge” means the account pledge (acte de nantissement de
        compte bancaire) in respect of the Retention Account to be executed by the
        account holder of the Retention Account in favour of the Security Trustee
        in
        substantially the same form as the Account Pledge but having regard to the
        provisions of clause 8.6.24 dealing with the minimum cash balance that is
        required to be retained on the Retention Account;

       

      “RG
        Security Requirement” means, in respect of all the Mortgaged Ships, the
        aggregate amount in Dollars (as certified by the Facility Agent whose
        certificate shall, in the absence of manifest error, be conclusive and binding
        on the Borrowers and the Finance Parties) which is:

       

      
        	
                (a)  

              	
                during
                  the period commencing on and from the Delivery Date of the First
                  Ship and
                  ending on the date falling immediately before the twenty-fourth
                  (24th)
                  Repayment Date after the Delivery Date of the First Ship, one hundred
                  and
                  ten per cent (110%) of either the aggregate amount of the outstanding
                  Ship
                  Tranches in respect of all the Mortgaged Ships or, following delivery
                  of
                  all of the Ships, the Loan; and

              

      

       

      
        	
                (b)  

              	
                during
                  the period commencing on and from the twenty-fourth (24th) Repayment
                  Date
                  after the Delivery Date of the First Ship and ending on the date
                  falling
                  on the last day of the Security Period, one hundred and twenty
                  per cent
                  (120%) of the Loan;

              

      

       

      “RG
        Security Value” means, in respect of the Mortgaged Ships, the amount in
        Dollars (as certified by the Facility Agent whose certificate shall, in the
        absence of manifest error, be conclusive and binding on the Borrowers and
        the
        Finance Parties) which, at any relevant time, is the aggregate of (a) the
        aggregate market value of each of the Mortgaged Ships, (taking into account
        the
        value of the relevant Time Charter for each of the Mortgaged Ships) as most
        recently determined in accordance with clause 8.2.2 and (b) the market
        value of any additional security for the time being actually provided to
        the
        Lenders pursuant to clause 8.2, as most recently determined in accordance
        with clause 8.2.5;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “RG
        Value Principles” has the meaning given to it in
        clause 8.2.2;

       

      “Second
        Instalment” means, in relation to each Shipbuilding Contract (and
        ignoring for this purpose the payment arrangements in respect of the Initial
        Instalment under the Novation Agreement for that Shipbuilding Contract),
        the
        second instalment of the relevant Contract Price payable by the Lessor to
        the
        Builder under Article 2.3 of such Shipbuilding Contract and described
        therein as the “Second Instalment”;

       

      “Security
        Documents” means this Agreement, the Supplemental Agreement, the
        Mortgages (including the Mortgage Transfers), the Lessor Assignments, the
        Lessee
        Assignments, the Account Pledge, the Retention Account Pledge, the Share
        Pledges, the Agency Agreement, the Guarantees, the Fee Letters, the Lessor
        Parent Support Letters, the Proceeds Deeds, each Refund Guarantee Notice
        and
        Acknowledgement, each Shipbuilding Contract Notice and Acknowledgement, the
        Consent and Agreements, any Manager’s Undertakings, the Replacement Purchaser
        Assignments, any Standby Security Documents and any other documents as may
        have
        been or shall from time to time after the date of this Agreement be executed
        to
        guarantee and/or secure all or any part of the Loan, interest thereon and
        other
        moneys from time to time owing by the Borrowers pursuant to this Agreement
        (whether or not any such document also secures moneys from time to time owing
        pursuant to any other document or agreement);

       

      “Security
        Party” means the Borrowers, the Guarantors, the Lessee, the Supervisor,
        the Shareholder, the Replacement Purchaser and any other person who may at
        any
        time be a party to any of the Security Documents (other than the Finance
        Parties, the Lessor, the Time Charterer, the Builder, the Refund Guarantor
        and
        any manager of a Mortgaged Ship who is not a member of the Teekay Guarantor
        Group);

       

      “Security
        Period” means the period commencing on the date of this Agreement and
        terminating upon payment of all moneys payable under the Security
        Documents;

       

      “Security
        Requirement” means, in respect of all the Mortgaged Ships, the
        aggregate amount in Dollars (as certified by the Facility Agent whose
        certificate shall, in the absence of manifest error, be conclusive and binding
        on the Borrowers and the Finance Parties) which is:

       

      
        	
                (a)  

              	
                during
                  the period commencing on and from the Delivery Date of the First
                  Ship and
                  ending on the date falling immediately before the twenty-fourth
                  (24th)
                  Repayment Date after the Delivery Date of the First Ship, one hundred
                  and
                  five per cent (105%) of either the aggregate amount of the outstanding
                  Ship Tranches in respect of all the Mortgaged Ships or, following
                  delivery
                  of all of the Ships, the Loan; and

              

      

       

      
        	
                (b)  

              	
                during
                  the period commencing on and from the twenty-fourth (24th) Repayment
                  Date
                  after the Delivery Date of the First Ship and ending on the date
                  falling
                  on the last day of the Security Period, one hundred and ten per
                  cent
                  (110%) of the Loan;

              

      

       

      “Security
        Trustee” means Calyon acting through its offices at 9 quai du Président
        Paul Doumer, 92920 Paris La Defense Cedex, France (or of such other address
        as
        may last have been notified to the other parties in this Agreement pursuant
        to
        clause 17.1.3) and its successor in title or such other person as may be
        appointed security agent and trustee for the Finance Parties pursuant to
        the
        Proceeds Deeds;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Security
        Value” means, in respect of the Mortgaged Ships, the amount in Dollars
        (as certified by the Facility Agent whose certificate shall, in the absence
        of
        manifest error, be conclusive and binding on the Borrowers and the Finance
        Parties) which, at any relevant time, is the aggregate of (a) the aggregate
        market value of the Mortgaged Ships (but shall not take into account the
        value
        of the relevant Time Charter for each of the Mortgaged Ships) as most recently
        determined in accordance with clause 8.2.2 and (b) the market value of any
        additional security for the time being actually provided to the Lenders pursuant
        to clause 8.2, as most recently determined in accordance with
        clause 8.2.5;

       

      “Share
        Pledge” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Borrower, the 2238 Share Pledge;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Borrower, the 2239 Share Pledge;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Borrower, the 2240 Share Pledge;
                  or

              

      

       

      
        	
                (d)  

              	
                in
                  relation to the Lessee, the Lessee Share
                  Charge,

              

      

       

      and
        “Share Pledges” means any or all of them;

       

      “Shareholder”
        means Teekay Nakilat Corporation of Trust Company Complex, Ajeltake Island,
        Ajeltake Road, Majuro, Marshall Islands MH 96960 and includes its successors
        in
        title;

       

      “Shipbuilding
        Contract” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Shipbuilding Contract;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Shipbuilding Contract;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240 Shipbuilding
                  Contract,

              

      

       

      and
        “Shipbuilding Contracts” mean all or any of them;

       

      “Shipbuilding
        Contract Notice and Acknowledgement” means, in relation to each Ship,
        the notice of assignment in respect of the Shipbuilding Contract for that
        Ship
        to be given by the Lessor, the Lessee and the Replacement Purchaser and the
        acknowledgement of and consent to such notice of assignment to be given by
        the
        Builder in the form scheduled to the relevant Lessee Assignment and Replacement
        Purchaser Assignment for that Ship;

       

      “Shipbuilding
        ContractProtocol of Delivery and Acceptance” means, in
        respect of each Ship, the protocol of delivery and acceptance to be signed
        by or
        on behalf of the Builder and the Lessor evidencing the delivery and acceptance
        of that Ship pursuant to the relevant Shipbuilding Contract, such protocol
        to be
        substantially in the form of Appendix B to that Shipbuilding
        Contract;

       

      “Ships”
        means each of the ships listed in Schedule 2 and “Ship”
means any of them;

       

      “Ship
        Tranche” means, in relation to each Ship, the aggregate of the
        Commitments of the Lenders in respect of such Ship or, if any part of such
        Commitments have been advanced, the 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      aggregate
        of the remaining Commitments (if any) and the Contributions made by the Lenders
        in respect of such Ship, being a maximum amount of the lower of: (a) the
        relevant Maximum Ship Tranche Amount for that Ship and (b) eighty per cent.
        (80%) of the Vessel Cost of that Ship (after having taken into account any
        agreed variations therein and any deductions from any Delivery Instalment
        for
        that Ship) or, as the context may require, the principal amount owing to
        the
        Lenders constituted by the Contributions made by the Lenders in respect of
        such
        Ship at any relevant time and “Ship Tranches” means all of such
        Ship Tranches collectively;

       

      “Ship
        Tranche Commitment” means, in relation to a Ship Tranche, the aggregate
        of each Lender’s Commitment for such Ship Tranche, in each case, as cancelled or
        reduced pursuant to any relevant term of this Agreement;

       

      “Ship
        Tranche Contribution” means, in relation to a Ship Tranche, the
        aggregate of each Lender’s Contribution to such Ship Tranche;

       

      “SMC”
        means a safety management certificate issued in respect of a Ship in accordance
        with rule 13 of the ISM Code;

       

      “Standby
        Documents” in relation to the Ships has the meaning given to it in the
        Proceeds Deeds;

       

      “Standby
        Mortgage” in relation to the Ships has the meaning given to it in the
        Proceeds Deeds;

       

      “Standby
        Purchaser” has the meaning given to that expression in the Proceeds
        Deeds;

       

      “Standby
        Security Documents” in relation to the Ships has the
        meaning given to it in the Proceeds Deeds;

       

      “Subsequent
        Instalments” means, in relation to each Shipbuilding Contract, the
        Second Instalment, the Third Instalment, the Fourth Instalment and the Delivery
        Instalment in respect of that Shipbuilding Contract and “Subsequent
        Instalment” means any of them;

       

      “Subsidiary”
        of a person means any company or entity directly or indirectly controlled
        by
        such person, and for this purpose “control” means either the
        ownership of more than fifty per cent. (50%) of the voting share capital
        (or
        equivalent rights of ownership) of such company or entity or the power to
        direct
        its policies and management, whether by contract or otherwise but for the
        purposes of clause 10.1.5 only, Teekay LNG Partners
        L.P. shall not be considered a “Subsidiary” until it becomes a Security
        Party;

       

      “Substitution
        Certificate” means a certificate substantially in the terms of
        Schedule 5 (or in such other form as the Lenders may approve or
        require);

       

      “Supervision
        Agreement” means, in respect of each Ship, the supervision agreement in
        respect of the construction of that Ship executed or (as the context may
        require) to be executed by the Lessor and the Supervisor and
“Supervision Agreements” means any or all of them;

       

      “Supervisor”
        means Teekay Shipping Limited, a company incorporated in the Bahamas whose
        registered office is at TK House, Bayside Executive Park, West Bay Street
        and
        Blake Road, PO Box AP-54212, Nassau, The Bahamas;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Supplemental
        Agreement” means the supplemental agreement dated [●] December 2005 and
        entered into between the Borrowers, the Arrangers, the Facility Agent, the
        Security Trustee, KEXIM and the Commercial Lenders;

       

      “Taxes”
        includes all present and future taxes, levies, imposts, duties, fees or charges
        of whatever nature together with interest thereon and penalties in respect
        thereof and “Taxation” and “Tax” shall be
        construed accordingly;

       

      “Teekay
        Charterer” means the Shareholder in its capacity as the original
        bareboat charterer in respect of the Ships;

       

      “Teekay
        Guarantee” means the guarantee executed by the Teekay Guarantor in
        favour of the Security Trustee in respect of all of the obligations of the
        Borrowers to the Finance Parties under this Agreement and the Security
        Documents;

       

      “Teekay
        Guarantor” means Teekay Shipping Corporation of Trust Company Complex,
        Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960;

       

      “Teekay
        Guarantor Group” means the Teekay Guarantor and all its
        Subsidiaries;

       

      “Termination
        Date” means, in respect of each Ship Tranche, the earliest of (a) the
        date on which the Ship Tranche Commitments for such Ship Tranche are reduced
        to
        zero by any of the terms of this Agreement, (b) the date on which the Delivery
        Instalment under the relevant Shipbuilding Contract associated with such
        Ship
        Tranche is paid to the Builder, (c) the date on which the Shipbuilding Contract
        associated with such Ship Tranche is cancelled, rescinded or terminated by
        either party in accordance with its terms and (d) the relevant End of Funding
        Date for the Ship in respect of that Ship Tranche;

       

      “Third
        Instalment” means, in relation to each Shipbuilding Contract, the third
        instalment of the relevant Contract Price payable by the Lessor to the Builder
        under Article 2.3 of such Shipbuilding Contract and described therein as
        the “Third Instalment”;

       

      “Time
        Charter” means:

       

      (a)              in
        relation to the 2238 Ship, the 2238 Time Charter; or

       

      (b)              in
        relation to the 2239 Ship, the 2239 Time Charter; or

       

      (c)              in
        relation to the 2240 Ship, the 2240 Time Charter,

       

      and
        “Time Charters” means any or all of them;

       

      “Time
        Charterer” means Ras Laffan Liquefied Natural Gas Company Limited (II)
        of PO Box 24200, Al-Aad Street, Area No. 60, West Bay, Doha, State of
        Qatar;

       

      “Time
        Charter Novation Agreement” means:

       

      
        	
                (a)  

              	
                in
                  relation to the 2238 Ship, the 2238 Time Charter Novation Agreement;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the 2239 Ship, the 2239 Time Charter Novation Agreement;
                  or

              

      

       

      
        	
                (c)  

              	
                in
                  relation to the 2240 Ship, the 2240 Time Charter Novation
                  Agreement,

              

      

       

      and
        “Time Charter Novation Agreements” means any or all of
        them;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Time
        CharterProtocol of Delivery and Acceptance” means, in
        respect of each Ship, each protocol of delivery and acceptance to be signed
        by
        or on behalf of the Lessee and the Time Charterer evidencing the delivery
        and
        acceptance of that Ship pursuant to the relevant Time Charter, such protocol
        to
        be substantially in the form of Schedule II to that Time
        Charter;

       

      “Total
        Commitments” means, at any relevant time, the total of the Commitments
        of all the Lenders at such time;

       

      “Total
        Loss” in relation to a Ship, means:

       

      
        	
                (a)  

              	
                an
                  actual, constructive, compromised or arranged total loss of such
                  Ship;
                  or

              

      

       

      
        	
                (b)  

              	
                the
                  Compulsory Acquisition of such Ship;
                  or

              

      

       

      
        	
                (c)  

              	
                the
                  hijacking, theft, condemnation, capture, seizure, arrest, detention
                  or
                  confiscation of such Ship (other than where the same amounts to
                  the
                  Compulsory Acquisition of such Ship) by any Government Entity,
                  or by
                  persons acting or purporting to act on behalf of any Government
                  Entity,
                  unless such Ship be released and restored to the Lessee or the
                  Lessor from
                  such hijacking, theft, condemnation, capture, seizure, arrest,
                  detention
                  or confiscation within sixty (60) days after the occurrence thereof;
                  or

              

      

       

      
        	
                (d)  

              	
                the
                  expiry of one (1) year (or such longer period as the Lessor, the
                  Lessee
                  and the Security Trustee may agree) after the Ship shall have been
                  requisitioned for hire by a Government Entity or other competent
                  authority, whether de jure or de
                  facto;

              

      

       

      “Total
        Loss Reduction Date” has the meaning given to it in
        clause 4.4.3;

       

      “Transaction
        Documents” means, collectively, the Leases, the Lessor Assignments, the
        Security Documents, the Shipbuilding Contracts, the Novation Agreements,
        the
        Supervision Agreements, the Refund Guarantees, the Time Charters, the Time
        Charter Novation Agreements, the Deposit Agreements, any Approved Management
        Agreements and any Standby Documents; and

       

      “Vessel
        Cost” means, in respect of each Ship, the aggregate of:

       

                   

      
        	 	        
                (a) 	
                 the
                  Contract Price for that Ship; and

                 

              

        	
                 

              	
                        
                  (b)

              	
                the
                  additional costs incurred by the Lessor or, as the case may be,
                  the
                  Supervisor in relation to the construction of that Ship as are
                  included in
                  the list of qualifying expenditure forming the annex to the term
                  sheet for
                  the Loan addressed by the Facility Agent and KEXIM to and accepted
                  by the
                  Teekay Guarantor on 8 June 2004 together with such other additional
                  costs,
                  together with supporting invoices for such additional costs, as
                  may be
                  approved by the Facility Agent acting on the instructions of the
                  Majority
                  Lenders.

              

      

       

      
        	
                1.3  

              	
                Headings

              

      

       

      Clause headings
        and the table of contents are inserted for convenience of reference only
        and
        shall be ignored in the interpretation of this Agreement.

       

      
        	
                1.4  

              	
                Construction
                  of certain terms

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      In
        this
        Agreement, unless the context otherwise requires:

       

      
        	
                1.4.1  

              	
                references
                  to any person includes such person’s successors in title and permitted
                  assignees and transferees;

              

      

       

      
        	
                1.4.2  

              	
                references
                  to clauses and schedules are to be construed as references to
                  clauses of, and schedules to, this Agreement and references to
                  this Agreement include its
                  schedules;

              

      

       

      
        	
                1.4.3  

              	
                references
                  to (or to any specified provision of) this Agreement or any other
                  document
                  shall be construed as references to this Agreement, that provision
                  or that
                  document as in force for the time being and as amended in accordance
                  with
                  terms thereof, or, as the case may be, with the agreement of the
                  relevant
                  parties;

              

      

       

      
        	
                1.4.4  

              	
                references
                  to a “regulation” include any present or future
                  regulation, rule, directive, requirement, request or guideline
                  (whether or
                  not having the force of law) of any agency, authority, central
                  bank or
                  government department or any self-regulatory or other national
                  or
                  supra-national authority;

              

      

       

      
        	
                1.4.5  

              	
                references
                  to a “month” mean a period beginning in one calendar
                  month and ending in the next calendar month on the day numerically
                  corresponding to the day of the calendar month on which it started,
                  provided that (a) if the period started on the last Banking Day
                  in a
                  calendar month or if there is no such numerically corresponding
                  day, it
                  shall end on the last Banking Day in such next calendar month,
                  (b) if such
                  numerically corresponding day is not a Banking Day, the period
                  shall end
                  on the next following Banking Day in the same calendar month but
                  if there
                  is no such Banking Day it shall end on the preceding Banking Day
                  and
                  “months” and “monthly” shall be construed accordingly and (c) references
                  to a calendar shall be construed as references to the Gregorian
                  calendar;

              

      

       

      
        	
                1.4.6  

              	
                words
                  importing the plural shall include the singular and vice
                  versa;

              

      

       

      
        	
                1.4.7  

              	
                references
                  to a time of day are to Paris time unless otherwise
                  specified;

              

      

       

      
        	
                1.4.8  

              	
                references
                  to a person shall be construed as references to an individual,
                  firm,
                  company, corporation, unincorporated body of persons or any Government
                  Entity;

              

      

       

      
        	
                1.4.9  

              	
                references
                  to a “guarantee” include references to an indemnity or
                  other assurance against financial loss including, without limitation,
                  an
                  obligation to purchase assets or services as a consequence of a
                  default by
                  any other person to pay any Indebtedness and “guaranteed”
                  shall be construed accordingly;

              

      

       

      
        	
                1.4.10  

              	
                references
                  to “assets” include all or part of any business,
                  undertaking, real property, personal property, uncalled capital
                  and any
                  rights (whether actual or contingent, present or future) to receive,
                  or
                  require delivery of, any of the
                  foregoing;

              

      

       

      
        	
                1.4.11  

              	
                references
                  to a document being “in the agreed form” shall mean a
                  document in a form agreed by (and for the purposes of identification
                  initialled by and on behalf of) the Borrowers, each relevant Security
                  Party which is a party thereto and the Facility Agent;
                  and

              

      

       

      
        	
                1.4.12  

              	
                references
                  to any enactment shall be deemed to include references to such
                  enactment
                  as re-enacted, amended or extended.

              

      

       

      
        	
                1.5  

              	
                Insurance
                  terms

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      In
        this
        Agreement, unless the context otherwise requires:

       

      
        	
                (a)  

              	
                “protection
                  and indemnity risks” means the usual risks (including oil
                  pollution cover) covered by a protection and indemnity association
                  of the
                  International Group of Protection and Indemnity Associations (including,
                  without limitation, the proportion (if any) of any sums payable
                  to any
                  other person or persons in case of collision which are not recoverable
                  under the hull and machinery policies by reason of the incorporation
                  therein of Clause 8 of the Institute Time Clauses (Hulls)
                  1/11/95 or the Institute Amended Running Down Clause (1/10/71) or any
                  equivalent provision); and

              

      

       

      
        	
                (b)  

              	
                “war
                  risks” includes those risks covered by the standard form of
                  English marine policy with Institute War and Strikes Clauses Hulls -
                  Time (1/11/95) attached or similar
                  cover.

              

      

       

      
        	
                1.6  

              	
                Obligations
                  several

              

      

       

      The
        obligations of each Lender under this Agreement are several; the failure
        of any
        Lender to perform such obligations shall not relieve any other Finance Party
        or
        the Borrowers of any of their respective obligations or liabilities under
        this
        Agreement nor shall the Facility Agent or the Arranger be responsible for
        the
        obligations of any Lender (except for their own respective obligations, if
        any,
        as a Lender) nor shall any Lender be responsible for the obligations of any
        other Lender under this Agreement.

       

      
        	
                1.7  

              	
                Interests
                  several

              

      

       

      Notwithstanding
        any other term of this Agreement (but without prejudice to the provisions
        of
        this Agreement relating to or requiring action by the Majority Lenders) the
        interests of the Finance Parties are several and the amount due to the Facility
        Agent or the Arranger (for its own account) and to each Lender is a separate
        and
        independent debt.  Save as provided in the Proceeds Deed and the
        Agency Agreement, the Facility Agent, the Arranger and each Lender shall
        have
        the right to protect and enforce its rights arising out of this Agreement
        and it
        shall not be necessary for another Finance Party to be joined as an additional
        party in any proceedings for this purpose.

       

      
        	
                2  

              	
                The
                  Commitments and the Ship
                  Tranches

              

      

       

      
        	
                2.1  

              	
                Amount

              

      

       

      The
        Lenders, relying upon each of the representations and warranties in
        clause 7 agree to lend to the Borrowers, jointly and severally, upon and
        subject to the terms of this Agreement the aggregate principal amount of
        up to
        the lesser of (a) four hundred and sixty-eight million, one hundred and eight
        thousand and twenty-three Dollars ($468,108,023) and (b) eighty per cent.
        (80%)
        of the aggregate of the Vessel Cost (after having taken into account any
        agreed
        variations therein and any deductions from any Delivery Instalment for each
        Ship) of each of the Ships.  The obligation of each Lender under this
        Agreement shall, subject to clause 2.5, be to contribute that proportion of
        each Advance which, as at the Drawdown Date of such Advance, its Ship Tranche
        Commitment in the Ship Tranche in respect of which such Advance is to be
        made,
        bears to the Commitments to such Ship Tranche of all Lenders.

       

      
        	
                2.2  

              	
                Drawdown

              

      

       

      Subject
        to the terms and conditions of this Agreement, an Advance shall be made
        available to the Borrowers following receipt by the Facility Agent from the
        Borrowers of a Drawdown 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      Notice
        not later than 10:00 a.m. on the fourth (4th) Banking Day before the proposed
        Drawdown Date.  A Drawdown Notice shall be effective on actual receipt
        by the Facility Agent and, once given, shall, subject as provided in
        clause 3.5.1, be irrevocable.

       

      
        	
                2.3  

              	
                Ship
                  Tranches

              

      

       

      The
        Commitments of the Lenders are calculated, and limited, by reference to each
        Ship Tranche. There is a separate Ship Tranche for each Ship. Commitments
        to one
        Ship Tranche are unavailable for Advances in respect of any other Ship Tranche.
        Any Commitments to a Ship Tranche that are unused at the Termination Date
        for
        such Ship Tranche will become unavailable and deemed to be automatically
        cancelled.

       

      
        	
                2.4  

              	
                Advances

              

      

       

      Each
        Advance shall be made and exists as part of a Ship Tranche. Each Advance
        may
        only be made on a Banking Day falling within the relevant Drawdown Period
        for
        the Ship Tranche to which it relates. An Advance shall be requested solely
        for
        the purpose of funding the required Deposit Payment that is to be paid into
        the
        Deposit Account in connection with the security requirements of the Lessor
        under
        the relevant Lease in respect of the payment by the Lessor of the Initial
        Instalment or a Subsequent Instalment or, in the case of the Initial Instalment
        or a Subsequent Instalment that has been paid by the Lessor prior to the
        date of
        the first Drawdown Notice issued under this Agreement, in refinancing the
        relevant Borrower’s funding of the required Deposit Payment or Deposit Payments
        made at or around the time of the relevant Initial Instalment or Subsequent
        Instalment.

       

      
        	
                2.5  

              	
                Limitation
                  on the number and amount of Advances; variations in proportion
                  of funding
                  by Lenders

              

      

       

      No
        more
        than four (4) Advances may be requested in respect of each Ship
        Tranche.  The aggregate amount of a Ship Tranche at any time shall not
        exceed the lesser of (a) eighty per cent. (80%) of the Vessel Cost for the
        relevant Ship and (b) the relevant Maximum Ship Tranche Amount but, subject
        to
        this principle:

       

      
        	
                2.5.1  

              	
                each
                  Advance (save for the Delivery Advances) in respect of each Ship
                  Tranche
                  shall not exceed the amount of the Subsequent Instalment in respect
                  of
                  which it is requested (or, in the case of any Initial Instalment,
                  the
                  amount of any Subsequent Instalment comprised within that Initial
                  Instalment) and;

              

      

       

      
        	
                2.5.2  

              	
                each
                  Delivery Advance in respect of each Ship Tranche shall not exceed
                  the
                  aggregate sum of the amount of the Delivery Instalment in respect
                  of which
                  it is requested and any additional costs described in paragraph
                  (b) of the
                  definition of “Vessel Cost” as at the date of issue of
                  the Drawdown Notice in respect of that Delivery
                  Advance.

              

      

       

      The
        Lenders shall contribute to each Advance in a proportion that reflects a
        contribution by KEXIM of sixty-four per cent. (64%) of the relevant Advance
        and
        a contribution by the Commercial Lenders of thirty-six per cent. (36%) of
        the
        relevant Advance, with the intention that upon the making of each such Advance
        each Lender shall have contributed to such Ship Tranche in the proportion
        that
        its Ship Tranche Commitment bears to the Commitments of all Lenders to such
        Ship
        Tranche.

       

      An
        indicative schedule of the Advances to be made for each Ship Tranche based
        on the provisions of this clause 2.5 is set out in
        Schedule 7.

       

      
        	
                2.6  

              	
                Availability

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Upon
        receipt of a Drawdown Notice complying with the terms of this Agreement the
        Facility Agent shall notify each Lender thereof and of the date on which
        the
        relevant Advance is to be made and, subject to the provisions of clause 2.5
        and clause 9, on the Drawdown Date for the relevant Advance each of the
        Lenders shall make available to the Facility Agent its proportion of such
        Advance for payment by the Facility Agent in accordance with
        clause 6.2.

       

      
        	
                2.7  

              	
                KEXIM
                  Tranche and the Commercial Lenders
                  Tranche

              

      

       

      The
        Commitments of KEXIM and all Contributions to Advances made by KEXIM shall
        constitute and form part of the KEXIM Tranche. The Commitments of the Commercial
        Lenders and all Contributions to Advances made by the Commercial Lenders
        shall
        constitute and form part of the Commercial Lenders Tranche. Each Ship Tranche
        shall comprise a KEXIM Tranche and a Commercial Lenders Tranche in the
        proportion sixty-four/thirty-six (64/36).

       

      
        	
                2.8  

              	
                Application
                  of proceeds

              

      

       

      Without
        prejudice to the Borrowers’ obligations under clause 8.1.3, none of the
        Finance Parties shall have any responsibility for the application of the
        proceeds of any Advance by the Borrowers.

       

      
        	
                3  

              	
                Interest and interest periods

              

      

       

      
        	
                3.1  

              	
                Normal
                  interest rate

              

      

       

      The
        Borrowers shall, subject to clause 6.3, pay interest on each Advance, Ship
        Tranche or the Loan in respect of each Interest Period relating thereto on
        each
        Interest Payment Date as follows:

       

      
        	
                3.1.1  

              	
                as
                  regards the part of each Advance, Ship Tranche or Loan that is
                  part of the
                  KEXIM Tranche, at the applicable KEXIM Rate;
                  or

              

      

       

      
        	
                3.1.2  

              	
                as
                  regards the part of each Advance, Ship Tranche or Loan that is
                  part of the
                  Commercial Lenders Tranche, at the rate per annum that is the aggregate
                  of
                  (a) the Commercial Tranche Margin and (b) LIBOR for such Interest
                  Period,

              

      

       

      provided
        however that:

       

      
        	
                (a)  

              	
                if
                  the Drawdown Notice(s) for the First Advance is not received by
                  the
                  Facility Agent in time to allow the Commercial Lenders to fix funds
                  equal
                  to their Contributions to the First Advance at LIBOR on the Quotation
                  Date
                  before the proposed Drawdown Date for such First Advance then LIBOR
                  for
                  the first Interest Period of such Advances shall be the weighted
                  average
                  of the rates quoted by the Commercial Lenders to the Facility Agent
                  for
                  such Interest Period; and

              

      

       

      
        	
                (b)  

              	
                in
                  the case of any Interest Period of six (6) months, accrued interest
                  on the
                  relevant Advance, Ship Tranche or Loan for such Interest Period
                  shall,
                  subject to clause 6.3, be paid on the Interest Payment Date falling
                  three (3) months after the commencement of that Interest Period
                  as well as
                  on the Interest Payment Date at the end of such Interest
                  Period.

              

      

       

      
        	
                3.2  

              	
                Determination
                  of Interest Periods

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                3.2.1  

              	
                The
                  Borrowers may by notice received by the Facility Agent not later
                  than
                  10.00 a.m. on the fourth (4th) Banking Day before the beginning
                  of each
                  Interest Period for the Loan or (as appropriate) in a Drawdown
                  Notice
                  relating to an Advance and in each case which is in respect of
                  the
                  Commercial Lenders Tranche, select a duration of three (3) or six
                  (6)
                  months for such Interest Period. The Interest Period in respect
                  of the
                  Loan or (as appropriate) an Advance which is in respect of the
                  KEXIM
                  Tranche shall, unless otherwise provided in clause 3.2.3, have a
                  duration of three (3) months.  Interest Periods shall be
                  determined separately for each Ship Tranche and therefore while
                  Interest
                  Periods for separate Advances within a Ship Tranche shall be consolidated
                  in accordance with this clause 3, Interest Periods for different Ship
                  Tranches will not automatically be consolidated with each
                  other.

              

      

       

      
        	
                3.2.2  

              	
                In
                  this clause 3.2.2, all references to a Ship Tranche shall be a
                  reference to that part of such Ship Tranche which is constituted
                  by part
                  or, as the case may be, all of the Commercial Lenders
                  Tranche.

              

      

       

      Each
        Interest Period which is in respect of a Ship Tranche shall, subject to the
        provisions of clause 6.3, be of the duration selected by the Borrowers in
        accordance with clause 3.2.1 but so that:

       

      
        	
                (a)  

              	
                the
                  initial Interest Period in respect of the First Advance under that
                  Ship
                  Tranche shall commence on the relevant Drawdown Date for that First
                  Advance and shall end on the expiry of the Interest Period selected
                  by the
                  Borrowers for that First Advance pursuant to
                  clause 3.2.1;

              

      

       

      
        	
                (b)  

              	
                the
                  first Interest Period in respect of each Advance under that Ship
                  Tranche
                  (other than the First Advance under that Ship Tranche) shall commence
                  on
                  the Drawdown Date for such Advance and shall end on the last day
                  of the
                  Interest Period for the Ship Tranche which is applicable to that
                  Advance
                  and which is current on such Drawdown Date and, upon expiry of
                  the
                  Interest Period for such Advance, such Advance shall be consolidated
                  into
                  and shall form part of that Ship Tranche for the purpose of the
                  selection
                  or determination of all future Interest
                  Periods;

              

      

       

      
        	
                (c)  

              	
                each
                  subsequent Interest Period for each Ship Tranche shall commence
                  on the
                  expiry of the previous Interest Period for that Ship
                  Tranche;

              

      

       

      
        	
                (d)  

              	
                if
                  the Interest Period for a Ship Tranche does not end on, and shall
                  fall
                  after, the Delivery Date of the Ship associated with that Ship
                  Tranche
                  then:

              

      

       

      
        	
                (i)  

              	
                the
                  Interest Period for the Delivery Advance for that Ship Tranche
                  shall,
                  subject to clause 3.2.2(c), be of a duration referred to in
                  clause 3.2.1;

              

      

       

      
        	
                (ii)  

              	
                the
                  Interest Period in respect of the balance of that Ship Tranche
                  shall,
                  following the expiry of the Interest Period for that Ship Tranche
                  which
                  was current at the said Delivery Date, commence on the expiry date
                  of that
                  current Interest Period and shall end on the expiry of the first
                  Interest
                  Period in respect of the said Delivery Advance referred to in
                  sub-paragraph (i) above; and

              

      

       

      
        	
                (iii)  

              	
                on
                  the expiry of the first Interest Period for the Delivery Advance
                  for that
                  Ship Tranche, that Delivery Advance shall then be consolidated
                  within that
                  Ship Tranche and each future Interest Period for that Ship Tranche
                  shall
                  have a duration selected by the Borrowers pursuant to
                  clause 3.2.1;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (e)  

              	
                if
                  the Borrowers fail to select the duration of an Interest Period
                  in
                  accordance with the provisions of this clause 3.2, such Interest
                  Period shall, subject to the other provisions of this clause 3.2.2,
                  have a duration of three (3) months;
                  and

              

      

       

      
        	
                (f)  

              	
                after
                  the Delivery Date of a Ship and save as provided in
                  clause 3.2.2(e)(ii), each Interest Period for the relevant Ship
                  Tranche shall expire on a Repayment
                  Date.

              

      

       

      
        	
                3.2.3  

              	
                In
                  this clause 3.2.3, all references to a Ship Tranche shall be a
                  reference to that part of such Ship Tranche which is constituted
                  by part
                  or, as the case may be, all of the KEXIM
                  Tranche.

              

      

       

      Each
        Interest Period which is in respect of a Ship Tranche shall, subject to the
        provisions of clause 6.3, have the duration of three (3) months referred
        to in
        clause 3.2.1 but so that:

       

      
        	
                (a)  

              	
                the
                  initial Interest Period in respect of the First Advance under that
                  Ship
                  Tranche shall commence on the relevant Drawdown Date for that First
                  Advance and shall end on the expiry of the said three (3) month
                  period
                  referred to in clause 3.2.1;

              

      

       

      
        	
                (b)  

              	
                the
                  first Interest Period in respect of each Advance under that Ship
                  Tranche
                  (other than the First Advance under that Ship Tranche) shall commence
                  on
                  the Drawdown Date for such Advance and shall end on the last day
                  of the
                  Interest Period for the Ship Tranche which is applicable to that
                  Advance
                  and which is current on such Drawdown Date and, upon expiry of
                  that
                  Interest Period, such Advance shall be consolidated into and shall
                  form
                  part of that Ship Tranche for the purpose of the selection or
                  determination of all future Interest
                  Periods;

              

      

       

      
        	
                (c)  

              	
                each
                  subsequent Interest Period for each Ship Tranche shall commence
                  on the
                  expiry of the previous Interest Period for that Ship
                  Tranche;

              

      

       

      
        	
                (d)  

              	
                if
                  an Interest Period for a Ship Tranche does not end on, and would
                  otherwise
                  fall after, the Delivery Date of the Ship associated with that
                  Ship
                  Tranche (except otherwise pursuant to this sub-paragraph (e))
                  then:

              

      

       

      
        	
                (i)  

              	
                the
                  Interest Period then current in respect of that Ship Tranche at
                  the
                  Delivery Date for that Ship shall end on the Delivery Date for
                  that
                  Ship;

              

      

       

      
        	
                (ii)  

              	
                the
                  Interest Period for the Delivery Advance for that Ship Tranche
                  shall,
                  subject to clauses 3.2.3(c) and 3.2.3(f), be of a duration of three
                  (3) months as determined pursuant to clause 3.2.1;
                  and

              

      

       

      
        	
                (iii)  

              	
                on
                  the Delivery Date for the Ship associated with that Ship Tranche
                  the
                  Delivery Advance shall be consolidated within that Ship Tranche
                  and each
                  future Interest Period for that Ship Tranche shall, subject to
                  clause 3.2.3(f), have a duration of three (3) months as determined
                  pursuant to clause 3.2.1; and

              

      

       

      
        	
                (e)  

              	
                after
                  the Delivery Date of a Ship each Interest Period shall expire on
                  a
                  Repayment Date.

              

      

       

      
        	
                3.3  

              	
                Default
                  interest

              

      

       

      If
        the
        Borrowers fail to pay any sum (including, without limitation, any sum payable
        pursuant to this clause 3.3) on its due date for payment under any of the
        Security Documents, the Borrowers shall pay interest on such sum on demand
        from
        the due date up to the date of actual payment (as well after as before
        judgement) at a rate determined by the Facility Agent pursuant to this
        clause 3.3.  The period beginning on such due date and ending on
        such date of payment shall be divided into successive periods of not more
        than
        three (3) months as selected by the Facility Agent (after consultation with
        the
        Lenders so far as reasonably practicable in the circumstances) each of which
        (other than the first, which shall commence on such due date) shall commence
        on
        the last day of the preceding such period.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        rate
        of interest applicable to each unpaid sum and for each such period shall
        be the
        aggregate (as determined by the Facility Agent) of, as regards any such unpaid
        amount owing to the Commercial Lenders, the Facility Agent or the Arranger
        (a)
        two per cent. (2%) per annum, (b) the Commercial Tranche Margin and (c) LIBOR
        and as regards any such unpaid amount owing to KEXIM, (x) two per cent. (2%)
        per
        annum and (z) the applicable KEXIM Rate.

       

      If
        the
        unpaid sum is an amount of principal which shall have become due and payable,
        by
        reason of a declaration by the Facility Agent under clause 10.2.2 or a
        prepayment obligation arising pursuant to clauses 4.3, 8.2 or 12.1, prior
        to the next succeeding Interest Payment Date relating thereto, the first
        period
        selected by the Facility Agent shall end on such Interest Payment Date and
        interest shall be payable on such unpaid sum during such period at a rate
        of two
        per cent. (2%) above the rate applicable thereto immediately before it shall
        have become so due and payable.

       

      Interest
        under this clause 3.3 shall be due and payable on the last day of each
        period determined by the Facility Agent pursuant to this clause 3.3 or, if
        earlier, on the date on which the sum in respect of which such interest is
        accruing shall actually be paid.  If, for the reasons specified in
        clause 3.5.1 the Facility Agent is unable to determine a rate in accordance
        with the foregoing provisions of this clause 3.3, each Lender shall
        promptly notify the Facility Agent of the cost of funds to such Lender and
        interest on any sum not paid on its due date for payment shall be calculated
        for
        each Lender at a rate determined by the Facility Agent to be two per cent.
        (2%)
        per annum above, in the case of a Commercial Lender, the aggregate of the
        Commercial Tranche Margin and the cost of funds to such Commercial Lender
        or, in
        the case of KEXIM, the KEXIM Rate.

       

      
        	
                3.4  

              	
                Notification
                  of Interest Periods and interest
                  rate

              

      

       

      The
        Facility Agent shall notify the Borrowers and the Lenders promptly of the
        duration of each Interest Period or other period for the calculation of interest
        (or, as the case may be, default interest) and of each rate of interest
        determined by it under this clause 3.

       

      
        	
                3.5  

              	
                Market
                  disruption;
                  non-availability

              

      

       

      
        	
                3.5.1  

              	
                If
                  and whenever, at any time prior to the commencement of any Interest
                  Period:

              

      

       

      
        	
                (a)  

              	
                the
                  Facility Agent shall have determined (which determination shall,
                  in the
                  absence of manifest error, be conclusive), that adequate and fair
                  means do
                  not exist for ascertaining LIBOR during such Interest Period;
                  or

              

      

       

      
        	
                (b)  

              	
                the
                  Facility Agent shall have received notification from Commercial
                  Lenders
                  with Contributions aggregating not less than 66 2/3rds of the
                  Contributions of all the Commercial Lenders (or prior to the first
                  Drawdown Date, with Commitments aggregating not less than 66 2/3rds
                  of the
                  Commitments of all the Commercial Lenders) that deposits in Dollars
                  are
                  not available to such Commercial Lenders in the ordinary course
                  of
                  business in sufficient amounts to fund their Contributions for
                  such
                  Interest Period or that LIBOR does not accurately reflect the cost
                  to such
                  Commercial Lenders of obtaining such
                  deposits,

              

        	 	
                 

                 

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      the
        Facility Agent shall forthwith give notice (a “Determination
        Notice”) thereof to the Borrowers and to each of the
        Lenders.  A Determination Notice shall contain particulars of the
        relevant circumstances giving rise to its issue.  After the giving of
        any Determination Notice (and until the Facility Agent notifies the Borrowers
        that none of the circumstances specified in clause 3.5.1 continues to
        exist) the undrawn amount of the Commitments of the Commercial Lenders shall
        only be borrowed (and an Advance may only be requested) if a New Lender Basis
        has been agreed pursuant to clause 3.5.2.

       

      
        	
                3.5.2  

              	
                During
                  the period of ten (10) days after any Determination Notice has
                  been given
                  by the Facility Agent under clause 3.5.1, each Commercial Lender that
                  has notified the Facility Agent thereunder, shall certify to the
                  Facility
                  Agent an alternative basis (the “Alternative Basis”) for
                  making available or, as the case may be, maintaining its Contribution.
                  The
                  Alternative Basis may (without limitation) include alternative
                  interest
                  periods, alternative currencies or alternative rates of interest
                  but shall
                  include a margin above the cost of funds to such Commercial Lender
                  equivalent to the Commercial Tranche Margin. The Facility Agent
                  shall
                  calculate the arithmetic mean of each Alternative Basis provided
                  by the
                  Commercial Lenders (rounded upwards, if not already such a multiple,
                  to
                  the nearest whole multiple of one-sixteenth of one per cent) (the
                  “New Lender Basis”) and certify the same to the Borrowers
                  and each of the Commercial Lenders. The New Lender Basis so certified
                  shall be binding upon the Borrowers and the affected Commercial
                  Lenders
                  and shall take effect in accordance with its terms from the date
                  specified
                  in the Determination Notice until such time as the Facility Agent
                  notifies
                  the Borrowers that none of the circumstances specified in
                      clause 3.5.1 continues to exist whereupon the normal interest rate
                  fixing provisions for the Commercial Lenders Tranche shall
                  apply.

              

      

       

      
        	
                4  

              	
                Repayment
                  and prepayment

              

      

       

      
        	
                4.1  

              	
                Repayment

              

      

       

      
        	
                4.1.1  

              	
                The
                  Borrowers shall repay that part of each Ship Tranche that forms
                  part
                  of:

              

      

       

      
        	
                (a)  

              	
                the
                  Commercial Lenders Tranche in one instalment, such instalment to
                  be repaid
                  on the date falling on the Final Maturity Date of the Ship associated
                  with
                  such Ship Tranche (and being the final Repayment Date for that
                  Ship
                  Tranche); and

              

      

       

      
        	
                (b)  

              	
                the
                  KEXIM Tranche in forty-eight (48) equal instalments, one such instalment
                  to be repaid on each Repayment Date, commencing with a first instalment
                  on
                  the first Repayment Date following the Delivery Date of the Ship
                  associated with such Ship Tranche and ending with a final instalment
                  on
                  the forty-seventh Repayment Date
                  thereafter.

              

      

       

      Each
        instalment of that part of each Ship Tranche that forms part of the Commercial
        Lenders Tranche shall be such amount as appears in the column headed “Repayment
        Instalment - Commercial Lenders Tranche (Ship Tranche N°·)”
against
        the
        relevant Repayment Date as set out in Part A of Schedule 6. Each instalment
        of that part of each Ship Tranche that forms part of the KEXIM Tranche shall
        be
        such amount as appears in the column “Repayment Instalment - KEXIM Tranche (Ship
        Tranche N°·)”
        against the relevant Repayment Date as set out in Part B of
        Schedule 6.

       

      
        	
                4.1.2  

              	
                The
                  amount of each instalment of that part of each Ship Tranche as
                  set out in
                  Schedule 6 Part A and Part B has been calculated on the assumption
                  that the Borrowers will draw the full amount of the Commitments
                  to the
                  relevant Ship Tranche. On the Delivery Date of each Ship and on
                  any
                  occasion on which a partial prepayment of the Loan is made under
                  clause 4, the Facility Agent shall provide the Borrowers and the
                  Lenders with a replacement Schedule 6 Part A and Part B based on the
                  actual amount of the relevant Ship Tranche (or all the Ship Tranches)
                  as
                  at that date showing (a) the exact date of each Repayment Date
                  (subject to
                  clause 6.3), (b) the amount of the instalments due on each Repayment
                  Date for that part of each Ship Tranche that forms part of the
                  KEXIM
                  Tranche and the amount repayable in respect of the Commercial Lenders
                  Tranche on the final Repayment Date, (c) the aggregate principal
                  amount
                  payable in respect of each Ship Tranche on each Repayment Date
                  and (d) the
                  balance of each Ship Tranche outstanding after the repayment of
                  the
                  instalments of the KEXIM Tranche on each Repayment Date. Each revised
                  Schedule 6 shall be binding on the Borrowers and the Lenders in the
                  absence of any manifest error and shall replace the then existing
                  Schedule 6 and shall for all purposes be treated as if it had been
                  attached as Schedule 6 ab initio. Any revised
                  Schedule 6 produced following a partial prepayment of the Loan shall
                  reflect any provision of this Agreement requiring any such partial
                  prepayments to be applied in reducing the repayment instalments
                  set forth
                  in Schedule 6 in inverse order of their due date for
                  payment.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                4.2  

              	
                Voluntary
                  prepayment

              

      

       

      The
        Borrowers may prepay any Ship Tranche in whole or part but if in part in
        a
        minimum amount of five million Dollars ($5,000,000) or any larger sum which
        is
        an integral multiple of one million Dollars ($1,000,000) on any Interest
        Payment
        Date for both the Commercial Lenders Tranche and the KEXIM Tranche of that
        Ship
        Tranche. The Borrowers shall give the Facility Agent at least thirty (30)
        days’
prior notice in writing of their intention to make any such prepayment. The
        amount of each prepayment shall be regarded as being divided between the
        KEXIM
        Tranche and the Commercial Lenders Tranche in the ratio that their respective
        aggregate Contributions bear to the aggregate Contribution of all Lenders
        as at
        the time of prepayment.

       

      The
        prepayment of the KEXIM Tranche (or any part thereof) shall be subject to
        a
        prepayment premium of zero point fifty per cent. (0.50%) of the amount of
        the
        KEXIM Tranche to be prepaid and shall be payable to the Facility Agent (for
        the
        account of KEXIM) on the date such prepayment is due to be made. No prepayment
        premium or penalty is due in respect of the amount of the Commercial Lenders
        Tranche to be prepaid. The prepayment premium relating to the KEXIM Tranche
        shall also be payable in the event of a prepayment on the sale, transfer,
        novation or assignment of the Shipbuilding Contract for a Ship (including,
        without limitation, any novation of the Shipbuilding Contract of a Ship in
        favour of the Time Charterer pursuant to the exercise by the Time Charterer
        of
        its rights under clause 1g of the relevant Time Charter for that Ship) or
        on the sale of a Ship (including any sale of a Ship to the Time Charterer
        pursuant to the exercise by the Time Charterer of its rights under
        clause 30 of the relevant Time Charter for that Ship)  but shall
        not be payable in the event of a mandatory prepayment under clauses 4.3 or
        following a Total Loss under clause 4.4 or a
        cancellation of Commitments to the KEXIM Tranche under
        clause 4.8.

       

      
        	
                4.3  

              	
                Mandatory
                  Prepayment

              

      

       

      
        	
                4.3.1  

              	
                If
                  a Ship has not been delivered by the relevant End of Funding Date
                  the
                  Borrowers shall prepay the Ship Tranche attributable to that Ship
                  on such
                  End of Funding Date and the obligation of the Lenders to make the
                  Ship
                  Tranche for such Ship available for further Advances shall immediately
                  cease and the Lenders’ Commitments to such Ship Tranche shall be reduced
                  to zero.

              

      

       

      
        	
                4.3.2  

              	
                If
                  the Builder rescinds, cancels or terminates a Shipbuilding Contract
                  and
                  such rescission, cancellation or termination is not withdrawn within
                  seven
                  (7) days of such rescission, cancellation or termination, the Borrowers
                  shall prepay the Ship Tranche attributable to that Shipbuilding
                  Contract
                  on the third (3rd) Banking Day following the expiry of such seven
                  (7) day
                  period and the obligation of the Lenders to make the Ship Tranche
                  for such
                  Ship available for further Advances shall immediately cease and
                  the
                  Lenders’ Commitments to such Ship Tranche shall be reduced to
                  zero.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                4.3.3  

              	
                If
                  the Lessor, having regard to clause 8.4.14, rescinds, cancels or terminates
                  a
                  Shipbuilding Contract and such rescission, cancellation or termination
                  is
                  not withdrawn within three (3) days after the Lessor gave notice
                  to the
                  Builder thereof, the Borrowers shall prepay the Ship Tranche attributable
                  to that Shipbuilding Contract on the earlier of (a) the date on
                  which the
                  Builder repays the instalments previously paid by the Lessor under
                  that
                  Shipbuilding Contract and (b) thirty (30) days following the date
                  of such
                  rescission, cancellation or termination, provided that if the Builder
                  disputes such rescission, cancellation or termination and refers
                  the
                  dispute to litigation in accordance with the relevant Shipbuilding
                  Contract prior to the date on which the Borrowers would otherwise
                  be
                  obliged to prepay the relevant Ship Tranche in accordance with
                  this
                  clause 4.3.3, then the Borrowers shall only become obliged to prepay
                  the Ship Tranche on the earliest to occur of (a) ninety (90) days
                  after
                  the date of such rescission, cancellation or termination, (b) the
                  date on
                  which the Builder makes a refund of the instalments previously
                  paid by the
                  Lessor under the relevant Shipbuilding Contract and (c) the date
                  on which
                  the Refund Guarantor makes a payment under the relevant Refund
                  Guarantee(s) and on the date any such prepayment is due to be made
                  under
                  this clause, the obligation of the Lenders to make the Ship Tranche
                  for
                  such Ship available for further Advances shall immediately cease
                  and the
                  Lenders’ Commitments to such Ship Tranche shall be reduced to
                  zero.

              

      

       

      
        	
                4.3.4  

              	
                If,
                  following the Delivery of a Ship, the Lessor becomes entitled to
                  receive a
                  payment from the Builder under the relevant Shipbuilding Contract
                  of an
                  amount exceeding five hundred thousand Dollars ($500,000) that
                  would have
                  been taken as a deduction to the Delivery Instalment had the applicable
                  amount been known or agreed at Delivery (but excluding any liquidated
                  damages for late delivery payable by the Builder under Article 3.3 of
                  the Shipbuilding Contract which does not operate to reduce the
                  Contract
                  Price, which shall not give rise to any prepayment obligation)
                  then the
                  Borrowers shall prepay the Ship Tranche attributable to that Ship
                  in an
                  amount equal to the amount of the payment the Lessor is entitled
                  to
                  receive from the Builder. If the Security Trustee receives such
                  payment
                  from the Builder under the terms of the relevant Lessee Assignment
                  it
                  shall apply such amount in or towards satisfaction of such prepayment
                  obligation and if the Borrowers have already satisfied such obligation
                  and
                  no Default has occurred and is continuing, the Security Trustee
                  shall pay
                  such amount to the Borrowers.

              

      

       

      
        	
                4.3.5  

              	
                If,
                  in respect of a Ship, there is a termination of the agreement to
                  lease the
                  Ship or, as the case may be, the leasing of the Ship under the
                  relevant
                  Lease and/or the Lessor issues a further novation notice under
                  clause 7 of
                  the relevant Novation Agreement in each case in circumstances where
                  no
                  Lease Event of Default has occurred and is continuing, then unless
                  the
                  transaction in respect of the financing of the Ships is restructured
                  on
                  terms acceptable to all of the Finance Parties (acting reasonably)
                  within
                  thirty (30) days of the occurrence of such termination and/or further
                  novation, the Facility Agent shall give notice to the Borrowers
                  and within
                  (3) Banking Days following the date of such notice, the Borrowers
                  shall
                  prepay the Ship Tranche for such Ship to the Facility Agent in
                  full and
                  any Available Commitment in respect of such Ship Tranche shall
                  be reduced
                  to zero.

              

      

       

      For
        the
        purpose of the above paragraph, if the Lessee wishes to exercise its right
        of
        voluntary termination under clauses 2.3 or 2.6 of the relevant Lease, the
        Borrowers shall procure that the Lessee shall give the Facility Agent not
        less
        than thirty (30) days prior written notice of

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       the
        date on which the Lessee intends such voluntary termination to take place
        so
        that the Finance Parties have the required time to discuss a possible
        restructuring of the transaction in respect of the financing of the Ships
        on
        terms acceptable to all the Finance Parties as an alternative to the Facility
        Agent requiring the Borrowers to prepay the relevant Ship Tranche upon the
        voluntary termination of the relevant Lease pursuant to clauses 2.3 or 2.6
        of
        such Lease.

       

      
        	
                4.3.6  

              	
                If
                  there is a change in the ownership of the Lessor without the prior
                  written
                  consent of all of the Finance Parties, which consent shall not
                  be
                  unreasonably withheld if the new parent of the Lessor is a financial
                  institution with a minimum credit rating of A with Standard & Poors
                  Rating Services or A with Moodys Investors Services Inc. and such
                  new
                  parent provides support letters in respect of the Lessor in substantially
                  the same form as the Lessor Parent Support Letters, the Facility
                  Agent
                  shall be entitled to give written notice to the Borrowers and where
                  such
                  written notice is given:

              

      

       

      
        	
                (a)  

              	
                prior
                  to the drawdown of an Advance hereunder, then on the date of such
                  change
                  the Lenders’ Commitments shall be reduced to zero and the Lenders shall
                  have no obligation to make any Advances hereunder;
                  or

              

      

       

      
        	
                (b)  

              	
                following
                  the drawdown of an Advance hereunder, then the Borrowers shall
                  prepay Loan
                  in full within three (3) Banking Days following the date of such
                  change.

              

      

       

      
        	
                4.3.7  

              	
                If
                  there occurs:

              

      

       

      
        	
                (a)  

              	
                in
                  relation to the Lessor or the Lessor Parent, any event which corresponds
                  with, or has an effect equivalent or similar to, any of those events
                  mentioned in clauses 10.1.7, 10.1.9, 10.1.10, 10.1.11, 10.1.12,
                  10.1.14 or
                  10.1.15 as if in such clauses, references to “Security Party” were
                  references to the Lessor and the Lessor Parent;
                  or

              

      

       

      
        	
                (b)  

              	
                in
                  relation to the Security Documents, any event which corresponds
                  with, or
                  has an effect equivalent or similar to, the events mentioned in
                  clause
                  10.1.3 as if in such clause, references to “Security Party” were
                  references to the Lessor and the Lessor
                  Parent,

              

      

       

      then
        the
        Facility Agent shall be entitled to give written notice to the Borrowers
        and
        where such written notice is given, the Borrowers shall be obliged to cancel
        all
        remaining Commitments on the date of such occurrence and prepay the Loan
        in full
        within three (3) Banking Days following the date of such
        occurrence.

       

      
        	
                4.4  

              	
                Prepayment
                  on Total Loss or sale

              

      

       

      
        	
                4.4.1  

              	
                Without
                  prejudice to clause 8.4.14, on a
                  Shipbuilding Contract being sold, transferred, novated or assigned
                  (including, without limitation, any novation of the Shipbuilding
                  Contract
                  of a Ship in favour of the Time Charterer pursuant to the exercise
                  by the
                  Time Charterer of its rights under clause 1 of the relevant Time
                  Charter but not including a novation to the Replacement Purchaser
                  pursuant
                  to clause 7 of the relevant Novation Agreement) or a Ship being
                  sold
                  (including any sale of a Ship to the Time Charterer pursuant to
                  the
                  exercise by the Time Charterer of its rights under clause 30 of the
                  relevant Time Charter) or becoming a Total Loss, in each case before
                  the
                  First Advance for such Ship is drawn down, the obligation of the
                  Lenders
                  to make the Ship Tranche for such Ship available shall immediately
                  cease
                  and the Lenders Commitments to such Ship Tranche shall be reduced
                  to
                  zero.

              

      

       

      
        	
                4.4.2  

              	
                Without
                  prejudice to clause 8.1.14, if after the drawdown of the First
                  Advance in respect of a Ship Tranche, the relevant Shipbuilding
                  Contract
                  is sold, transferred, novated or assigned (including, without limitation,
                  any novation of the Shipbuilding Contract of a Ship in favour of
                  the Time
                  Charterer pursuant to the exercise by the Time Charterer of its
                  rights
                  under clause 1g of the relevant Time Charter) or the relevant Ship is
                  sold (including any sale of a Ship to the Time Charterer pursuant
                  to the
                  exercise by the Time Charterer of its rights under clause 30 of the
                  relevant Time Charter or to the Builder pursuant to the exercise
                  by the
                  Lessor of its rights under article 3.20 of the relevant Shipbuilding
                  Contract) or becomes a Total Loss, the Borrowers shall on the Disposal
                  Reduction Date prepay to the Facility Agent an amount in Dollars
                  equal to
                  the principal amount of the Ship Tranche made available for such
                  Ship
                  outstanding on the Disposal Reduction Date and the obligation of
                  the
                  Lenders to make the Ship Tranche for such Ship available for further
                  Advances shall immediately cease and the Lenders’ Commitments to such Ship
                  Tranche shall be reduced to zero.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                4.4.3  

              	
                For
                  the purposes of this clause 4.4:

              

      

       

      “Disposal
        Reduction Date” means:

       

      
        	
                 

              	
                        
                  (a)

              	
                in
                  relation to a Ship which has become a Total Loss, its Total Loss
                  Reduction
                  Date; and

              

      

       

      
        	
                 

              	
                        
                  (b)

              	
                in
                  relation to a Shipbuilding Contract that is sold, transferred,
                  novated or
                  assigned or a Ship which is sold, the date upon which such sale,
                  transfer,
                  novation or assignment is completed by the assumption by the buyer
                  of
                  obligations under the Shipbuilding Contract in place of the relevant
                  Borrower or the transfer of title to such Ship to the purchaser,
                  in either
                  case, in exchange for payment of the relevant purchase
                  price;

              

      

       

      “Total
        LossReduction Date” means, in relation to a Ship, the
        date which is the earliest of:

       

      
        	
                 

              	
                        
                  (a)

              	
                the
                  date falling ninety (90) days after such Ship becomes a Total
                  Loss;

              

      

       

      
        	
                 

              	
                        
                  (b)

              	
                the
                  date upon which the Builder or the Refund Guarantor makes a refund
                  of the
                  instalments previously paid by the Lessor or, where applicable,
                  the
                  Replacement Purchaser under the relevant Shipbuilding Contracts;
                  and

              

      

       

      
        	
                 

              	
                        
                  (c)

              	
                the
                  date on which insurance proceeds or Requisition Compensation in
                  respect of
                  such Total Loss are received by the Lessor or the Lessee or, where
                  applicable, the Replacement Purchaser (or the Security Trustee
                  on behalf
                  of the Lenders as assignee or, as the case may be, sub-assignee
                  pursuant
                  to the relevant Security
                  Documents).

              

      

       

      For
        the
        purpose of this Agreement and the other Security Documents, a Total Loss
        shall
        be deemed to have occurred:

       

      
        	
                (a)  

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

              

      

       

      
        	
                (b)  

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

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (c)  

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

              

      

       

      
        	
                (d)  

              	
                in
                  the case of Compulsory Acquisition, on the date upon which the
                  relevant
                  requisition of title or other compulsory acquisition occurs;
                  or

              

      

       

      
        	
                (e)  

              	
                in
                  the case of hijacking, theft, condemnation, capture, seizure, arrest,
                  detention or confiscation of such Ship (other than where the same
                  amounts
                  to Compulsory Acquisition of such Ship) by any Government Entity,
                  or by
                  persons purporting to act on behalf of any Government Entity, which
                  deprives the Lessee of the use of such Ship for more than sixty
                  (60) days,
                  upon the expiry of the period of sixty (60) days after the date
                  upon which
                  the relevant hijacking, theft, condemnation, capture, seizure,
                  arrest,
                  detention or confiscation occurred.

              

      

       

      
        	
                4.4.4  

              	
                Any
                  insurance moneys or Requisition Compensation or proceeds of sale
                  received
                  by the Security Trustee or the Lenders in respect of such Total
                  Loss or
                  sale of a Ship or the sale, transfer, novation or assignment of
                  a
                  Shipbuilding Contract or the cancellation of a Time Charter by
                  the Time
                  Charterer pursuant to clause 2d of such Time Charter, under the
                  relevant Security Document shall (if and to the extent necessary
                  to ensure
                  compliance with clauses 4.3, 4.4 and 4.5) be applied by the Security
                  Trustee in or towards making any prepayment and paying any other
                  moneys
                  required under clauses 4.3, 4.4 or 4.5 and provided no Default has
                  occurred and is continuing the balance, if any, shall be paid to
                  the
                  Borrowers or as they may otherwise
                  direct.

              

      

       

      
        	
                4.5  

              	
                Mandatory
                  prepayment on cancellation of a Time
                  Charter

              

      

       

      If
        the
        Time Charterer exercises its cancellation option under clause 2d of any of
        the Time Charters, any Cancellation Fee payable by the Time Charterer in
        respect
        of the exercise of such cancellation option shall be paid into the Operating
        Account.  Any Cancellation Fee so paid into the Operating Account
        shall be subject to the provisions of the Lessee Assignment and the Account
        Pledge.  During the period commencing on the date of cancellation of
        any Time Charter and expiring one hundred and twenty (120) days after such
        date,
        the Borrowers and/or the Lessee shall be entitled to arrange for alternative
        sub-charter arrangements to be put in place in respect of the relevant Ship
        on
        terms and with a charterer acceptable to all the Lenders in their absolute
        discretion.

       

      If
        on the
        expiry of the said one hundred and twenty (120) day period, no alternative
        sub
        charter arrangements that are satisfactory to all of the Lenders have been
        put
        in place in respect of the relevant Ship, then the Borrowers shall prepay
        the
        Ship Tranche associated with the relevant Ship on the next Interest Payment
        Date
        for the relevant Ship Tranche falling after the expiry of the said one hundred
        and twenty (120) day period and as specified by the Facility Agent in a notice
        in writing given to the Borrowers and if the cancellation occurs prior to
        the
        Delivery Date for the relevant Ship, the obligations of the Lenders to make
        the
        Ship Tranche for such Ship available for further Advances shall immediately
        cease and the Lenders’ Commitments to such Ship Tranche shall be reduced to
        zero.

       

      
        	
                4.6  

              	
                Amounts
                  payable on prepayment

              

      

       

      Any
        prepayment under this Agreement shall be made together with (a) accrued interest
        on the amount to be prepaid to the date of such prepayment, (b) any additional
        amount payable under clauses 6.7 or 12.2, (c) any prepayment premium
        payable under clause 4.2 and (d) all other sums payable by the Borrowers
        under this Agreement or any of the other Security Documents including, without
        limitation, any accrued (but unpaid) commitment commission payable under
        clauses 5.1.2 or 5.1.3 and any amounts payable under
        clause 11.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                4.7  

              	
                Notice
                  of prepayment; reduction of repayment
                  instalments

              

      

       

      Every
        notice of prepayment shall be effective only on actual receipt by the Facility
        Agent, shall be irrevocable, shall specify the amount to be prepaid and shall
        oblige the Borrowers to make such prepayment on the date
        specified.  No amount prepaid may be re-borrowed.   Any
        partial prepayment pursuant to clause 4.2 or any other provision of this
        Agreement shall be applied pro rata to each Ship Tranche in reducing the
        repayment instalments of each Ship Tranche under clause 4.1 in inverse
        order of their due dates for payment. The Borrowers may not prepay the Loan
        or
        any part thereof save as expressly provided in this Agreement.

       

      
        	
                4.8  

              	
                Cancellation
                  of Commitments

              

      

       

      The
        Borrowers may at any time, by notice to the Facility Agent (effective only
        on
        actual receipt), cancel with effect from a date not less than thirty (30)
        days
        after the receipt by the Facility Agent of such notice the whole or any part
        (being five million Dollars ($5,000,000) or any larger sum which is an integral
        multiple of one million Dollars ($1,000,000)), of the Commitments to any
        Ship
        Tranche which have not then been borrowed or requested in a Drawdown Notice.
        Any
        such notice of cancellation, once given, shall be irrevocable and upon such
        cancellation taking effect the Commitment of each Lender to such Ship Tranche
        shall be reduced proportionately.

       

      
        	
                4.9  

              	
                Cancellation
                  of KEXIM Commitments

              

      

       

      If
        the
        Borrowers wish to cancel any part of the Commitment of KEXIM then the Borrowers
        shall be obliged to pay to KEXIM on the relevant date of cancellation a
        cancellation fee equal to zero point two five per cent. (0.25%) of the
        applicable amount of the Commitment of KEXIM which is so cancelled.

       

      
        	
                5  

              	
                Commitment
                  commission, fees and
                  expenses

              

      

       

      
        	
                5.1  

              	
                Fees

              

      

       

      The
        Borrowers shall pay to the Facility Agent:

       

      
        	
                5.1.1  

              	
                in
                  accordance with the Fee Letters and for distribution to the Arranger,
                  KEXIM and the Commercial Lenders, the fees details of which are
                  set out in
                  the Fee Letters; 

              

      

       

      
        	
                5.1.2  

              	
                for
                  the account of KEXIM, on the date falling three (3) months after
                  the
                  Original Date and on each of the dates falling at three (3) monthly
                  intervals thereafter up to and including the last of the Termination
                  Dates, commitment commission in arrear computed from the Original
                  Date at
                  the rate of zero point three per cent. (0.30%) per annum on the
                  daily
                  undrawn and uncancelled amount of the Commitments of
                  KEXIM;

              

      

       

      
        	
                5.1.3  

              	
                for
                  the account of each Commercial Lender, on the date falling three
                  (3)
                  months after 30 September 2004 and on each of the dates falling
                  at three
                  (3) monthly intervals thereafter up to and including the last of
                  the
                  Termination Dates, commitment commission in arrear computed from
                  30 September 2004 at the rate of zero point four per cent. (0.40%)
                  per annum on the daily undrawn and uncancelled amount of the Commitments
                  of such Commercial Lender.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        fees
        referred to in sub-clause 5.1.1 and the commitment commission referred to
        in sub-clauses 5.1.2 and 5.1.3 shall be payable by the Borrowers to the
        Facility Agent whether or not any of the Commitments of the Lenders are
        advanced.

       

      
        	
                5.2  

              	
                Expenses

              

      

       

      The
        Borrowers shall pay to the Facility Agent on a full indemnity basis on
        demand:

       

      
        	
                5.2.1  

              	
                all
                  expenses (including legal, insurance, printing and out-of-pocket
                  expenses
                  and any tax thereon) reasonably incurred by the Facility Agent
                  and KEXIM
                  in connection with the negotiation, preparation, execution and,
                  where
                  relevant, registration of the Security Documents (subject to any
                  limit
                  agreed between the Facility Agent and any counsel instructed by
                  it) and of
                  any amendment or extension of, or the granting of any waiver or
                  consent
                  under, any of the Security Documents;
                  and

              

      

       

      
        	
                5.2.2  

              	
                all
                  expenses (including legal, printing and out-of-pocket expenses)
                  properly
                  incurred by the Finance Parties or any of them in connection with,
                  the
                  enforcement or attempted enforcement of, or preservation or attempted
                  preservation of any rights under, any of the Security Documents,
                  or
                  otherwise in respect of the moneys owing under any of the Security
                  Documents,

              

      

       

      together
        with interest at the rate referred to in clause 3.3 from the date falling
        fourteen (14) days following the receipt by the Borrower from the Facility
        Agent
        of a copy invoice or other evidence with respect to those expenses  to
        the date of payment (as well after as before judgement).

       

      
        	
                5.3  

              	
                Value
                  Added Tax

              

      

       

      All
        fees
        and expenses payable pursuant to this clause 5 shall be paid together with
        value added tax or any similar tax (if any) properly chargeable
        thereon.  Any value added tax chargeable in respect of any services
        supplied by the Finance Parties or any of them under this Agreement, the
        Agency
        Agreement or any other Security Document shall, on delivery of the value
        added
        tax invoice, be paid in addition to any sum agreed to be paid
        hereunder.

       

      
        	
                5.4  

              	
                Stamp
                  and other duties

              

      

       

      The
        Borrowers shall pay all stamp, documentary, registration or other like duties
        or
        Taxes (including, but without limitation, any duties or Taxes payable by,
        or
        assessed on, any of the Finance Parties) imposed on or in connection with
        any of
        the Transaction Documents, the Security Documents or the Loan and shall
        indemnify each of the Finance Parties against any liability arising by reason
        of
        any delay or omission by the Borrowers to pay such duties or Taxes.

       

      
        	
                6  

              	
                Payments
                  and taxes; accounts and
                  calculations

              

      

       

      
        	
                6.1  

              	
                No
                  set-off or counterclaim; distribution to the
                  Lenders

              

      

       

      All
        payments to be made by the Borrowers under any of the Security Documents
        shall
        be made in full, without any set-off or counterclaim whatsoever and, subject
        as
        provided in clause 6.7, free and clear of any deductions or withholdings,
        in Dollars (except for costs, charges or expenses which shall be paid in
        the
        currency in which they are incurred) on the due date to the account of the
        Facility Agent at such bank in such place as the Facility Agent may from
        time to
        time specify for this purpose.  Save where the Security Documents
        provide for a payment to be made for the account of a particular Finance
        Party,
        in which case the Facility Agent shall distribute the relevant payment to
        the
        Finance Party concerned, payments to be made by the Borrowers under the Security
        Documents shall be for the account of all the Lenders and the Facility Agent
        shall forthwith distribute such payments in like funds as are received by
        the
        Facility Agent to the Lenders rateably in accordance with their Commitments
        or
        Contributions, as the case may be.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                6.2  

              	
                Payment
                  by the Lenders

              

      

       

      All
        sums
        to be advanced by the Lenders to the Borrowers under this Agreement shall
        be
        remitted in Dollars on the relevant Drawdown Date (or earlier) to the account
        of
        the Facility Agent at Calyon Americas New York, Building 1301 Avenue of the
        Americas, NY 10019, Swift Code: CRLYUS33, CHIPS: 807, Fed ABA: 0260-0807-3,
        Account No. 0100383000100 of Calyon Paris, Reference: Teekay 3-Ship Facility,
        Attention: Sylvie Godet Couery - Middle Office or at such other bank as the
        Facility Agent may have notified to the Lenders and shall be paid by the
        Facility Agent on such date in like funds as are received by the Facility
        Agent
        to the account or accounts specified in the relevant Drawdown
        Notice.

       

      
        	
                6.3  

              	
                Non-Banking
                  Days

              

      

       

      When
        any
        payment under any of the Security Documents would otherwise be due on a day
        which is not a Banking Day, the due date for payment shall be extended to
        the
        next following Banking Day unless such Banking Day falls in the next calendar
        month in which case payment shall be made on the immediately preceding Banking
        Day.

       

      When
        the
        first date or last date of an Interest Period would otherwise fall on a day
        which is not a Banking Day, such date shall be extended to the next following
        Banking Day unless such Banking Day falls in the next calendar month in which
        case such date shall fall on the immediately preceding Banking Day.

       

      
        	
                6.4  

              	
                Facility
                  Agent may assume receipt

              

      

       

      Where
        any
        sum is to be paid under this Agreement to the Facility Agent for the account
        of
        another person, the Facility Agent may assume that the payment will be made
        when
        due and may (but shall not be obliged to) make such sum available to the
        person
        so entitled.  If it proves to be the case that such payment was not
        made to the Facility Agent, then the person to whom such sum was so made
        available shall on request refund such sum to the Facility Agent together
        with
        interest thereon sufficient to compensate the Facility Agent for the cost
        of
        making available such sum up to the date of such repayment and the person
        by
        whom such sum was payable shall indemnify the Facility Agent for any and
        all
        loss or expense which the Facility Agent may sustain or incur as a consequence
        of such sum not having been paid on its due date.

       

      
        	
                6.5  

              	
                Calculations

              

      

       

      All
        interest and other payments of an annual nature under any of the Security
        Documents shall accrue from day to day and be calculated on the basis of
        actual
        days elapsed and a three hundred and sixty (360) day year.  In
        calculating the actual number of days elapsed in a period which is one of
        a
        series of consecutive periods with no interval between them or a period on
        the
        last day of which any payment falls to be made in respect of such period,
        the
        first day of such period shall be included but the last day
        excluded.

       

      
        	
                6.6  

              	
                Certificates

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Any
        certificate or determination of the Facility Agent, or any Lender as to any
        rate
        of interest, rate of exchange or any other amount pursuant to and for the
        purposes of any of the Security Documents shall, as between Finance Parties
        and
        as between any Finance Party and the Borrowers, be regarded as being prima
        facie evidence of such rate or other amount.

       

      
        	
                6.7  

              	
                Grossing-up
                  for Taxes - Borrowers

              

      

       

      If
        at any
        time the Borrowers are required by any applicable law or regulation of any
        Government Entity binding on them to make any deduction or withholding in
        respect of Taxes from any payment due under any of the Security Documents
        for
        the account of any Finance Party (or if the Facility Agent is required to
        make
        any such deduction or withholding from a payment to a Finance Party), the
        sum
        due from the Borrowers in respect of such payment shall be increased to the
        extent necessary to ensure that, after the making of such deduction or
        withholding, each Finance Party receives on the due date for such payment
        (and
        retains, free from any liability in respect of such deduction or withholding),
        a
        net sum equal to the sum which it would have received had no such deduction
        or
        withholding been required to be made and the Borrowers shall indemnify each
        Finance Party against any losses or costs incurred by it by reason of any
        failure of the Borrowers to make any such deduction or withholding or by
        reason
        of any increased payment not being made on the due date for such
        payment.  The Borrowers shall promptly pay to the relevant tax
        authorities each amount so deducted or withheld and deliver to the Facility
        Agent any receipts, certificates or other proof evidencing the amounts (if
        any)
        paid or payable in respect of any deduction or withholding as
        aforesaid.

       

      
        	
                6.8  

              	
                Grossing-up
                  for Taxes - Lenders

              

      

       

      If
        at any
        time any Lender is required by any applicable law or regulation of any
        Government Entity binding on it to make any deduction or withholding in respect
        of Taxes from any payment due under any of the Security Documents for the
        account of the Facility Agent, the sum due from such Lender in respect of
        such
        payment shall be increased to the extent necessary to ensure that, after
        the
        making of such deduction or withholding, the Facility Agent receives on the
        due
        date for such payment (and retains free from any liability in respect of
        such
        deduction or withholding) a net sum equal to the sum which it would have
        received had no such deduction or withholding been required to be made and
        each
        Lender shall indemnify the Facility Agent against any losses or costs incurred
        by it by reason of any failure of such Lender to make any such deduction
        or
        withholding or by reason of any increased payment not being made on the due
        date
        for such payment.

       

      
        	
                6.9  

              	
                Claw-
                  back of tax benefit

              

      

       

      If,
        following any such deduction or withholding as is referred to in clause 6.7
        from any payment by the Borrowers and the payment by the Borrowers of the
        amount
        of such deduction or withholding to the appropriate tax authorities, the
        Facility Agent or any Lender, shall receive or be granted a credit against
        or
        remission for any Taxes payable by it (by reason of the payment of such
        deduction or withholding to the tax authorities), the Facility Agent or such
        Lender shall, subject to the Borrowers having made any increased payment
        in
        accordance with clause 6.7 and to the extent the Facility Agent or such
        Lender can do so without prejudicing the retention of the amount of such
        credit
        or remission and without prejudice to the right of the Facility Agent or
        such
        Lender to obtain any other relief or allowance which may be available to
        it and
        to apply any credit or remission in such order and against such amounts as
        it
        may choose, reimburse the Borrowers with such amount as the Facility Agent
        or
        such Lender shall in its absolute discretion certify to be the proportion
        of
        such credit or remission as will leave it (after such reimbursement) in no
        worse
        position than 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      it
        would
        have been in had there been no such deduction or withholding from the payment
        by
        the Borrowers as aforesaid. Such reimbursement shall be made forthwith upon
        the
        Facility Agent or, as the case may be, the relevant Lender certifying that
        the
        amount of such credit or remission has been received by it. Nothing contained
        in
        this clause shall oblige the Facility Agent or any Lender to rearrange its
        tax affairs or to disclose any information regarding its tax affairs and
        computations. Without prejudice to the generality of the foregoing, the
        Borrowers shall not, by virtue of this clause 6.9, be entitled to enquire
        about the Facility Agent’s or any Lender’s tax affairs.

       

      
        	
                6.10  

              	
                Bank
                  account

              

      

       

      Each
        Lender shall maintain, in accordance with its usual practice, an account
        or
        accounts evidencing the amounts from time to time lent by, owing to and paid
        to
        it under the Security Documents.  The Facility Agent shall maintain a
        control account showing each Advance, Ship Tranche and other sums owing by
        the
        Borrowers under the Security Documents.  The control account shall, in
        the absence of manifest error, be conclusive as to the amount from time to
        time
        owing by the Borrowers under the Security Documents.

       

      
        	
                7  

              	
                Representations and warranties

              

      

       

      
        	
                7.1  

              	
                Continuing
                  representations and
                  warranties

              

      

       

      The
        Borrowers jointly and severally represent and warrant to each of the Finance
        Parties that:

       

      
        	
                7.1.1  

              	
                Due
                  incorporation: each of the Borrowers is duly incorporated as a
                  corporation and validly existing under the laws of the Marshall
                  Islands
                  and has power to carry on its business as it is now being conducted
                  and to
                  own its property and other assets;

              

      

       

      
        	
                7.1.2  

              	
                Corporate
                  power: each of the Borrowers has power to execute, deliver
                  and
                  perform its obligations under the Transaction Documents and to
                  borrow the
                  Total Commitments; all necessary corporate and other action has
                  been taken
                  to authorise the execution, delivery and performance of the same
                  and no
                  limitation on the powers of any Borrower to borrow will be exceeded
                  as a
                  result of borrowings under this
                  Agreement;

              

      

       

      
        	
                7.1.3  

              	
                Binding
                  obligations: the Transaction Documents to which they are
                  respectively a party constitute or will, when executed, constitute
                  valid
                  and legally binding obligations of the Borrowers enforceable in
                  accordance
                  with their respective terms;

              

      

       

      
        	
                7.1.4  

              	
                No
                  conflict with other obligations: the execution and delivery of,
                  the borrowing of the Total Commitments and the performance of their
                  respective obligations under, and compliance with the provisions
                  of, the
                  relevant Shipbuilding Contracts, the Security Documents and the
                  other
                  Transaction Documents to which they are respectively a party, by
                  the
                  relevant Borrowers will not (a) contravene any existing applicable
                  law, statute, documents and the Transaction Documents to which
                  they are
                  respectively a party, regulation or any judgement, decree or permit
                  to
                  which any of the Borrowers is subject, (b)  conflict with, or result
                  in any breach of any of the terms of, or constitute a default under,
                  any
                  agreement or other instrument to which any of the Borrowers is
                  a party or
                  is subject or by which it or any of its property is bound,
                  (c) contravene or conflict with any provision of the constitutional
                  documents of any of the Borrowers or (d) result in the creation or
                  imposition of or oblige any of the Borrowers to create any Encumbrance
                  (other than a Permitted Encumbrance) on any of the undertakings,
                  assets,
                  rights or revenues of any of the
                  Borrowers;

              

      

       

      
        	
                7.1.5  

              	
                Choice
                  of law: the choice of English law to govern the Security
                  Documents (other than the Mortgages (including the Mortgage Transfers),
                  the Account Pledge and the Retention Account Pledge), the choice
                  of French
                  law to govern the Account Pledge and the Retention Account Pledge
                  and the
                  choice of Bahamas law to govern the Mortgages (including the Mortgage
                  Transfers) and the submissions by the Borrower to the jurisdiction
                  of the
                  English courts and (as the case may be) the French courts and (as
                  the case
                  may be) the Bahamas courts are valid and
                  binding;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                7.1.6  

              	
                No
                  immunity: neither the Borrowers nor any of their respective
                  assets are entitled to immunity on the grounds of sovereignty or
                  otherwise
                  from any legal action or proceeding (which shall include, without
                  limitation, suit, attachment prior to judgement, execution or other
                  enforcement);

              

      

       

      
        	
                7.1.7  

              	
                Consents
                  obtained: every consent, authorisation, licence or approval of,
                  or registration with or declaration to governmental or public bodies
                  or
                  authorities or courts required by any Borrower to authorise, or
                  required
                  by any Borrower in connection with, the execution, delivery, validity,
                  enforceability or admissibility in evidence of the Transaction
                  Documents
                  to which it is or is to be a party and each of the Security Documents
                  or
                  the performance by each Borrower of its obligations under the Security
                  Documents to which it is or is to be a party, has been obtained
                  or made
                  and is in full force and effect and there has been no default in
                  the
                  observance of any of the conditions or restrictions (if any) imposed
                  in,
                  or in connection with, any of the
                  same;

              

      

       

      
        	
                7.1.8  

              	
                Borrowers’
                  own account: in relation to the borrowing by each Borrower of the
                  Loan, the performance and discharge of its obligations and liabilities
                  under the Security Documents and the transactions and other arrangements
                  effected or contemplated by the Security Documents to which such
                  Borrower
                  is a party, it is acting for its own account and that the foregoing
                  will
                  not involve or lead to a contravention of any law, official requirement
                  or
                  other regulatory measure or procedure which has been implemented
                  to combat
                  “money laundering” (as defined in Article 1 of the
                  Directive (91/308/EEC) of the Council of the European
                  Communities);

              

      

       

      
        	
                7.1.9  

              	
                Place
                  of business: none of the Borrowers has a place of business (or is
                  registered as a company or business) in England and Wales;
                  and

              

      

       

      
        	
                7.1.10  

              	
                No
                  Encumbrance in respect of pre-delivery security: the benefit of
                  any of the rights, title and interest of the Lessor and the Replacement
                  Purchaser in or to each Shipbuilding Contract and the Refund Guarantees
                  is
                  not subject to any Encumbrance (other than, if applicable, any
                  Encumbrance
                  arising by operation of law in favour of the Time Charterer under
                  the Time
                  Charters) and such benefit and all such rights, title and interest
                  are
                  freely assignable and chargeable in the manner contemplated by
                  the Lessor
                  Assignments, Lessee Assignments and the Replacement Purchaser
                  Assignments.

              

      

       

      
        	
                7.2  

              	
                Initial
                  representations and
                  warranties

              

      

       

      The
        Borrowers jointly and severally further represent and warrant to each of
        the
        Finance Parties that:

       

      
        	
                7.2.1  

              	
                Pari
                  passu: the obligations of each Borrower under the Security
                  Documents are direct, general and unconditional obligations of
                  such
                  Borrower and rank at least pari passu with all other present and
                  future
                  unsecured and unsubordinated Indebtedness of such Borrower other
                  than
                  those obligations that are mandatorily preferred by law and not
                  solely by
                  contract;

              

      

       

      
        	
                7.2.2  

              	
                No
                  default under other Indebtedness: none of the Borrowers is (nor
                  would with the giving of notice or lapse of time or the satisfaction
                  of
                  any other condition or combination thereof be) in material breach
                  of or in
                  default under any agreement relating to Indebtedness to which it
                  is a
                  party or by which it may be bound;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                7.2.3  

              	
                Information:
                  the information, exhibits and reports furnished by any Borrower
                  to the
                  Finance Parties in connection therewith or with the negotiation
                  and
                  preparation of the Security Documents are true and accurate in
                  all
                  material respects and not misleading and all expressions of opinion
                  contained therein genuinely reflect the opinions of the directors
                  and
                  senior management of such Borrower and are based on reasonable
                  assumptions; do not omit material facts and all reasonable enquiries
                  have
                  been made to verify the facts and statements contained therein;
                  there are
                  no other facts the omission of which would make any fact or statement
                  therein misleading;

              

      

       

      
        	
                7.2.4  

              	
                No
                  withholding Taxes: no Taxes are imposed by withholding or
                  otherwise on any payment to be made by any Security Party under
                  the
                  Transaction Documents or the Security Documents or are imposed
                  on or by
                  virtue of the execution or delivery by the Security Parties of
                  the
                  Transaction Documents or the Security Documents or any other document
                  or
                  instrument to be executed or delivered under any of the Security
                  Documents;

              

      

       

      
        	
                7.2.5  

              	
                No
                  Default: no Default has occurred which is
                  continuing;

              

      

       

      
        	
                7.2.6  

              	
                Compliance
                  with Environmental Laws and Approvals: except as may already have
                  been disclosed by any of the Borrowers in writing to, and acknowledged
                  in
                  writing by, the Facility Agent:

              

      

       

      
        	
                (a)  

              	
                the
                  Borrowers and their Related Companies and their respective Environmental
                  Affiliates have complied, to the best of their knowledge and belief,
                  with
                  the provisions of all Environmental Laws except where non-compliance
                  does
                  not and will not have a Material Adverse
                  Effect;

              

      

       

      
        	
                (b)  

              	
                the
                  Borrowers and their Related Companies and their respective Environmental
                  Affiliates have obtained, to the best of their knowledge and belief,
                  all
                  Environmental Approvals and are in compliance with all such Environmental
                  Approvals, except where the failure to obtain or comply with any
                  such
                  Environmental Approvals does not and will not have a Material Adverse
                  Effect; and

              

      

       

      
        	
                (c)  

              	
                none
                  of the Borrowers nor any of their Related Companies nor any of
                  their
                  respective Environmental Affiliates has received, to the best of
                  their
                  knowledge and belief, notice that any of the Borrowers or any of
                  their
                  Related Companies or any such Environmental Affiliate is not in
                  compliance
                  with any Environmental Law or any Environmental Approval, where
                  such
                  non-compliance has or will have a Material Adverse
                  Effect;

              

      

       

      
        	
                7.2.7  

              	
                No
                  Environmental Claims: except as may already have been disclosed
                  by any of the Borrowers in writing to, and acknowledged in writing
                  by, the
                  Facility Agent there is no Environmental Claim pending or threatened
                  against any of the Borrowers or any of their Related Companies
                  or any
                  Relevant Ship or any of their respective Environmental Affiliates
                  that has
                  or will have a Material Adverse
                  Effect;

              

      

       

      
        	
                7.2.8  

              	
                No
                  potential Environmental Claims: except as may already have been
                  disclosed by any of the Borrowers in writing to, and acknowledged
                  in
                  writing by, the Facility Agent there has been no emission, spill,
                  release
                  or discharge of a Pollutant from any Relevant Ship which could
                  give rise
                  to an Environmental Claim that would have a Material Adverse
                  Effect;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                7.2.9  

              	
                Copies
                  true and complete: the copies of the Transaction Documents to
                  which the Finance Parties are not a party delivered or to be delivered
                  to
                  the Facility Agent pursuant to clause 9.1 are, or will when delivered
                  be, true and complete copies of such documents; such documents
                  will when
                  delivered constitute valid and binding obligations of the parties
                  thereto
                  enforceable in accordance with its terms and there will have been
                  no
                  amendments or variations thereof (other than, in the case of the
                  Shipbuilding Contracts, changes or variations permitted under the
                  terms of
                  clause 8.4.11) or defaults
                  thereunder;

              

      

       

      
        	
                7.2.10  

              	
                No
                  Default under Shipbuilding Contracts: the Lessor or, to the
                  extent the following obligations are performed by the Supervisor
                  on behalf
                  of the Lessor pursuant to the Supervision Agreements, the Supervisor
                  is
                  not in default of any of the Lessor’s obligations under any of the
                  Shipbuilding Contracts or any of the Lessor’s obligations upon the
                  performance or observance of which depend the continued liability
                  of the
                  Refund Guarantors in accordance with the terms of the relevant
                  Refund
                  Guarantees;

              

      

       

      
        	
                7.2.11  

              	
                No
                  litigation: no litigation, arbitration or administrative
                  proceeding is taking place, pending or, to the knowledge of the
                  officers
                  of any of the Borrowers, threatened against any of the Borrowers which
                  could have a material adverse effect on the business, assets or
                  financial
                  condition of any of the Borrowers;
                  and

              

      

       

      
        	
                7.2.12  

              	
                No
                  filings required: save for the registration of (a) the Mortgages
                  (including the Mortgage Transfers) in the relevant register under
                  the laws
                  of the relevant Flag State through the relevant Registry and (b)
                  the
                  Mortgages (including the Mortgage Transfers), the Lessor Assignments,
                  the
                  Lessee Assignments, the Replacement Purchaser Assignments, the
                  Account
                  Pledge and the Retention Account Pledge with the Registrar for
                  Companies
                  of England and Wales, it is not necessary to ensure the legality,
                  validity, enforceability or admissibility in evidence of any of
                  the
                  Transaction Documents to which any Borrower is a party that they
                  or any
                  other instrument be notarised, filed, recorded, registered or enrolled
                  in
                  any court, public office or elsewhere in any Relevant Jurisdiction
                  or that
                  any stamp, registration or similar tax or charge be paid in any
                  Relevant
                  Jurisdiction on or in relation to the Transaction Documents and
                  each of
                  the Transaction Documents is in proper form for its enforcement
                  in the
                  courts of each Relevant
                  Jurisdiction.

              

      

       

      
        	
                7.3  

              	
                Representations
                  and warranties relating to the Delivery
                  Dates

              

      

       

      The
        Borrowers jointly and severally represent and warrant (and shall be deemed
        to
        represent and warrant) to each of the Finance Parties on the Delivery Date
        for
        each Ship that:

       

      
        	
                7.3.1  

              	
                Ships:
                  the relevant Ship will on its Delivery Date
                  be:

              

      

       

      
        	
                (a)  

              	
                in
                  the absolute ownership of the Lessor who will on and after each
                  such date
                  (unless that Ship is sold in accordance with the Transaction Documents)
                  be
                  the sole, legal and beneficial owner of such
                  Ship;

              

      

       

      
        	
                (b)  

              	
                registered
                  in the name of the Lessor through the Registry as a ship under
                  the laws
                  and flag of the Flag State and with the Mortgage for that Ship
                  duly
                  registered as a first priority
                  mortgage;

              

      

       

      
        	
                (c)  

              	
                operationally
                  seaworthy and in every way fit for
                  service;

              

      

       

      
        	
                (d)  

              	
                classed
                  with the relevant Classification free of all requirements and
                  recommendations of the relevant Classification Society (other than
                  any
                  requirements and recommendations at the Delivery Date which are
                  approved
                  in writing by the Time Charterer and which are also approved by
                  the
                  Facility Agent (such approval of the Facility Agent not to be unreasonably
                  withheld); and

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (e)  

              	
                delivered
                  to and accepted by the Lessee under the relevant Lease and to and
                  by the
                  Time Charterer under the relevant Time Charter for that
                  Ship;

              

      

       

      
        	
                7.3.2  

              	
                Employment:
                  other than pursuant to the relevant Lease and the relevant Time
                  Charter,
                  the relevant Ship will not on its Delivery Date be subject to any
                  charter
                  or contract or to any agreement to enter into any charter or contract
                  and
                  there will not on such Delivery Date be any agreement or arrangement
                  whereby the Earnings of such Ship may be shared with any other
                  person;

              

      

       

      
        	
                7.3.3  

              	
                Freedom
                  from Encumbrances: none of the relevant Ship, its Insurances or
                  Requisition Compensation (or any part thereof), the relevant Lease,
                  the
                  relevant Time Charter nor the rights of the Lessor or the Lessee
                  thereunder will on the Delivery Date of the Ship be subject to
                  any
                  Encumbrance other than Permitted Encumbrances and any Encumbrances
                  arising
                  in favour of the Time Charterer under the terms of the relevant
                  Time
                  Charter;

              

      

       

      
        	
                7.3.4  

              	
                Consents
                  obtained: every consent, authorisation, licence or approval of,
                  or registration with or declaration to, governmental or public
                  bodies or
                  authorities or courts required by any of the Borrowers (and considered
                  by
                  the Facility Agent to be material) to authorise, or required by
                  any of the
                  Borrowers in connection with, the execution, delivery, validity,
                  enforceability or admissibility in evidence of any of the Security
                  Documents to which any of the Borrowers are a party or the performance
                  by
                  any Borrower of its obligations under the Security Documents has
                  been
                  obtained or made and is in full force and effect and there has
                  been no
                  default in the observance of any condition or restriction (if any)
                  imposed
                  in, or in connection with, any of the same which the Facility Agent
                  considers to be material.

              

      

       

      
        	
                7.4  

              	
                Repetition
                  of representations and
                  warranties

              

      

       

      On
        and as
        of each Drawdown Date and (except in relation to the representations and
        warranties in clause 7.2) on each Interest Payment Date the Borrowers shall
        be deemed to repeat the representations and warranties in clauses 7.1 and
        7.2 as if made with reference to the facts and circumstances existing on
        such
        day.

       

      
        	
                7.5  

              	
                Legal
                  qualifications

              

      

       

      As
        regards the representations and warranties set out in clauses 7.1.1 to 7.1.7, 7.2.1,
7.2.4
        and 7.2.12 to the extent that the subject matter of those
        representations and warranties is within the scope of any legal opinion provided
        to the Finance Parties, such representations and warranties shall be qualified
        by reference to any qualification, reservation or exception as to matters
        of law
        contained in such legal opinions but excluding any assumptions or references
        to
        matters of fact.

       

      
        	
                8  

              	
                Undertakings

              

      

       

      
        	
                8.1  

              	
                General

              

      

       

      The
        Borrowers undertake with each of the Finance Parties that throughout the
        Security Period and while all or any part of the Commitments remains
        outstanding, they will:

       

      
        	
                8.1.1  

              	
                Notice
                  of Default: promptly upon becoming aware of the same inform the
                  Facility Agent of any occurrence which might adversely affect the
                  ability
                  of any Security Party to perform their obligations under any of
                  the
                  Security Documents and, without limiting the generality of the
                  foregoing:

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (a)  

              	
                will
                  inform the Facility Agent of any Default forthwith upon becoming
                  aware
                  thereof;

              

      

       

      
        	
                (b)  

              	
                will
                  from time to time, if so requested by the Facility Agent, confirm
                  to the
                  Facility Agent in writing that, save as otherwise stated in such
                  confirmation, no Default has occurred and is
                  continuing;

              

      

       

      
        	
                (c)  

              	
                will
                  inform the Facility Agent of any default by the Lessee in the performance
                  of its obligations under a Lease or of any Lease Event of
                  Default;

              

      

       

      
        	
                (d)  

              	
                will
                  inform the Facility Agent of any Mandatory Prepayment Event (as
                  defined in
                  each Lease); and

              

      

       

      
        	
                (e)  

              	
                will
                  procure that the Lessee will provide to the Facility Agent copies
                  of any
                  notices which the Lessee receives pursuant to clause 18 of any
                  Lease;

              

      

       

      
        	
                8.1.2  

              	
                Consents
                  and licences: without prejudice to clause 7.1 and 9, obtain
                  or cause to be obtained, maintain in full force and effect and
                  comply in
                  all material respects with the conditions and restrictions (if
                  any)
                  imposed in, or in connection with, every consent, authorisation,
                  licence
                  or approval of governmental or public bodies or authorities or
                  courts and
                  do, or cause to be done, all other acts and things which may from
                  time to
                  time be necessary or desirable under applicable law for the continued
                  due
                  performance of all the obligations of the Security Parties under
                  each of
                  the Security Documents;

              

      

       

      
        	
                8.1.3  

              	
                Use
                  of proceeds: use each Advance exclusively for the purpose
                  specified in clause 1.1;

              

      

       

      
        	
                8.1.4  

              	
                Pari
                  passu: ensure that their obligations under this Agreement shall,
                  without prejudice to the provisions of clause 8.2, at all times rank
                  at least pari passu with all its other present and future unsecured
                  and
                  unsubordinated Indebtedness with the exception of any obligations
                  which
                  are mandatorily preferred by law and not solely by
                  contract;

              

      

       

      
        	
                8.1.5  

              	
                Provision
                  of further information: provide the Facility Agent with such
                  additional financial and other information concerning any Borrower,
                  the
                  other Security Parties and their respective affairs as the Facility
                  Agent
                  or any Lender (acting through the Facility Agent) may from time
                  to time
                  reasonably require (but for the avoidance of doubt there shall
                  be no
                  requirement for audited financial statements for any of the
                  Borrowers);

              

      

       

      
        	
                8.1.6  

              	
                Employment
                  of the Ships: in respect of a Ship which is no longer chartered
                  to the Time Charterer and if this is requested by any Lender, within
                  thirty (30) days of the end of each accounting year, provide the
                  Facility
                  Agent with a written report on the employment record of such Ship
                  over
                  that year;

              

      

       

      
        	
                8.1.7  

              	
                Obligations
                  under Transaction Documents: duly and punctually perform each of
                  the obligations expressed to be assumed by them under the Transaction
                  Documents;

              

      

       

      
        	
                8.1.8  

              	
                Compliance
                  with ISM Code: procure that any Operator will, comply with and
                  ensure that the Mortgaged Ships and any Operator comply with the
                  requirements of the ISM Code, including (but not limited to) the
                  maintenance and renewal of valid certificates pursuant thereto
                  throughout
                  the Security Period (as defined in the relevant
                  Mortgage);

              

      

       

      
        	
                8.1.9  

              	
                Compliance
                  with ISPS Code: procure that any Operator will comply with and
                  ensure that the Mortgaged Ships and any Operator will comply with
                  the
                  requirements of the ISPS Code and with specifications of the International
                  Maritime Organisation, and any other regulations, either existing
                  or
                  future, of the International Maritime Authority and the European
                  Union;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.1.10  

              	
                Issuance
                  of DOC and SMC: procure that upon any change of Operator of any
                  of the Ships, such Operator will promptly inform the Facility Agent
                  and
                  deliver to the Facility Agent a certified true copy of the relevant
                  DOC
                  and SMC; and

              

      

       

      
        	
                8.1.11  

              	
                Withdrawal
                  of certificates: procure that any Operator will, immediately
                  inform the Facility Agent if there is any threatened or actual
                  withdrawal
                  of a DOC or the SMC in respect of any of the Mortgaged Ships or
                  any
                  certification required in order for it, any Operator and the Mortgaged
                  Ship to comply with the ISPS Code.

              

      

       

      
        	
                8.2  

              	
                Security
                  value maintenance

              

      

       

      
        	
                8.2.1  

              	
                Security
                  shortfall: If at any time in respect of any of the Ships, (i) the
                  Security Value shall be less than the Security Requirement and
                  (ii) the RG
                  Security Value shall be less than the RG Security Requirement,
                  the
                  Facility Agent acting on the instructions of the Majority Lenders
                  may give
                  notice to the Borrowers requiring that such deficiency be remedied
                  and
                  then the Borrowers shall either:

              

      

       

      
        	
                (a)  

              	
                prepay
                  within a period of twenty (20) Banking Days of the date of receipt
                  by the
                  Borrowers of the Facility Agent’s said notice such sum in Dollars as will
                  result in (taking into account any other repayment of the Loan
                  made
                  between the date of the notice and the date of such prepayment)
                  (i) the
                  Security Value after such prepayment being equal to or greater
                  than the
                  Security Requirement and/or, as the case may be (ii) the RG Security
                  Value
                  after such prepayment being equal to or greater than the RG Security
                  Requirement; or

              

      

       

      
        	
                (b)  

              	
                within
                  twenty (20) Banking Days of the date of receipt by the Borrowers
                  of the
                  Facility Agent’s said notice, constitute to the satisfaction of the
                  Majority Lenders such further security (in the form of an Encumbrance)
                  for
                  the Loan as shall be acceptable to the Majority Lenders having
                  a value for
                  security purposes (as determined by the Majority Lenders in their
                  absolute
                  discretion) at the date upon which such further security shall
                  be
                  constituted which, (i) when added to the Security Value, shall
                  not be less
                  than the Security Requirement as at such date and/or, as the case
                  may be,
                  (ii) when added to the RG Security Value, shall not be less than
                  the RG
                  Security Requirement as at such
                  date.

              

      

       

      The
        provisions of clause 4.6 shall apply to prepayments under
        clause 8.2.1(a).

       

      
        	
                8.2.2  

              	
                Valuation
                  of Ships: Each Mortgaged Ship shall, for the purposes of this
                  clause, be valued in Dollars for the first time at its Delivery
                  Date and
                  thereafter as at each anniversary of the Delivery Advance for the
                  relevant
                  Ship Tranche relating to such Mortgaged Ship in each year. Notwithstanding
                  the foregoing the Facility Agent, acting on the instructions of
                  the
                  Majority Lenders, shall be entitled to require a valuation of any
                  one or
                  more of the Ships at any other time if the Majority Lenders reasonably
                  believe that either (a) there has been a material change in the
                  second
                  hand market for similar ships or (b) it is appropriate that a valuation
                  of
                  a Ship be made on the basis of a physical inspection. On each occasion
                  that the value of the Ship is required to be determined, the Facility
                  Agent shall nominate two Approved Shipbrokers to make valuations
                  without
                  physical inspection (unless required by the Majority Lenders) and
                  on the
                  basis of a sale for prompt delivery for cash at arms length on
                  normal
                  commercial terms as between a willing buyer and a willing seller
                  and:

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (a)  

              	
                for
                  the purposes of determining the Security Value, without taking
                  into
                  account the benefit of, or any detriment caused by, the relevant
                  Time
                  Charter or any other charterparty or other engagement concerning
                  the
                  relevant Ship; and

              

      

       

      
        	
                (b)  

              	
                for
                  the purposes of determining the RG Security Value, taking into
                  account the
                  benefit of or any detriment caused by the relevant Time Charter
                  in
                  accordance with the RG Value
                  Principles.

              

      

       

      The
        Facility Agent shall then calculate the average of each pair of valuations
        and
        such average shall be the valuation used for the purpose of determining the
        Security Value and the RG Security Value. The Facility Agent shall provide
        the
        Borrowers and each Lender with a copy of any valuation obtained by it. In
        respect of any request for a valuation under this clause 8.2.2, the
        Borrowers shall use reasonable efforts to facilitate any required physical
        inspection as soon as practicable after the relevant request.

       

      Where
        the
        Borrowers disagree with valuations in respect of a Ship provided by either
        of
        the two appointed Approved Shipbrokers, the Borrowers shall notify the Facility
        Agent in writing of such disagreement.  The Borrowers may thereafter
        instruct a third Approved Shipbroker to make a third valuation in respect
        of
        either or both of the Security Value and the RG Security Value of such Ship
        in
        accordance with the principles set out above in this
        clause 8.2.2.  The Facility Agent shall then calculate the
        average of each set of valuations and such average shall be the valuation
        used
        for the purpose of determining the Security Value and the RG Security
        Value.

       

      The
        most
        recent relevant valuation determined in accordance with the provisions of
        this
        clause 8.2 shall constitute the market value of the relevant Ship for the
        purposes of this Agreement and shall be binding upon the parties hereto until
        such time as any further such valuations shall be obtained.

       

      For
        the
        purposes of this clause, the “RG Value Principles” shall be as
        follows:

       

      the
        value
        of the benefit of, or detriment caused by, the relevant Time Charter shall
        be
        calculated as the net present value of the difference between such Time Charter
        and other comparable and recently fixed time charters of an equivalent duration
        as the relevant Time Charter for ships of an equivalent age and type to the
        relevant Ship and for comparable projects in the market; and

       

      the
        net
        present value of the difference in the time charter incomes in (a) above,
        shall
        be calculated using a discount rate of four point eight nine per cent. (4.89%)
        with rests at three (3) monthly intervals during the relevant period of
        calculation.

       

      
        	
                8.2.3  

              	
                Information:
                  The Borrowers undertake with the Finance Parties to supply to the
                  Facility
                  Agent and to any Approved Shipbrokers such information concerning
                  the
                  Ships and their condition as such Approved Shipbrokers may reasonably
                  require for the purpose of making any such
                  valuation.

              

      

       

      
        	
                8.2.4  

              	
                Costs:
                  All costs in connection with the Facility Agent or, as the case
                  may be,
                  the Borrowers obtaining any valuation of any of the Ships referred
                  to in
                  clause 8.2.2, and any valuation either of any additional security for
                  the purposes of ascertaining the Security Value and the RG Security
                  Value
                  at any time or necessitated by the Borrowers electing to constitute
                  additional security pursuant to clause 8.2.1(b), shall be borne by
                  the Borrowers.

              

      

       

      
        	
                8.2.5  

              	
                Valuation
                  of additional security: For the purpose of this clause 8.2,
                  the market value of any additional security provided or to be provided
                  to
                  the Lenders shall be determined by the Facility Agent, acting on
                  the
                  instructions of the Majority Lenders in their absolute discretion,
                  without
                  any necessity for the Majority Lenders assigning any reason
                  thereto.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.2.6  

              	
                Documents
                  and evidence: In connection with any additional security provided
                  in accordance with this clause 8.2, the Facility Agent shall be
                  entitled to (and shall if so requested by the Majority Lenders)
                  require
                  the Borrowers to provide such evidence and documents of the kind
                  referred
                  to in Schedule 4 that it believes are appropriate (or which it has
                  been so required to request) and such favourable legal opinions
                  as the
                  Facility Agent shall in its absolute discretion
                  require.

              

      

       

      
        	
                8.2.7  

              	
                Release
                  of Additional Security: Where additional security has been
                  constituted by the Borrowers to the satisfaction of the Majority
                  Lenders
                  under clause 8.2.1(b), if at any time thereafter either (a) the
                  Security Value less the market value of such additional security
                  (as
                  determined in accordance with clause 8.2.5) is equal to or more than
                  the Security Requirement or (b) the RG Security Value less the
                  market
                  value of such additional security (as determined in accordance
                  with
                  clause 8.2.5) is equal to or more than the RG Security Requirement,
                  the Borrowers shall be entitled to notify the Facility Agent and
                  as soon
                  as practicable following receipt of that notice and subject to
                  the
                  Facility Agent being indemnified to its satisfaction against the
                  cost of
                  doing so and also being of the opinion that the requirements referred
                  to
                  in (a) or (b) above are satisfied, the Facility Agent and/or, as
                  the case
                  may be, the Security Trustee shall release any such additional
                  security.

              

      

       

      
        	
                8.3  

              	
                Negative
                  undertakings

              

      

       

      Each
        of
        the Borrowers undertakes with each of the Finance Parties that throughout
        the
        Security Period and while all or any part of the Commitments remains
        outstanding, it will not, without the prior written consent of the Facility
        Agent acting on the instructions of the Majority Lenders:

       

      
        	
                8.3.1  

              	
                No
                  merger

              

      

       

      enter
        into any amalgamation, demerger, merger or corporate reconstruction;
        or

       

      
        	
                8.3.2  

              	
                Other
                  business

              

      

       

      undertake
        any business other than entering into the Transaction Documents to which
        it is a
        party and performing its obligations and exercising its rights under and
        pursuant to the Transaction Documents; or

       

      
        	
                8.3.3  

              	
                Negative
                  pledge

              

      

       

      permit
        any Encumbrance (other than a Permitted Encumbrance) to subsist, arise or
        be
        created or extended over all or any part of its present or future undertakings,
        assets, rights or revenues; or

       

      
        	
                8.3.4  

              	
                Disposals

              

      

       

      sell,
        transfer, abandon, lend or otherwise dispose of or cease to exercise direct
        control over any part of its present or future undertaking, assets, rights
        or
        revenues whether by one or a series of transactions related or not except
        in
        respect of any Intra-Group Transactions, but subject to clauses 8.3.14 and 8.3.15;
        or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.3.5  

              	
                Acquisitions

              

      

       

      acquire
        any further assets other than the rights arising under contracts entered
        into by
        or on behalf of such Borrower in the ordinary course of its business of
        performing its obligations and exercising its rights under and pursuant to
        the
        Transaction Documents except in respect of any Intra-Group Transactions,
        but
        subject to clauses 8.3.14 and 8.3.15; or

       

      
        	
                8.3.6  

              	
                Other
                  obligations

              

      

       

      incur
        any
        obligations except for obligations arising in respect of any Intra-Group
        Transactions, but subject to clauses 8.3.14
        and 8.3.15, or under the relevant Transaction
        Documents or contracts entered into in the ordinary course of its business
        of
        performing its obligations and exercising its rights under and pursuant to
        the
        Transaction Documents; or

       

      
        	
                8.3.7  

              	
                No
                  borrowing

              

      

       

      incur
        any
        Borrowed Money except for Borrowed Money pursuant to the Security Documents
        and,
        subject to clauses 8.3.14 and 8.3.15, in respect
        of any Intra-Group Transactions;
        or

       

      
        	
                8.3.8  

              	
                Repayment
                  of borrowings

              

      

       

      repay
        the
        principal of, or pay interest on or any other sum in connection with any
        of its
        Borrowed Money except for Borrowed Money pursuant to the Security Documents
        and,
        subject to clause 8.3.14, in respect of any
        Intra-Group Transactions; or

       

      
        	
                8.3.9  

              	
                Guarantees

              

      

       

      issue
        any
        guarantee or indemnity or otherwise become directly or contingently liable
        for
        the obligations of any person, firm, or corporation except pursuant to the
        Security Documents and except for guarantees or indemnities from time to
        time
        required in the ordinary course by any protection and indemnity or war risks
        association with which the relevant Ship is entered, guarantees required
        to
        procure the release of the relevant Ship from any arrest, detention, attachment
        or levy or guarantees or undertakings required for the salvage of the relevant
        Ship; or

       

      
        	
                8.3.10  

              	
                Loans

              

      

       

      make
        any
        loans or grant any credit (save for normal trade credit in the ordinary course
        of business and, subject to clauses 8.3.14 and 8.3.15, in respect
        of any Intra-Group Transactions) to
        any person or agree to do so; or

       

      
        	
                8.3.11  

              	
                Sureties

              

      

       

      permit
        any Indebtedness of such Borrower to any person (other than the Finance Parties)
        to be guaranteed by any person (save for guarantees or indemnities from time
        to
        time required in the ordinary course by any protection and indemnity or war
        risks association with which the relevant Ship is entered, guarantees required
        to procure the release of the relevant Ship from any arrest, detention,
        attachment or levy or guarantees or undertakings required for the salvage
        of the
        relevant Ship or guarantees of trade debt incurred by a Borrower in the ordinary
        course of business); or

       

      
        	
                8.3.12  

              	
                Share
                  capital and distribution

              

      

       

      purchase
        or otherwise acquire for value any shares of its capital; or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.3.13  

              	
                Subsidiaries

              

      

       

      form
        or
        acquire any Subsidiaries; or

       

      
        	
                8.3.14  

              	
                Inter-company
                  loan

              

      

       

      following
        the issue of a notice under clause 10.2 or a demand
        under any of the Security Documents in respect of the whole of the
        Loan:

       

      
        	
                (a)  

              	
                demand
                  or accept repayment in whole or in part of any Indebtedness now
                  or
                  hereafter due to any of the Borrowers from any of the other Security
                  Parties or take any step to enforce any right against any of the
                  other
                  Security Parties or in respect of any such Indebtedness;
                  or

              

      

       

      
        	
                (b)  

              	
                claim
                  any set-off or counterclaim against any of the other Security Parties
                  or
                  claim or prove in competition with any of the Finance Parties in
                  the
                  liquidation of any of the other Security Parties or have the benefit
                  of,
                  or share in, any payment from or composition with, any of the other
                  Security Parties but, if so directed by the Facility Agent, they
                  will
                  prove for the whole or part of their claims in the liquidation
                  of such of
                  the other Security Parties on terms that the benefit of such proof
                  and of
                  all money received by them in respect thereof shall be held on
                  trust for
                  the Facility Agent and applied in or towards discharge of the Loan
                  and all
                  other amounts due and owing by the Borrowers under the Security
                  Documents
                  in such manner as the Facility Agent shall deem appropriate;
                  or

              

      

       

      
        	
                8.3.15  

              	
                Borrowers/Lessee
                  inter-company arrangements

              

      

       

      amend
        or
        agree to amend the provisions and documents governing the credit support
        and
        hedge arrangements between the Borrowers and the Lessee as described in the
        summary provided or to be provided under paragraph 15 of Part 1 of Schedule
        4
        where the amendments would have a material effect on any of the Finance Parties
        but any consent required of the Facility Agent acting on the instructions
        of the
        Majority Lenders in relation to the matters covered under this clause 8.3.15 shall not be unreasonably
        withheld.

       

      
        	
                8.4  

              	
                Ship
                  covenants - pre-delivery

              

      

       

      Each
        of
        the Borrowers hereby covenants with each of the Finance Parties and undertakes
        throughout the Security Period that it will:

       

      
        	
                8.4.1  

              	
                procure
                  that the Supervisor will duly and punctually observe and perform
                  all the
                  conditions and obligations imposed on it by the relevant Shipbuilding
                  Contract (as agent of the Lessor) and relevant Supervision
                  Agreement;

              

      

       

      
        	
                8.4.2  

              	
                procure
                  that the Supervisor (as agent of the Lessor) will use its reasonable
                  endeavours to ensure that the Builder observes and performs all
                  conditions
                  and obligations imposed on it by the relevant Shipbuilding Contract
                  and
                  take all reasonable steps within its power to ensure that the Builder
                  proceeds with the construction of the relevant Ship with due diligence
                  and
                  despatch and will promptly notify the Facility Agent of any default
                  by the
                  Builder upon becoming aware
                  thereof;

              

      

       

      
        	
                8.4.3  

              	
                upon
                  the request of the Facility Agent, procure that the Supervisor
                  will advise
                  the Facility Agent of the progress of construction of each Ship
                  and supply
                  the Facility Agent with such other information as the Facility
                  Agent may
                  reasonably require regarding the Ships and the materials allocated
                  or
                  appropriated to the Ships;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.4.4  

              	
                in
                  the event that the Builder and/or the Lessor (or the Supervisor
                  as agent
                  of the Lessor) resorts to litigation as provided in Article 14 of
                  each of the Shipbuilding Contracts, procure that the Supervisor
                  both
                  immediately notifies the Facility Agent in writing that such litigation
                  has been initiated and upon termination of the litigation process
                  also
                  notifies the Facility Agent in writing to that effect and supplies
                  the
                  Facility Agent with a copy of the court
                  judgment;

              

      

       

      
        	
                8.4.5  

              	
                where
                  a Ship is (or is to be) sold in exercise of any power contained
                  in the
                  relevant Lessor Assignment, Lessee Assignment or Replacement Purchaser
                  Assignment or otherwise conferred on the Facility Agent, procure
                  that the
                  Supervisor uses all reasonable endeavours to procure that the Lessor
                  executes or procures that the Replacement Purchaser executes, forthwith
                  upon request by the Facility Agent, such form of conveyance of
                  such Ship
                  as the Facility Agent may require;

              

      

       

      
        	
                8.4.6  

              	
                procure
                  that the Supervisor and, where applicable, the Replacement Purchaser
                  does
                  or permits to be done each and every act or thing which the Security
                  Trustee may from time to time reasonably require to be done for
                  the
                  purpose of enforcing the Security Trustee’s rights in respect of the
                  Shipbuilding Contracts and the Refund Guarantees under or pursuant
                  to the
                  Lessor Assignments, the Lessee Assignments and the Replacement
                  Purchaser
                  Assignments and, upon the occurrence of an Event of Default which
                  is
                  continuing, procure that the Supervisor uses all reasonable endeavours
                  to
                  allow the name of the Lessor to be used as and when required by
                  the
                  Security Trustee for that purpose;

              

      

       

      
        	
                8.4.7  

              	
                notifies
                  the Facility Agent promptly if:

              

      

       

      
        	
                (a)  

              	
                the
                  Supervisor receives any notice of a delay on account of which the
                  Builder
                  claims that it is entitled under a Shipbuilding Contract to a postponement
                  of the Delivery Date for the relevant Ship from the Builder under
                  Article 9.3 of the relevant Shipbuilding Contract (and at the time of
                  notifying the Facility Agent will also provide the Facility Agent
                  with a
                  copy of such notice and accompanying supporting documents);
                  or

              

      

       

      
        	
                (b)  

              	
                the
                  Builder or (with the prior written consent of the Facility Agent,
                  acting
                  on the instructions of the Majority Lenders given pursuant to
                  clause 8.4.14) the Supervisor (as agent
                  of the Lessor) and/or the Lessor rejects a Ship or the Lessor or
                  the
                  Supervisor (as agent of the Lessor) cancels, rescinds, repudiates
                  or
                  otherwise terminates any of the Shipbuilding Contracts or the Refund
                  Guarantees or purports to do so or if a Ship shall become a Total
                  Loss or
                  shall be damaged and the repair or reinstatement cost of such damage
                  exceeds or is likely to exceed the Casualty
                  Amount;

              

      

       

      
        	
                8.4.8  

              	
                procure
                  the execution by the Lessee and the Lessor and the registration
                  of the
                  Mortgage and the Mortgage Transfer respectively in respect of each
                  Ship
                  under the laws and flag of the Flag State immediately upon its
                  Delivery;

              

      

       

      
        	
                8.4.9  

              	
                not
                  agree and procure that there is no agreement, without the prior
                  written
                  consent of the Facility Agent acting on the instructions of the
                  Majority
                  Lenders (each Lender acting reasonably), to any variation of any
                  Refund
                  Guarantee or to any release of any Refund Guarantor from any of
                  its
                  obligations thereunder or to any waiver of any breach of a Refund
                  Guarantor's obligations thereunder or consent to any such act or
                  omission
                  of a Refund Guarantor as would otherwise constitute such
                  breach;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.4.10  

              	
                ensure
                  that no Ship is registered in the name of the Lessor other than
                  in
                  satisfaction of the conditions precedent in Part 4 of Schedule 4
                  without the prior written consent of the Facility Agent acting
                  on the
                  instructions of the Majority
                  Lenders;

              

      

       

      
        	
                8.4.11  

              	
                procure
                  that the Supervisor notifies the Facility Agent of any amendment
                  to a
                  Shipbuilding Contract and provides the Facility Agent with evidence
                  of the
                  Time Charterer’s consent to any such amendment and procure that there is
                  not, without the prior written consent of the Facility Agent acting
                  on the
                  instructions of the Majority Lenders (each Lender acting reasonably)
                  (a)
                  any variation of a Shipbuilding Contract or any material variation
                  of the
                  specification (but excluding for this purpose variations of the
                  specification that are required by the Time Charterer under the
                  terms of
                  clause 1(f)(4) of the relevant Time Charter, which shall not require
                  such consent) of a Ship (and for the purpose of this paragraph any
                  extras, additions or alterations which the Lessor or the Supervisor
                  (as
                  agent of the Lessor) may desire to effect in the building of a
                  Ship shall
                  be deemed to constitute a material variation if the cost thereof
                  (which
                  shall in every case be agreed in writing between the Lessor and/or
                  the
                  Supervisor and the Builder before the work is put in hand irrespective
                  of
                  whether the prior consent thereto of the Facility Agent be required
                  hereunder) or if the aggregate cost of the proposed work, together
                  with
                  the cost of any work already ordered, will alter the Contract Price
                  for
                  such Ship by an amount greater than two per cent. (2%) of the Contract
                  Price) or (b) any release of the Builder from any of its obligations
                  under
                  a Shipbuilding Contract or any waiver of any breach of the Builder's
                  obligations thereunder or any consent to any such act or omission
                  of the
                  Builder as would otherwise constitute such
                  breach;

              

      

       

      
        	
                8.4.12  

              	
                not
                  agree and procure that there is no agreement, without the prior
                  written
                  consent of the Facility Agent acting on the instructions of the
                  Majority
                  Lenders (each Lender acting reasonably) and without prejudice to
                  clause 8.4.11, to any variation of a Shipbuilding
                  Contract or specification of a Ship which would delay the time
                  for
                  delivery of such Ship by more than an aggregate of thirty (30)
                  days unless
                  such variation is required by the Time Charterer under the terms
                  of the
                  relevant Time Charter.

              

      

       

      
        	
                8.4.13  

              	
                not
                  agree and procure that there is no agreement, without the prior
                  written
                  consent of the Facility Agent acting on the instructions of the
                  Majority
                  Lenders, to any reconstruction and/or repair of a Ship following
                  a Total
                  Loss;

              

      

       

      
        	
                8.4.14  

              	
                not
                  agree and procure that there is no agreement, without the prior
                  written
                  consent of the Facility Agent acting on the instructions of the
                  Majority
                  Lenders (each Lender acting reasonably) but subject always to the
                  obligations of the Lessee and the rights of the Time Charterer
                  under
                  clause 1(g) of the relevant Time Charter, to the exercise, or failure
                  to exercise, of any right which the Lessor and/or the Supervisor
                  may have
                  to reject a Ship or to cancel or rescind or otherwise terminate
                  a
                  Shipbuilding Contract, provided always that any such rejection
                  of a Ship
                  or cancellation, rescission or other termination of a Shipbuilding
                  Contract by the Lessor or the Supervisor (as the agent of the
                  Lessor)  after such consent is given shall be without
                  responsibility on the part of any Finance Party who shall be under
                  no
                  liability whatsoever to the extent that such rejection, rescission,
                  cancellation or termination is thereafter adjudged to constitute
                  a
                  repudiation or other breach of such Shipbuilding Contract by the
                  Lessor;
                  and

              

      

       

      
        	
                8.4.15  

              	
                procure
                  that the Supervisor will keep the Facility Agent regularly informed
                  of the
                  likely delivery date for each Ship and copy to the Facility Agent
                  any
                  notices received from the Builder pursuant to the last sentence
                  of
                  article 2.3 or under article 6.2 of the Shipbuilding Contract
                  for each Ship.

              

      

       

      
        	
                8.5  

              	
                Insurance
                  covenants

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.5.1  

              	
                Insurance:

              

      

       

      Each
        of the Borrowers hereby covenants with each of the Finance
        Parties and undertakes throughout the Security Period that it will procure
        that
        the Lessee will:

       

      
        	
                (a)  

              	
                Insured
                  risks, amounts
                  andterms: effect and
                  maintain (and/or procure that there is effected and maintained)
                  from the
                  Delivery Date of each Mortgaged Ship and throughout the Security
                  Period,
                  at its cost and expense, Insurances covering physical loss and/or
                  damage
                  and liabilities to crew, cargo and third parties interests of,
                  or in
                  connection with, each Mortgaged Ship on terms, conditions, and
                  insured
                  values as expressly required by the Facility Agent and further
                  described
                  below. Such Insurances shall be effected through the Approved Broker
                  with
                  or directly by the Lessee or another member of the Teekay Guarantor
                  Group,
                  with a first class underwriter or group of underwriters, insurance
                  companies and associations approved, such approval not to be unreasonably
                  withheld or delayed, by the Facility Agent and underwritten a full
                  one
                  hundred per cent. (100%) by such approved insurers. Following the
                  Delivery
                  Date of

              

      

       

      
        	
                 

              	
                each
                  Mortgaged Ship, unless and until otherwise approved in writing
                  by the
                  Facility Agent, the Insurances required by and acceptable to it
                  will
                  be:

              

      

       

      
        	
                (i)  

              	
                hull
                  and machinery insurances:

              

      

       

      
        	
                (A)  

              	
                on
                  full conditions as wide as the Institute Time Clauses Hull (1/11/95),
                  or American Institute Hull Clauses (June 2 1977), or Norwegian Marine
                  Insurance Plan of 1999, or French Maritime Clause dated 1st January
                  1998 as updated and amended;

              

      

       

      
        	
                (B)  

              	
                on
                  an agreed value basis for an amount of at least one hundred and
                  ten per
                  cent. (110%) of the Relevant Insured Amount;
                  and

              

      

       

      
        	
                (C)  

              	
                deductible
                  amounts in respect of each Mortgaged Ship shall not exceed seven
                  hundred
                  and fifty thousand Dollars ($750,000) or such higher amount as
                  the Lenders
                  may agree (such agreement not to be unreasonably
                  withheld);

              

      

       

      
        	
                (ii)  

              	
                increased
                  value (total loss only, including excess liabilities)
                  insurance:

              

      

       

      
        	
                (A)  

              	
                on
                  full conditions as wide as the Institute Time Clauses Hulls
                  Disbursements and Increased Value (1/10/83), or American Institute
                  Increased Value and Excess Liabilities Clauses (November 3, 1977), or
                  the equivalent under the Norwegian Marine Insurance Plan of 1999
                  or French
                  Maritime Clause dated 1st January 1998;
                  and

              

      

       

      
        	
                (B)  

              	
                on
                  an agreed value basis for a maximum insured amount of at least
                  one hundred
                  and ten per cent. (110%) of the Relevant Insured Amount,
                  and

              

      

       

      it
        is
        understood that for the purpose of determining the compliance of the agreed
        value with the requirements of sub-clauses 8.5.1(a)(i) and 8.5.1(a)(ii),
        the total of the agreed values of each insurance will be aggregated. For
        the
        purpose of clarification, it is also agreed that the amount insured under
        the
        increased value insurance shall be a maximum of twenty five per cent. (25%)
        of
        this total amount;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (iii)  

              	
                war
                  risk insurance:

              

      

       

      
        	
                (A)  

              	
                on
                  full conditions as wide as the Institute War and Strikes
                  Clauses Hulls-Time or French War Risks Clause, including the London
                  Blocking and Trapping Clause (LPO
                  444);

              

      

       

      
        	
                (B)  

              	
                on
                  an agreed value basis for an amount of at least one hundred and
                  ten per
                  cent. (110%) of the Relevant Insured Amount;
                  and

              

      

       

      
        	
                (C)  

              	
                a
                  full protection and indemnity insurance will cover war risks through
                  an
                  endorsement of this policy for the minimum of the agreed value
                  of the
                  Mortgaged Ship;

              

      

       

      
        	
                (iv)  

              	
                a
                  full protection and indemnity
                  insurance:

              

      

       

      
        	
                (A)  

              	
                on
                  terms and conditions as per the rules of a mutual association that
                  is a
                  member of the International Group of Protection and Indemnity Associations
                  and acceptable to the Facility
                  Agent;

              

      

       

      
        	
                (B)  

              	
                such
                  cover to provide maximum liability cover any one accident or occurrence
                  permitted by the association, excepting oil pollution which will
                  have to
                  be covered for a minimum of one billion Dollars
                  ($1,000,000,000);

              

      

       

      
        	
                (C)  

              	
                war
                  risks will also be covered through an excess cover for the maximum
                  amount
                  offered from time to time by the association;
                  and

              

      

       

      
        	
                (D)  

              	
                the
                  Lessee, together with any manager and/or its/their agents, shall
                  be named
                  as full member/joint member of the association for each class of
                  cover
                  under the protection and indemnity
                  insurance;

              

      

       

      
        	
                (v)  

              	
                any
                  additional Insurances, including but not limited to protection
                  and
                  indemnity, third party liability cover, which in the reasonable
                  opinion of
                  the Facility Agent might become necessary in case of (A) alteration,
                  reduction or cancellation of the Insurances described in this
                  clause 8.5.1(a), or (B) in case of changing in the navigation areas
                  or use of the Mortgaged Ship as originally forecasted, or (C) any
                  change
                  in laws or decree or navigation rules of any sort which might result
                  in an
                  alteration of the risks and liabilities related to the Mortgaged
                  Ship;
                  and

              

      

       

      
        	
                (vi)  

              	
                notwithstanding
                  anything contained in the hull and machinery wording(s) actually
                  used by
                  the Lessee or any manager, it is understood and agreed that the
                  Insurances
                  referred to in sub-clauses 8.5.1(a)(i) to 8.5.1(a)(iii) above will
                  contain an English law and jurisdiction clause; such clause will be
                  paramount.

              

      

       

      
        	
                (b)  

              	
                Hull
                  policy documents, notices, loss payable clauses and brokers’
                  undertakings, reinsurances: secure the interests of the Finance
                  Parties (acting through the Security Trustee) under each of the
                  Insurances
                  in the following manner:

              

      

       

      
        	
                (i)  

              	
                each
                  of the Insurances referred to in sub-clauses 8.5.1(a)(i) to
                  8.5.1(a)(iii) above, and each of the relevant policies when
                  issued:

              

      

       

      
        	
                (A)  

              	
                shall
                  be endorsed with (1) the notice of assignment in the form attached
                  to
                  schedule 3 to the relevant Proceeds Deed for the Mortgaged Ship, and
                  (2) the relevant loss payable clause in the form attached as
                  schedule 2 to the relevant Proceeds Deed;
                  and

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (B)  

              	
                shall
                  (if it so requests) have the Security Trustee named as an additional
                  insured;

              

      

       

      
        	
                (ii)  

              	
                by
                  procuring the submission to the Facility Agent at least five (5)
                  Banking
                  Days before the Delivery Date of each Ship and seven (7) days before
                  each
                  subsequent renewal of any Insurances of documentary evidence of
                  the
                  Insurances;

              

      

       

      
        	
                (iii)  

              	
                if
                  one or more of the Insurances referred to in sub-clauses 8.5.1(a)(i)
                  to 8.5.1(a)(iii), are not effected and maintained (throughout the
                  term of
                  the relevant insurance policy) with insurers rated at least BBB
                  by
                  Standard and Poors (or equivalent rating by another international
                  rating
                  agency) or with insurers whose obligations are guaranteed by a
                  party or
                  parties acceptable to the Majority Lenders with such minimum rating
                  (for
                  which purpose, where the relevant insurer is Al-Koot Insurance
                  and
                  Reinsurance Limited, so long as it has such minimum rating, Qatar
                  Petroleum shall be deemed to be an acceptable guarantor), the Borrowers
                  shall procure that the Lessee shall procure, at its own expense,
                  that the
                  relevant insurers maintain in full force and effect facultative
                  reinsurances with reinsurers and through brokers, in each case,
                  of
                  recognised standing and acceptable to the Facility Agent
                  that:

              

      

       

      
        	
                (A)  

              	
                are
                  on same terms, conditions, duration, law and jurisdiction and date
                  of
                  renewal as the primary insurances;

              

      

       

      
        	
                (B)  

              	
                are
                  satisfactory in all respects to the Facility
                  Agent;

              

      

       

      
        	
                (C)  

              	
                are,
                  in the case of a captive, for one hundred per cent. (100%) of all
                  risks
                  insured (or the maximum acceptable by local law) and, in any other
                  case,
                  of such percentage of all risks insured as is equal to one hundred
                  and ten
                  per cent. (110%) of the Relevant Insured
                  Amount;

              

      

       

      
        	
                (D)  

              	
                contain
                  a cut-through clause in the terms set out below or otherwise
                  satisfactory to the Facility Agent:

              

      

       

      “The
        reinsurers hereby agree that in the event of any claim arising under the
        reinsurances in respect of a total loss or other claim where, as provided
        by the
        Security Documents, such claim is to be paid to the person named as sole
        loss
        payee under the primary insurances, the reinsurers shall in lieu of payment
        to
        the reassured, its successor in interest and assigns, pay to the person named
        as
        sole loss payee under the primary insurances effected by the Assured that
        portion of any loss due for which the reinsurers would otherwise be liable
        to
        pay the reassured (subject to proof of loss), it being understood and agreed
        that any such payment by the reinsurers shall (to the extent of such payment)
        fully discharge and release the reinsurers from any and all further liability
        in
        connection therewith. Any payment due under this clause shall not
        contravene any law, statute or decree of [name of the insurer
        country].”; and

       

      
        	
                (E)  

              	
                it
                  shall be described and confirmed to the Facility Agent with (1)
                  a copy of
                  the policies when available and a certificate of insurance and,
                  when
                  necessary reinsurance, issued by the Approved Broker including
                  amongst
                  other things the name and percentage underwritten by each insurer
                  and,
                  when necessary reinsurer, and the names of any correspondent broker
                  or
                  underwriting agency involved and (2) shall be further supported
                  by the
                  relevant letter of undertaking to be issued by the approved broker
                  or the
                  approved lead-underwriter or the approved war risks association,
                  as the
                  case may be, in a form approved by the Facility
                  Agent;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (iv)  

              	
                in
                  respect of the protection and indemnity insurance referred to in
                  sub-clause 8.5.1(a)(iv) above:

              

      

       

      
        	
                (A)  

              	
                by
                  having (1) the notice of assignment in the form set attached as
                  schedule 3 to the relevant Proceeds Deed delivered to the mutual
                  association, and (2) the mutual association’s standard loss payable
                  clause in the form as wide as the one attached as schedule 2 to
                  the relevant Proceeds Deed endorsed on the certificate of
                  entry;

              

      

       

      
        	
                (B)  

              	
                if
                  “mis-directed arrow” protection is available from the mutual association,
                  by procuring the mutual association gives the Security Trustee
                  and the
                  Lenders the benefit of such mis-directed arrow protection, in respect
                  of
                  any mis-direct claim brought against one or more of them, with
                  no
                  obligation for any of them to pay the initial or supplementary
                  calls or
                  any sum whatsoever; and

              

      

       

      
        	
                (C)  

              	
                by
                  procuring the delivery to the Facility Agent of (1) the certificate
                  of
                  entry of the Ship in the association when available issued by the
                  association together with the rules book of the association and
                  (2) the
                  standard letter of undertaking issued by the association in its
                  standard
                  form or otherwise in a form approved by the Facility
                  Agent;

              

      

       

      
        	
                (c)  

              	
                Employment
                  of Mortgaged Ships: operate each Mortgaged
                  Ship within the confines of the cover provided by each of the Insurances
                  referred to in paragraph (a) above. In that respect, the Borrowers
                  shall procure that the Lessee and/or any manager,
                  shall:

              

      

       

      
        	
                (i)  

              	
                not
                  make, do, consent or agree to any act or omission which would or
                  could
                  render any such instrument of insurance invalid, void, voidable,
                  or
                  unenforceable or render any sum payable there under repayable in
                  whole or
                  in part;

              

      

       

      
        	
                (ii)  

              	
                pay
                  all premiums, association calls, contributions and/or all other
                  sums
                  payable in respect of the Insurances promptly when due, and produce
                  all
                  relevant receipts when so required by the Facility
                  Agent;

              

      

       

      
        	
                (iii)  

              	
                be
                  responsible for pursuing all claims under the Insurances referred
                  to in
                  sub-clause 8.5.1(a), and take such action as may be necessary to
                  satisfy insurer's enquiries, and simultaneously advise the Facility
                  Agent;
                  and

              

      

       

      
        	
                (iv)  

              	
                arrange
                  for collision and/or salvage guarantee(s) and/or security to be
                  provided
                  to third parties so as to prevent the arrest, or secure the release
                  of the
                  applicable Ship, unless the Facility Agent has given written notice
                  to the
                  contrary; and

              

      

       

      
        	
                (d)  

              	
                Evidence
                  of Oil Pollution and special cover: provide
                  to the Facility Agent copies of (i) all declarations to the protection
                  and
                  indemnity association in which the Ship is entered, (ii) any certificate
                  of financial responsibility (or equivalent certification required
                  in
                  respect of liability insurance cover otherwise than for oil pollution
                  risks) and (iii) all certificates issued by the United States Coast
                  Guard
                  (or other equivalent Governmental Entity), or confirmations by
                  such
                  association in each case in respect of cover for oil pollution
                  risks and
                  such other information and documents relating to oil pollution
                  risks or
                  insurances as the Facility Agent may from time to time reasonably
                  request.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.5.2  

              	
                Independent
                  report: The Facility Agent shall commission an independent firm
                  of insurance consultants to review and report upon the adequacy
                  of the
                  Insurances to be effected and maintained in accordance with
                  clause 8.5.1(a). The Borrowers undertake to procure that the Lessee
                  shall provide or cause the primary insurer or Approved Broker or
                  association manager, as the case may be, to provide all the policies
                  of
                  insurance, rules book of association and any other documents which
                  will be
                  necessary to the Facility Agent and their insurance consultant
                  upon
                  reasonable request by the Facility
                  Agent.

              

      

       

      The
        Facility Agent shall commission such reviews and reports to coincide with
        the
        delivery of a Ship (in satisfaction of the condition precedent in item 8
        of Part
        4 of Schedule 4), for each new policy year and at any other time if there
        is any change in the Insurances or, in the opinion of the Facility Agency,
        a
        change in insurance market practice.

       

      The
        cost
        of each review and report will be borne by the Borrowers and shall (to the
        extent not paid by way of a remittance from the Operating Account) be payable
        by
        the Borrowers to the Facility Agent promptly following receipt by the Borrowers
        of an invoice from the Facility Agent evidencing such costs.

       

      
        	
                8.5.3  

              	
                Additional
                  perils insurances: In addition to the Insurances covenanted by
                  the Borrowers to be effected and maintained by the Lessee under
                  clause 8.5.1(a), the Facility Agent shall (if so instructed by the
                  Majority Lenders) effect and maintain from the Delivery Date of
                  each Ship,
                  throughout the Security Period:

              

      

       

      
        	
                (a)  

              	
                mortgagee’s
                  interest insurance covering all Mortgaged Ships;
                  and

              

      

       

      
        	
                (b)  

              	
                mortgagee’s
                  additional perils (pollution)
                  cover.

              

      

       

      These
        insurances shall be (i) for the exclusive account of the Security Trustee
        (acting on behalf and for the account of the Lenders), (ii) placed by the
        Security Trustee through its own appointed insurance broker and (iii) be
        on
        terms, conditions and insured amounts (being, in respect of each applicable
        Mortgaged Ship, equivalent to one hundred and ten per cent. (110%) of the
        relevant Ship Tranche) acceptable from time to time to the Facility Agent.
        The
        cost of these insurances will be borne by the Borrowers and shall (to the
        extent
        not payable by way of a remittance from the Operating Account) be payable
        by the
        Borrowers to the Facility Agent promptly following receipt by the Borrowers
        of
        an invoice from the Facility Agent evidencing such premium costs.

       

      
        	
                8.5.4  

              	
                Additional
                  covenants in relation to
                  Insurances:

              

      

       

      Each
        of
        the Borrowers hereby covenants with each of the Finance Parties and undertakes
        throughout the Security Period that it will procure that the Lessee
        will:

       

      
        	
                (a)  

              	
                Fleet
                  liens, set-off andcancellation: procure, if any
                  of the insurances referred to in clause 8.5.1 form part of a fleet
                  cover, that the Approved Brokers shall (if so required by the Facility
                  Agent) undertake to the Facility Agent (for the benefit of the
                  Finance
                  Parties) that they shall neither set off against any claims in
                  respect of
                  any Mortgaged Ship any premiums due in respect of other vessels
                  under such
                  fleet cover or any premiums due for other insurances, nor cancel
                  the
                  insurance for reason of non-payment of premiums for other vessels
                  under
                  such fleet cover or of premiums for such other insurances, and
                  shall
                  undertake to issue a separate policy in respect of each Mortgaged
                  Ship;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (b)  

              	
                Payment
                  of premiumsand
                  calls: punctually pay all premiums, calls,
                  contributions or other sums payable in respect of all such insurances
                  and
                  produce all relevant receipts or other evidence of payment when
                  so
                  required by the Facility Agent;

              

      

       

      
        	
                (c)  

              	
                Guarantees: arrange
                  for the execution and delivery of such guarantees or indemnities
                  as may
                  from time to time be required by any protection and indemnity or
                  war risks
                  association;

              

      

       

      
        	
                (d)  

              	
                Extent
                  of cover and exclusions: take all
                  necessary action and comply with all requirements which may from
                  time to
                  time be applicable to the Insurances (including, without limitation,
                  the
                  making of all requisite declarations within any prescribed time
                  limits and
                  the payment of any additional premiums or calls) so as to ensure
                  that the
                  Insurances are not made subject to any exclusions or qualifications
                  to
                  which the Facility Agent has not given its prior written consent
                  and are
                  otherwise maintained on terms and conditions from time to time
                  approved in
                  writing by the Facility Agent;

              

      

       

      
        	
                (e)  

              	
                Collection
                  of claims: do all things necessary and provide all documents,
                  evidence and information to enable the Facility Agent to collect
                  or
                  recover any moneys which shall at any time become due in respect
                  of the
                  Insurances; and

              

      

       

      
        	
                (f)  

              	
                Further
                  insurance assignments: not permit the insurances referred to in
                  clause 8.5.1(a) to be effected in the name of any person (other than
                  the Lessor, the Lessee, the Security Trustee and/or the other Finance
                  Parties) unless such person has to the satisfaction of the Facility
                  Agent
                  executed a first priority assignment in favour of the Security
                  Trustee of
                  such person’s interest in the Insurances of such Mortgaged Ship on similar
                  terms (mutatis mutandis) to the assignment by the Lessee in the
                  relevant
                  Lessee Assignment.

              

      

       

      
        	
                8.6  

              	
                Ship
                  Covenants - post delivery

              

      

       

      Each
        of
        the Borrowers hereby covenants with each of the Finance Parties and undertakes
        with effect from the Delivery Date of each Ship and thereafter throughout
        the
        Security Period (other than in relation to clause 8.6.14 which shall also
        apply during the period prior to the Delivery Date of each Ship) that it
        will or
        will procure that the Lessee or another person will:

       

      
        	
                8.6.1  

              	
                Ship’s
                  name and registration, mortgage
                  registration:

              

      

       

      
        	
                (a)  

              	
                give
                  prompt notice to the Facility Agent upon any change of the name
                  of any
                  Mortgaged Ship;

              

      

       

      
        	
                (b)  

              	
                keep
                  each Mortgaged Ship registered under the laws of its Flag State
                  at the
                  relevant Registry;

              

      

       

      
        	
                (c)  

              	
                not
                  do or suffer to be done anything, or omit to do anything the doing
                  or
                  omission of which could or might result in such registration being
                  forfeited or imperilled or which could or might result in a Mortgaged
                  Ship
                  being required to be registered otherwise than under the laws of
                  its Flag
                  State at the relevant Registry;

              

      

       

      
        	
                (d)  

              	
                not
                  register any Mortgaged Ship or permit its registration under any
                  other
                  flag or at any other port without the prior written consent of
                  the
                  Facility Agent (acting on the instructions of the Majority
                  Lenders);

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (e)  

              	
                if
                  the said registration of a Mortgaged Ship is provisional or for
                  a limited
                  period, procure the permanent registration of the Mortgaged Ship
                  or renew
                  the registration of such Ship at least forty-five (45) days prior
                  to the
                  expiry of such registration and provide evidence of such permanent
                  registration or renewal to the Facility Agent at least thirty (30)
                  days
                  prior to such expiry;

              

      

       

      
        	
                (f)  

              	
                if
                  the registration of the Mortgage on the Mortgaged Ship is provisional
                  or
                  for a limited period procure the permanent registration of the
                  Mortgage as
                  soon as practicable following such provisional or initial registration
                  and
                  in any event at least forty-five (45) days prior to the expiry
                  of such
                  registration and provide evidence of such permanent registration
                  or
                  renewal to the Facility Agent at least thirty (30) days prior to
                  such
                  expiry;

              

      

       

      
        	
                8.6.2  

              	
                Repair:
                  keep each Mortgaged Ship in a good and efficient state of repair
                  and in
                  compliance with the requirements of the relevant Time Charter and
                  procure
                  that all repairs to or replacement of any damaged, worn or lost
                  parts or
                  equipment are effected in such manner (both as regards workmanship
                  and
                  quality of materials) as not to diminish the value of such Mortgaged
                  Ship;

              

      

       

      
        	
                8.6.3  

              	
                Modification;
                  removal of parts; equipment owned by third parties: not without
                  the prior written consent of the Facility Agent (acting on the
                  instructions of the Majority Lenders) suffer any other person
                  to:

              

      

       

      
        	
                (a)  

              	
                make
                  any modification to any Mortgaged Ship in consequence of which
                  her
                  structure, type or performance characteristics could or might be
                  materially altered or her value materially reduced;
                  or

              

      

       

      
        	
                (b)  

              	
                remove
                  any material part of any Mortgaged Ship or any equipment the value
                  of
                  which is such that its removal from such Mortgaged Ship would materially
                  reduce the value of such Mortgaged Ship without replacing the same
                  with
                  equivalent parts or equipment which are owned by the Lessor or
                  the Lessee
                  free from Encumbrances; or

              

      

       

      
        	
                (c)  

              	
                install
                  on any Mortgaged Ship any equipment owned by a third party which
                  cannot be
                  removed without causing damage to the structure or fabric of such
                  Mortgaged Ship,

              

      

       

      except
        where such modifications are required by the terms of the relevant Time Charter,
        in which case the Borrowers shall only be obliged to notify the Facility
        Agent
        and shall not be obliged to obtain the Facility Agent’s prior written
        consent;

       

      
        	
                8.6.4  

              	
                Maintenance of class; compliance with regulations: at
                  all times after Delivery keep each Mortgaged Ship in class and
                  maintain
                  the relevant Classification as the class of each Mortgaged Ship
                  free of
                  all overdue recommendations and comply with and ensure that each
                  Mortgaged
                  Ship at all times complies with all regulations and requirements
                  (statutory or otherwise) from time to time applicable to vessels
                  registered under the laws of its Flag State or otherwise applicable
                  to
                  such Mortgaged Ship;

              

      

       

      
        	
                8.6.5  

              	
                Surveys:
                  submit each Mortgaged Ship to continuous surveys and such periodical
                  or
                  other surveys as may be required for classification purposes and,
                  if so
                  requested by the Facility Agent or if the survey report relates
                  to or
                  recommends or requires repairs and/or other work the cost of which
                  will or
                  is likely to exceed the Casualty Amount, supply to the Facility
                  Agent
                  copies of all survey reports issued in respect
                  thereof;

              

      

       

      
        	
                8.6.6  

              	
                Inspection:
                  ensure that the Facility Agent, by surveyors or other persons appointed
                  by
                  it for such purpose, may board any Mortgaged Ship at all reasonable
                  times
                  without interfering with the operation of such Mortgaged Ship for
                  the
                  purpose of inspecting her and to afford all proper facilities for
                  such
                  inspections;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.6.7  

              	
                Prevention of and release from arrest:
                  promptly in accordance with good ship owning practice pay and discharge
                  all debts, damages, liabilities and outgoings whatsoever which
                  have given
                  or may give rise to maritime, statutory or possessory liens on,
                  or claims
                  enforceable against, each Mortgaged Ship, her Earnings or Insurances
                  or
                  any part thereof and, in the event of a writ or libel being filed
                  against
                  any Mortgaged Ship, her Earnings or Insurances or any part thereof,
                  or of
                  any of the same being arrested, attached or levied upon pursuant
                  to legal
                  process or purported legal process or in the event of detention
                  of any
                  Mortgaged Ship in exercise or purported exercise of any such lien
                  or claim
                  as aforesaid, procure the release of such Mortgaged Ship, her Earnings
                  and
                  Insurances from such arrest, detention attachment or levy or, as
                  the case
                  may be, the discharge of the writ or libel forthwith upon receiving
                  notice
                  thereof by providing bail or procuring the provision of security
                  or
                  otherwise as the circumstances may
                  require;

              

      

       

      
        	
                8.6.8  

              	
                Employment:

              

      

       

      
        	
                (a)  

              	
                subject
                  to the requirements of the Time Charters, not knowingly employ
                  any
                  Mortgaged Ship or permit her employment in any manner, trade or
                  business
                  which is forbidden by international law, or which is unlawful or
                  illicit
                  under the law of any relevant jurisdiction, or in carrying illicit
                  or
                  prohibited goods, or in any manner whatsoever which may render
                  her liable
                  to condemnation in a prize court, or to destruction, seizure,
                  confiscation, penalty or
                  sanctions; and

              

      

       

      
        	
                (b)  

              	
                in
                  the event of hostilities in any part of the world (whether war
                  be declared
                  or not), not employ any Mortgaged Ship or permit her employment
                  in
                  carrying any contraband goods, or enter or trade to or to continue
                  to
                  trade in any zone which has been declared a war zone by any Government
                  Entity or by the relevant Mortgaged Ship’s war risks insurers unless the
                  relevant Mortgaged Ship remains held covered while in that zone
                  whether by
                  insurance then available commercially (by which is meant available
                  from a
                  leading international insurer) or under a relevant government programme
                  (by which is meant an insurance or an indemnity programme on terms
                  acceptable to the Lenders, having regard to the insurance requirements
                  set
                  forth in clause 8.5 of the State of Qatar, any member of the European
                  Union and/or the United States or any other country approved by
                  the
                  Lenders);

              

      

       

      
        	
                8.6.9  

              	
                Information:
                  promptly furnish the Facility Agent with all such information as
                  it may
                  from time to time reasonably require regarding each Mortgaged Ship,
                  her
                  Insurances, her employment, position and engagements, particulars
                  of all
                  towages and salvages, and copies of all charters and other contracts
                  for
                  her employment entered into by the Lessee, or otherwise howsoever
                  concerning her;

              

      

       

      
        	
                8.6.10  

              	
                Notification of certain events:
                  notify the Facility Agent immediately
                  of:

              

      

       

      
        	
                (a)  

              	
                any
                  damage to any Mortgaged Ship requiring repairs the cost of which
                  will or
                  might exceed the Casualty Amount;

              

      

       

      
        	
                (b)  

              	
                any
                  occurrence in consequence of which any Mortgaged Ship has or may
                  become a
                  Total Loss;

              

      

       

      
        	
                (c)  

              	
                any
                  requisition of any Mortgaged Ship for
                  hire;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (d)  

              	
                any
                  requirement or recommendation made in relation to any Mortgaged
                  Ship by
                  any insurer or its Classification Society or by any competent authority
                  which cannot or is not complied with in accordance with its
                  terms;

              

      

       

      
        	
                (e)  

              	
                any
                  arrest or detention of any Mortgaged Ship or any exercise or purported
                  exercise of a lien or other claim on such Ship or her Earnings
                  or
                  Insurances or any part thereof;

              

      

       

      
        	
                (f)  

              	
                the
                  occurrence of any material Environmental Claim against the Lessor,
                  the
                  Lessee, any Mortgaged Ship or any incident, event or circumstances
                  which
                  may give rise to any such Environmental Claim or a
                  Default;

              

      

       

      
        	
                (g)  

              	
                the
                  occurrence of any period of off-hire in excess of ten (10) days
                  or
                  unscheduled dry-docking in respect of any Mortgaged
                  Ship;

              

      

       

      
        	
                (h)  

              	
                the
                  occurrence of any default by the Time Charterer under any of the
                  Time
                  Charters, including any event of non-payment of charterhire under
                  any Time
                  Charter;

              

      

       

      
        	
                (i)  

              	
                the
                  occurrence of any force majeure event under clause 22 of any of the
                  Time Charters which has been occurring for thirty (30) days or
                  more and
                  the exercise by the Time Charterer of its right to cancel any relevant
                  Time Charter pursuant to such clause 22 of any such Time Charter;
                  and

              

      

       

      
        	
                (j)  

              	
                the
                  exercise by the Time Charterer of its optional cancellation rights
                  under
                  clause 2d of any of the Time Charters and/or its option to purchase a
                  Ship under clause 30 of any relevant Time Charter and/or its option
                  to bareboat charter a Ship under clause 31 of any relevant Time
                  Charter;

              

      

       

      
        	
                8.6.11  

              	
                Payment
                  of outgoings and evidence of payments: promptly pay all tolls,
                  dues and other outgoings whatsoever in respect of each Mortgaged
                  Ship and
                  her Earnings and Insurances and keep proper books of account in
                  respect of
                  each Mortgaged Ship and her Earnings and, as and when the Facility
                  Agent
                  may so require, make such books available for inspection on behalf
                  of the
                  Facility Agent, and furnish satisfactory evidence that the wages
                  and
                  allotments and the insurance and pension contributions of the Master
                  and
                  crew are being promptly and regularly paid and that all deductions
                  from
                  crew’s wages in respect of any applicable tax liability are being properly
                  accounted for and that the Master has no claim for disbursements
                  other
                  than those incurred by him in the ordinary course of trading on
                  the voyage
                  then in progress;

              

      

       

      
        	
                8.6.12  

              	
                Encumbrances:
                  not without the prior written consent of the Facility Agent acting
                  on the
                  instructions of all of the Lenders (and then only subject to such
                  conditions as the Facility Agent may impose in accordance with
                  such
                  instructions) create or purport or agree to create or permit to
                  arise or
                  subsist any Encumbrance (other than Permitted Encumbrances) over
                  or in
                  respect of any Ship, any share or interest therein, the Insurances,
                  the
                  Earnings or in any other assets, contracts, accounts or revenues
                  that are
                  subject to (or that will, on the execution thereof, be subject
                  to) the
                  provisions of this Agreement or any of the other Security
                  Documents;

              

      

       

      
        	
                8.6.13  

              	
                Sale or other disposal:
                  not without the prior written consent of the Facility Agent acting
                  on the
                  instructions of the Majority Lenders (and then only subject to
                  such
                  conditions as the Facility Agent may impose in accordance with
                  such
                  instructions) sell, agree to sell or request or require the Lessor
                  to
                  sell, transfer, assign, abandon or otherwise dispose of any Ship
                  or any
                  share or interest therein or any Shipbuilding Contract (other than,
                  for
                  the avoidance of doubt, to the Time Charterer in accordance with
                  the terms
                  of the relevant Time Charter) if the proceeds of sale of such Ship
                  or
                  disposal, assignment or transfer of such Shipbuilding Contract,
                  if applied
                  in accordance with the relevant Proceeds Deed, would or may be
                  insufficient to enable the Borrowers to comply with their obligations
                  under clause 4.4 and to meet any expenses incurred by the Borrowers
                  or the Finance Parties in connection with such disposal upon the
                  disposal
                  of such Ship or such Shipbuilding Contract and the Borrowers will
                  not have
                  other funds available to them to enable them to comply with such
                  obligations upon completion of the disposal of such Ship or such
                  Shipbuilding Contract;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.6.14  

              	
                Chartering:

              

      

       

      
        	
                (a)  

              	
                unless
                  required by the Time Charterer pursuant to clause 31 of any Time
                  Charter and save to the extent agreed by the Lenders under
                  clause 4.5, not without the prior written consent of the Facility
                  Agent (to be given with the prior approval of the Majority Lenders)
                  and,
                  if such consent is given, only subject to such conditions as the
                  Facility
                  Agent may impose, let any Mortgaged Ship on demise charter for
                  any period;
                  and

              

      

       

      
        	
                (b)  

              	
                save
                  for the Time Charters, not without the prior written consent of
                  the
                  Facility Agent (to be given with the prior approval of the Majority
                  Lenders which approval shall not be unreasonably withheld) and,
                  if such
                  consent is given, only subject to such conditions as the Facility
                  Agent
                  may impose:

              

      

       

      
        	
                (i)  

              	
                let
                  any Mortgaged Ship by any time or consecutive voyage charter for
                  a term
                  which exceeds or which by virtue of any optional extensions therein
                  contained may exceed twelve (12) months’
                  duration;

              

      

       

      
        	
                (ii)  

              	
                de-activate
                  or lay up any Mortgaged Ship other than when required to do so
                  by the Time
                  Charterer in accordance with the relevant Time
                  Charter;

              

      

       

      
        	
                (iii)  

              	
                let
                  any Mortgaged Ship other than on arms’ length
                  terms.

              

      

       

      
        	
                8.6.15  

              	
                Sharing
                  of Earnings: save as contemplated in the Proceeds Deeds, not
                  without the prior written consent of the Facility Agent acting
                  on the
                  instructions of the Majority Lenders (and then only subject to
                  such
                  conditions as the Facility Agent may impose in accordance with
                  such
                  instructions) to enter into any agreement or arrangement whereby
                  the
                  Earnings of any Mortgaged Ship may be shared with any other
                  person;

              

      

       

      
        	
                8.6.16  

              	
                Payment
                  of Earnings: procure that the Earnings in respect of the Time
                  Charter of any Mortgaged Ship are at all times paid either to the
                  Operating Account or, upon the occurrence of an Event of Default
                  which is
                  unwaived and continuing, the Collection Account and that any Earnings
                  in
                  respect of the Time Charter of any Mortgaged Ship which are so
                  payable and
                  which are in the hands of the Lessee’s brokers or agents are duly
                  accounted for and paid over to the Facility Agent (for credit to
                  the
                  Operating Account or, as the case may be, the Collection Account)
                  forthwith on demand;

              

      

       

      
        	
                8.6.17  

              	
                Repairers’ liens:
                  not without the prior written consent of the Facility Agent (acting
                  on the
                  instructions of the Majority Lenders) put any Mortgaged Ship into
                  the
                  possession of any person for the purpose of work being done upon
                  her
                  unless either:

              

      

       

      
        	
                (a)  

              	
                such
                  person shall first have given to the Facility Agent in terms satisfactory
                  to it, a written undertaking not to exercise any lien on the relevant
                  Mortgaged Ship or her Earnings for the cost of such work or otherwise;
                  or

              

      

       

      
        	
                (b)  

              	
                any
                  such lien of such person would be a Permitted
                  Lien;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.6.18  

              	
                Technical
                  management of a Mortgaged Ship: not sub-contract the technical
                  management of a Mortgaged Ship or allow the technical management
                  of the
                  Ship to be sub-contracted to any person who is not a member of
                  the Teekay
                  Guarantor Group without the prior written consent of the Facility
                  Agent
                  (given with the approval of the Majority Lenders) which consent
                  may be
                  given subject to such conditions as the Facility Agent may reasonably
                  require including the execution by the proposed manager of a Manager’s
                  Undertaking confirming that the rights of such manager will be
                  subordinate
                  to those of the Finance Parties under the Security Documents, provided
                  that the sub-contracting of the provision of a specific service
                  to a
                  person or persons who is not a member of the Teekay Guarantor Group
                  and
                  whose remuneration when aggregated with any other such sub-contracting
                  to
                  such other persons, is less than $1,500,000 per annum (escalating
                  at three
                  point five per cent (3.5%) per annum for each calendar year from
                  and
                  including 2005), shall not require such
                  consent;

              

      

       

      
        	
                8.6.19  

              	
                Notice
                  of Mortgage: place and at all times and places retain a properly
                  certified copy of the relevant Mortgage (which shall form part
                  of the
                  relevant Mortgaged Ship’s documents) on board each Mortgaged Ship with her
                  papers and place and keep prominently displayed in the navigation
                  room and
                  in the Master’s cabin of each Mortgaged Ship a framed printed notice in
                  plain type reading as follows:

              

      

       

      “NOTICE
        OF MORTGAGE

       

      This
        Ship
        is subject to a first priority mortgage in favour of [here insert name
        of mortgagee(s)] of [here insert address of
        mortgagee(s)] who has transferred such mortgage to [here insert
        name of transferee(s)] of [here insert address of
        transferee(s)]. Under the said mortgage, neither [here insert
        name of Lessor and Lessee] nor any charterer nor the Master of this
        Ship has any right, power or authority to create, incur or permit to be imposed
        upon this Ship any commitments or encumbrances whatsoever other than for
        crew’s
        wages and salvage.”;

       

      
        	
                8.6.20  

              	
                Notice
                  of Mortgagefollowing Interim Disposition:
                  following an Interim Disposition, place and at all times and places
                  retain
                  a properly certified copy of the relevant Standby Mortgage (which
                  shall
                  form part of the relevant Mortgaged Ship’s documents) on board each
                  Mortgaged Ship with her papers and place and keep prominently displayed
                  in
                  the navigation room and in the Master’s cabin of each Mortgaged Ship a
                  framed printed notice in plain type reading as
                  follows:

              

      

       

      “NOTICE
        OF MORTGAGE

       

      The
        Ship
        is subject to a first priority mortgage and security deed in favour of
        [here insert name of mortgage(s)] of [here insert
        address of mortgagee(s)].  Under the said mortgage and
        security deed, neither [here insert name of Standby Purchaser and
        Lessee] nor any charterer nor the Master of this Ship has any
        right, power of authority to create, incur or permit to be imposed upon this
        Ship any commitments or encumbrances whatsoever other than for crew’s wages and
        salvage.”;

       

      
        	
                8.6.21  

              	
                Conveyance
                  on default: where a Mortgaged Ship is (or is to be) sold in
                  exercise of any power contained in the relevant Mortgage or, as
                  applicable, Standby Mortgage or otherwise conferred on the Security
                  Trustee, procure, forthwith upon request by the Security Trustee,
                  that
                  such form of conveyance of such Mortgaged Ship as the Security
                  Trustee may
                  require is executed;

              

      

       

      
        	
                8.6.22  

              	
                Anti-drug
                  abuse: without prejudice to clause 8.6.23, take all necessary and
                  proper precautions
                  to prevent any infringements of the Anti-Drug Abuse Act of 1986
                  of the
                  United States of America or any similar legislation applicable
                  to any
                  Mortgaged Ship in any jurisdiction in or to which any Mortgaged
                  Ship shall
                  be employed or located or trade or which may otherwise be applicable
                  to
                  any Mortgaged Ship and/or the
                  Lessees;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                8.6.23  

              	
                Compliance
                  with Laws: to comply in all material respects with all laws
                  (including Environmental Laws) applicable to it and/or its Mortgaged
                  Ship
                  including, without limitation, requirements relating to manning
                  and
                  establishment of financial responsibility and to obtain and comply
                  with
                  all Environmental Approvals applicable to its and/or its Mortgaged
                  Ship;
                  and

              

      

       

      
        	
                8.6.24  

              	
                Retention
                  Account; Minimum Cash Balance:  procure that on or
                  before 31 December 2010 an amount of not less than three million
                  Dollars
                  ($3,000,000) is deposited to the Retention Account with the intent
                  that
                  following 31 December 2010 the Retention Account must at all times
                  during
                  the Security Period have a minimum balance of not less than three
                  million
                  Dollars ($3,000,000) or, if the following paragraph is applicable,
                  six million Dollars ($6,000,000).  In addition, the Borrowers
                  shall also procure that the Retention Account Pledge is executed
                  in favour
                  of the Security Trustee on or before 31 December 2010 and that
                  the
                  Facility Agent shall have been provided on or before such date
                  with such
                  conditions precedent relating to the Retention Account Pledge as
                  the
                  Facility Agent may reasonably require (and which will be of a similar
                  type
                  to those conditions precedent referred to in clause 9.1 and parts 1
                  and 3 of Schedule 4 as the Facility Agent shall have previously
                  received in respect of the Account
                  Pledge).

              

      

       

      In
        addition, if at any time prior to 31 December 2010 the Lenders, acting
        reasonably and in good faith and based on their independent assessment of
        the
        financial condition of the Guarantors, believe that a further retention in
        the
        Retention Account is required then the Agent shall notify the Borrowers and
        the
        Guarantors in writing and on or prior to 31 December 2010 or, if later, within
        thirty (30) days of receipt of such notice, the Borrowers shall procure that
        the
        minimum balance standing to the credit of the Retention Account shall be
        not
        less than six million Dollars ($6,000,000).

       

      As
        an
        alternative to depositing the required amounts referred to above in the
        Retention Account, the Borrowers shall be entitled to procure that a letter
        of
        credit is issued in favour of the Security Trustee from a bank or financial
        institution acceptable to the Lenders, for a principal amount equal to the
        minimum balance that would otherwise be required to be retained on the Retention
        Account in accordance with the above provisions, for a duration at least
        equal
        to the Security Period (or for shorter periods but with an obligation on
        the
        part of the Borrowers to renew an existing letter of credit not later than
        thirty (30) days prior to the expiry of that existing letter of credit) and
        otherwise on terms acceptable to the Security Trustee (acting on the
        instructions of the Majority Lenders).  If the Borrowers decide to
        exercise this entitlement the Borrowers and the Lenders shall agree such
        changes, if any, to this Agreement as may be necessary to reflect the basis
        upon
        which any such letter of credit is provided.

       

      If
        the
        Time Charterer should exercise its rights under clause 31 of the Time
        Charter in respect of any or all the Ships and, at that time, no Event of
        Default (other than an Event of Default relating to the Time Charters referred
        to in clause 10.1.24) has occurred and is continuing unremedied or unwaived
        the Lenders shall, at the request and cost of the Borrowers, agree such
        modifications to the provisions of this clause 8.6 during the period of any
        bareboat charter of the relevant Ship or Ships pursuant to the said
        clause 31 as the Lenders, acting in good faith, consider appropriate to
        reflect (a) the terms upon which the Time Charterer shall bareboat charter
        the
        relevant Ship or Ships in consequence of the exercise of the Time Charterer’s
        rights under the said clause 31 and (b) the obligations under the
        provisions of this 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      clause 8.6
        which are still capable of being performed by the Borrowers and/or the Lessee,
        having regard to the existence of the bareboat charter in respect of the
        relevant Ship or Ships (and to the extent that the obligations of the Borrowers
        and/or the Lessee under this clause 8.6 are not so capable of being
        performed by the Borrowers and/or the Lessee, the Borrowers and/or the Lessee
        shall be released from the performance of those obligations during the period
        of
        any bareboat charter of the relevant Ship or Ships pursuant to the said
        clause 31 but shall otherwise comply with the provisions of this
        clause 8.6 to the extent agreed by the Lenders by such
        modifications).

       

      
        	
                9  

              	
                Conditions

              

      

       

      
        	
                9.1  

              	
                Documents
                  and evidence

              

      

       

      The
        obligation of each Lender to make its Commitment available shall be subject
        to
        the condition that:

       

      
        	
                9.1.1  

              	
                the
                  Facility Agent, or its duly authorised representative, shall have
                  received, not later than two (2) Banking Days before the day on
                  which the
                  Drawdown Notice is given in respect of the First Advance, the documents
                  and evidence specified in Part 1 of Schedule 4 in form and substance
                  satisfactory to the Facility Agent;

              

      

       

      
        	
                9.1.2  

              	
                the
                  Facility Agent, or its duly authorised representative, shall have
                  received
                  prior to the Drawdown Date of each Advance (other than a Delivery
                  Advance), the documents and evidence specified in Part 2 of
                  Schedule 4 in form and substance satisfactory to the Facility
                  Agent;

              

      

       

      
        	
                9.1.3  

              	
                the
                  Facility Agent, or its duly authorised representative, shall have
                  received, prior to the Drawdown Date of each Delivery Advance,
                  the
                  documents and evidence specified in Part 3 of Schedule 4 in form and
                  substance satisfactory to the Facility Agent;
                  and

              

      

       

      
        	
                9.1.4  

              	
                the
                  Facility Agent, or its duly authorised representative, shall have
                  received, on or prior to the Delivery Date of any Ship, the documents
                  and
                  evidence specified in Part 4 of Schedule 4 in form and substance
                  satisfactory to the Facility Agent.

              

      

       

      
        	
                9.2  

              	
                General
                  conditions precedent

              

      

       

      The
        obligation of each Lender to contribute to any Advance shall be subject to
        the
        further conditions that, at the time of the giving of each Drawdown Notice
        and
        on each Drawdown Date:

       

      
        	
                9.2.1  

              	
                the
                  representations and warranties contained in clauses 7.1 and 7.2 and
                  clauses 4.1 and 4.2 of the Teekay Guarantee (and so that the
                  representation and warranty in clause 4.1.6 of the Teekay Guarantee
                  shall for this purpose refer to the then latest audited financial
                  statements delivered to the Security Trustee under clause 5.1.4 of
                  the Teekay Guarantee), clauses 4.1 and 4.2 of the QGTC Guarantee
                  (and so
                  that the representation and warranty in clause 4.1.6 of the QGTC
                  Guarantee
                  shall for this purpose refer to the then latest audited financial
                  statements delivered to the Security Trustee under clause 5.1.4
                  of the
                  QGTC Guarantee) and clauses 2.1 and 2.2 of the Lessee Assignments are
                  true and correct on and as of each such time as if each was made
                  with
                  respect to the facts and circumstances existing at such time;
                  and

              

      

       

      
        	
                9.2.2  

              	
                no
                  material adverse change (as described in clause 10.1.17) and no other
                  Default shall have occurred and be continuing or would result from
                  the
                  making of such Advance; and

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                9.2.3  

              	
                in
                  respect of the Ship to which an Advance relates, no event of the
                  type
                  referred to in clause 4.3.5 has
                  occurred.

              

      

       

      
        	
                9.3  

              	
                Waiver
                  of conditions precedent

              

      

       

      The
        conditions specified in this clause 9 are inserted solely for the benefit
        of the Lenders and may be waived on their behalf in whole or in part and
        with or
        without conditions by the Facility Agent acting on the instructions of the
        Majority Lenders (or in the case of any waiver in relation to the execution
        of
        any of the Security Documents, all the Lenders) in respect of the first or
        any
        other Advance without prejudicing the right of the Facility Agent acting
        on such
        instructions to require fulfilment of such conditions in whole or in part
        in
        respect of any other Advance.

       

      
        	
                9.4  

              	
                Further
                  conditions precedent

              

      

       

      If
        the
        Facility Agent reasonably believes that there has been a change in law that
        adversely affects the status of any of the Security Parties, the Lessor or
        any
        Finance Party, the security intended to be created by the Security Documents
        or
        the delivery or registration of a Ship, then, not later than five (5) Banking
        Days prior to each Drawdown Date and to each Interest Payment Date, the Facility
        Agent acting on the instructions of the Majority Lenders (or in the case
        of any
        waiver in relation to the Mortgages, all the Lenders) may request and the
        Borrowers shall, not later than two (2) Banking Days prior to such date,
        deliver
        to the Facility Agent on such request further favourable certificates and/or
        opinions as to any or all of the matters which are the subject of
        clauses 7, 8, 9, and 10.

       

      
        	
                9.5  

              	
                Notification

              

      

       

      The
        Facility Agent shall notify the Lenders and the Borrowers promptly upon receipt
        by it of the documents and evidence referred to in clause 9.1 in form and
        substance satisfactory to it and shall, if so requested, provide copies of
        such
        documents and evidence to KEXIM.

       

      
        	
                10  

              	
                Events of Default

              

      

       

      
        	
                10.1  

              	
                Events

              

      

       

      There
        shall be an Event of Default if:

       

      
        	
                10.1.1  

              	
                Non-payment:
                  any Security Party fails to pay:

              

      

       

      
        	
                (a)  

              	
                any
                  amount of principal or interest due from it under this Agreement
                  at the
                  time, in the currency and in the manner stipulated herein unless
                  (i) its
                  failure to pay is caused by administrative or technical error and
                  (ii)
                  payment is made within three (3) Banking Days of its due date;
                  or

              

      

       

      
        	
                (b)  

              	
                any
                  other amount due from it under any of the Security Documents and
                  such
                  failure continues unremedied after five (5) Banking Days from its
                  due date
                  (which shall include payments expressed to be payable within a
                  particular
                  time period of demand under the term of the Security Documents),
                  or in the
                  case of sums payable on demand, ten (10) Banking Days after such
                  demand
                  has been duly made on such Security Party;
                  or

              

      

       

      
        	
                10.1.2  

              	
                Breach
                  of Insurance and certain other obligations: (a) any Security
                  Party fails to obtain and/or maintain the Insurances (in accordance
                  with
                  the requirements of clause 8.5) or (b) if any insurer in respect of
                  such Insurances cancels the Insurances or disclaims liability by
                  reason,
                  in either case, of mis-statement in any proposal for the Insurances
                  or for
                  any other failure or default on the part of any Security Party
                  or any
                  other person or (c) the Borrowers commit any breach of, or omit
                  to observe
                  any of, the obligations or undertakings expressed to be assumed
                  by them
                  under clause 8.2, 8.3, 8.5 or 8.6.24 or (d) the Teekay Guarantor
                  commits any breach of clause 5.3 (Financial undertakings) of the
                  Teekay Guarantee; or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                10.1.3  

              	
                Breach
                  of other obligations: any Security Party commits any breach of or
                  omits to observe any of its obligations or undertakings expressed
                  to be
                  assumed by it under any of the Security Documents (other than those
                  referred to in clause 10.1.1 and 10.1.2 above) and, in respect of any
                  such breach or omission which in the opinion of the Majority Lenders
                  is
                  capable of remedy, such action as the Facility Agent may require
                  shall not
                  have been taken within thirty (30) days of the Facility Agent notifying
                  the relevant Security Party of such default and of such required
                  action;
                  or

              

      

       

      
        	
                10.1.4  

              	
                Misrepresentation:
                  any representation or warranty (which the Majority Lenders in their
                  reasonable opinion consider material) made or deemed to be made
                  or
                  repeated by or in respect of any Security Party in or pursuant
                  to any of
                  the Security Documents or in any notice, certificate or statement
                  referred
                  to in or delivered under any of the Security Documents is or proves
                  to
                  have been incorrect or misleading in any material respect;
                  or

              

      

       

      
        	
                10.1.5  

              	
                Cross-default:
                  at any time, the aggregate of the following amounts at such time
                  exceeds
                  one million Dollars ($1,000,000) in aggregate in relation to the
                  Borrowers
                  taken together or fifty million Dollars ($50,000,000) in aggregate
                  in
                  relation to all the members of each Guarantor Group taken
                  together:

              

      

       

      
        	
                (a)  

              	
                any
                  Borrowed Money of any Security Party or any other member of either
                  Guarantor Group that is not paid when due and remains
                  unpaid;

              

      

       

      
        	
                (b)  

              	
                any
                  Borrowed Money of any Security Party or other member of either
                  Guarantor
                  Group that has become (whether by declaration or automatically
                  in
                  accordance with the relevant agreement or instrument constituting
                  the
                  same) due and payable prior to the date when it would otherwise
                  have
                  become due (unless as a result of the exercise by such Security
                  Party or
                  such other member of either Guarantor Group of a voluntary right
                  of
                  prepayment or upon a mandatory prepayment not constituting or arising
                  out
                  of an event of default);

              

      

       

      
        	
                (c)  

              	
                any
                  facility or commitment available to any Security Party or any other
                  member
                  of either Guarantor Group relating to Borrowed Money that has been
                  withdrawn, suspended or cancelled by reason of any default (however
                  described) of the person concerned (unless such Security Party
                  or such
                  other member of either Guarantor Group shall have satisfied the
                  Majority
                  Lenders that such withdrawal, suspension or cancellation will not
                  affect
                  or prejudice in any way such Security Party’s ability or the ability of
                  such other member of either Guarantor Group to pay its debts as
                  they fall
                  due and fund its commitments, or any guarantee given by such Security
                  Party or such other member of either Guarantor
                  Group);

              

      

       

      
        	
                (d)  

              	
                any
                  amounts demanded of, but not paid when due and remaining unpaid
                  by any
                  Security Party or any other member of either Guarantor Group under
                  any
                  guarantee in respect of Borrowed Money;
                  or

              

      

       

      
        	
                10.1.6  

              	
                Legal
                  process: any judgement or order made against any Security Party
                  is not stayed or complied with within fifteen (15) days or a creditor
                  attaches or takes possession of, or a distress, execution, sequestration
                  or other process is levied or enforced upon or sued out against,
                  any of
                  the undertakings, assets, rights or revenues of any Security Party
                  and is
                  not discharged within thirty (30) days, in each case in an aggregate
                  amount equal to or exceeding fifty million Dollars ($50,000,000);
                  or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                10.1.7  

              	
                Insolvency:
                  any Security Party is unable or admits inability to pay its debts
                  as they
                  fall due, suspends making payments on any of its debts or announces
                  an
                  intention to do so, becomes insolvent, has consolidated assets
                  the value
                  of which is less than the value of its consolidated liabilities
                  (taking
                  into account contingent liabilities) or suffers the declaration
                  of a
                  moratorium in respect of any of its indebtedness;
                  or

              

      

       

      
        	
                10.1.8  

              	
                Reduction
                  or loss of capital: a meeting is convened by any Security Party
                  for the purpose of passing any resolution to purchase, reduce or
                  redeem
                  any of its share capital, other than in the case of the Teekay
                  Guarantor,
                  in respect of any arrangement for the repurchase by the Teekay
                  Guarantor
                  of shares of the Teekay Guarantor;

              

      

       

      
        	
                10.1.9  

              	
                Insolvency
                  proceedings: except as provided below, any of the following
                  occurs in respect of any Security
                  Party:

              

      

       

      
        	
                (a)  

              	
                any
                  step is taken with a view to a moratorium or to a composition,
                  compromise,
                  assignment or similar arrangement with any of its creditors with
                  a view to
                  the general readjustment or rescheduling of all or part of its
                  indebtedness; or

              

      

       

      
        	
                (b)  

              	
                a
                  meeting of its shareholders, directors or other officers is convened
                  for
                  the purpose of considering any resolution to petition for or file
                  documents with a court for its winding-up, administration or dissolution
                  (unless in any case it is solvent) or any such resolution is passed;
                  or

              

      

       

      
        	
                (c)  

              	
                any
                  person presents a petition, or files documents with a court for
                  its
                  winding-up, administration or dissolution;
                  or

              

      

       

      
        	
                (d)  

              	
                an
                  order for its winding-up, administration or dissolution is made;
                  or

              

      

       

      
        	
                (e)  

              	
                any
                  liquidator, trustee in bankruptcy, judicial custodian, compulsory
                  manager,
                  receiver, administrative receiver, administrator or similar official
                  is
                  appointed in respect of it or any of its assets;
                  or

              

      

       

      
        	
                (f)  

              	
                its
                  directors, shareholders or other officers request the appointment
                  of, or
                  give notice of their intention to appoint a liquidator, trustee
                  in
                  bankruptcy, judicial custodian, compulsory manager, receiver,
                  administrative receiver, administrator or similar officer;
                  or

              

      

       

      
        	
                (g)  

              	
                any
                  other analogous step or procedure is taken in any Relevant
                  Jurisdiction,

              

      

       

      provided
        that this clause 10.1.9 shall not apply to a frivolous or vexatious
        petition for winding-up presented by a creditor which is being contested
        in good
        faith with due diligence and by appropriate proceedings and is discharged
        or
        struck out within fourteen (14) days of the making of such petition;
        or

       

      
        	
                10.1.10  

              	
                Analogous
                  proceedings: there occurs, in relation to any Security Party in
                  any country or territory in which any of them carries on business
                  or to
                  the jurisdiction of whose courts any part of their assets is subject,
                  any
                  event which, in the reasonable opinion of the Facility Agent, appears
                  in
                  that country or territory to correspond with, or have an effect
                  equivalent
                  or similar to, any of those mentioned in clause 10.1.6, 10.1.7 or
                  10.1.9; or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                10.1.11  

              	
                Cessation
                  of business: any Security Party suspends or ceases or threatens
                  to suspend or cease to carry on its business;
                  or

              

      

       

      
        	
                10.1.12  

              	
                Seizure:
                  save to the extent that such event constitutes a Total Loss of
                  a Ship, all
                  or a material part of the undertaking, assets, rights or revenues
                  of, or
                  shares or other ownership interests in, any Security Party are
                  seized,
                  nationalised, expropriated or compulsorily acquired by or under
                  the
                  authority of any government (other than in circumstances referred
                  to in
                  clause 10.1.25); or

              

      

       

      
        	
                10.1.13  

              	
                Invalidity:
                  any of the material terms of any of the Security Documents shall
                  at any
                  time and for any reason, whether in whole or part, become invalid
                  or
                  unenforceable or otherwise cease to remain in full force and effect
                  unless
                  the Facility Agent, acting reasonably, believes such invalidity
                  or
                  enforceability is capable of being remedied or mitigated and such
                  invalidity or unenforceability is not remedied or mitigated to
                  the
                  satisfaction of the Facility Agent within thirty (30) days after
                  it has
                  given notice thereof to the Borrowers, or if the validity or
                  enforceability of any of the Security Documents shall at any time
                  and for
                  any reason be contested by any Security Party or if any Security
                  Party
                  shall deny that it has any, or any further, liability thereunder;
                  or

              

      

       

      
        	
                10.1.14  

              	
                Unlawfulness:
                  it becomes impossible or unlawful at any time for any Security
                  Party to
                  fulfil any of the material covenants and obligations expressed
                  to be
                  assumed by it in any of the Security Documents or for any of the
                  Finance
                  Parties to exercise the rights or any of them vested in it under
                  any of
                  the Security Documents or otherwise unless the Facility Agent,
                  acting
                  reasonably, believes such impossibility or illegality is capable
                  of being
                  remedied or mitigated, and such impossibility or illegality is
                  not
                  remedied or mitigated to the satisfaction of the Facility Agent
                  within
                  thirty (30) days after it has given notice thereof to the Borrowers;
                  or

              

      

       

      
        	
                10.1.15  

              	
                Repudiation:
                  any Security Party repudiates any of the Security Documents or
                  does or
                  causes or permits to be done any act or thing evidencing an intention
                  to
                  repudiate any of the Security Documents;
                  or

              

      

       

      
        	
                10.1.16  

              	
                Encumbrances
                  enforceable: other than an arrest of a Ship to which the
                  provisions of clause 10.1.25 apply, any Encumbrance (other than
                  Permitted
                  Liens) in respect of any of the property (or part thereof) which
                  is the
                  subject of any of the Security Documents becomes enforceable unless
                  the
                  Borrowers are taking appropriate steps to remove and/or discharge
                  that
                  Encumbrance and such Encumbrance is removed and/or discharged within
                  thirty (30) days thereafter; or

              

      

       

      
        	
                10.1.17  

              	
                Material
                  adverse change: there occurs, in the reasonable opinion of the
                  Majority Lenders, (a) a material adverse change in the financial
                  condition
                  of any Security Party by reference to the financial statements
                  referred to
                  in clause 4.1.6 of the Teekay Guarantee or (b) an event or
                  circumstance which is likely materially and adversely to affect
                  either (i)
                  the ability of any Security Party to perform all or any of its
                  obligations
                  under, or otherwise to comply with the terms of any of, the Security
                  Documents or the Time Charters or (ii) the security created by
                  any of the
                  Security Documents; or

              

      

       

      
        	
                10.1.18  

              	
                Unrest:
                  the Flag State of any Mortgaged Ship or any Relevant Jurisdiction
                  becomes
                  involved in hostilities or civil war or there is a seizure of power
                  in the
                  Flag State or any Relevant Jurisdiction by unconstitutional means
                  if, in
                  any such case, such event could in the reasonable opinion of the
                  Facility
                  Agent reasonably be expected to have a material adverse effect
                  on the
                  security created by any of the Security Documents and, within thirty
                  (30)
                  days of notice from Facility Agent to do so, the Security Parties
                  have not
                  taken all such action as the Facility Agent may require to ensure
                  that
                  such circumstances will not have such an effect;
                  or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                10.1.19  

              	
                Environment:
                  any Security Party fails to comply with any Environmental Law or
                  any
                  Environmental Approval or any of the Mortgaged Ships or any other
                  Relevant
                  Ship is involved in any incident which gives rise or may give rise
                  to an
                  Environmental Claim if, in any such case, such non-compliance or
                  incident
                  or the consequences thereof could, in the opinion of the Majority
                  Lenders,
                  reasonably be expected to have a Material Adverse Effect;
                  or

              

      

       

      
        	
                10.1.20  

              	
                P&I:
                  the Lessee or any other person fails or omits to comply with any
                  requirements of the protection and indemnity association or other
                  insurer
                  with which any of the Ships is entered for insurance or insured
                  against
                  protection and indemnity risks (including oil pollution risks)
                  to the
                  effect that any cover relative to any of the Ships (including,
                  without
                  limitation, any cover in respect of liability for Environmental
                  Claims
                  arising in jurisdictions where any such Ship operates or trades)
                  is or may
                  be liable to cancellation, qualification or exclusion at any time;
                  or

              

      

       

      
        	
                10.1.21  

              	
                Licenses
                  etc.: any license, authorisation, consent or approval at any
                  time
                  necessary to enable any Security Party to comply with its obligations
                  under the Security Documents or to enable the operation of any
                  of the
                  Mortgaged Ships is revoked or withheld or modified or is otherwise
                  not
                  granted or fails to remain in full force and effect or if any exchange
                  control or other law or regulation shall exist which would make
                  any
                  transaction under the Security Documents, or the continuation thereof,
                  unlawful or would prevent the performance by any Security Party
                  of any
                  term of the Security Documents; or

              

      

       

      
        	
                10.1.22  

              	
                Change
                  of Control: there is a change in control of
                  any Security Party other than QGTC (whether or not by reference
                  to a
                  change in the majority ownership of shares in such Security Party
                  or by
                  reference to a change in the composition of the board of directors
                  or
                  equivalent management body of such Security Party) without the
                  prior
                  written consent of the Facility Agent (acting on the instructions
                  of the
                  Majority Lenders), provided that so long as the Teekay Guarantor
                  continues
                  to have:

              

      

       

      
        	
                (a)  

              	
                legally
                  or beneficially and either directly or indirectly more than fifty
                  per
                  cent. (50%) of the entire issued share capital of a Security Party
                  other
                  than QGTC; or

              

      

       

      
        	
                (b)  

              	
                the
                  right or ability to control, either directly or indirectly, the
                  affairs,
                  or the composition of the board of directors (or equivalent of
                  it), of
                  such Security Party other than
                  QGTC;

              

      

       

      there
        shall not have occurred any change of control in such Security Party;
        or

       

      
        	
                10.1.23  

              	
                Termination
                  of Time Charters: any of the Time Charters are terminated or
                  cancelled or the chartering of the relevant Ship thereunder is
                  terminated
                  for any reason other than any expiry or termination arising by
                  effluxion
                  of time or any termination or cancellation which would give rise
                  to a
                  mandatory prepayment event under clause 4;
                  or

              

      

       

      
        	
                10.1.24  

              	
                Default
                  under the Time Charters:  any Security Party fails to
                  perform or observe any of the covenants, conditions, agreements
                  and
                  stipulations on its part contained in any of the Time Charters
                  and, if
                  such default is capable of remedy, shall have failed to remedy
                  such a
                  default within the period of thirty (30) days after notice in writing
                  of
                  that default has been received by the relevant Security Party from
                  the
                  other party to such Time Charter;
                  or

              

      

       

      
        	
                10.1.25  

              	
                Arrest:  any
                  of the Mortgaged Ships is arrested, confiscated, seized, taken
                  in
                  execution, impounded, forfeited, detained in exercise or purported
                  exercise of any possessory lien or other claim or otherwise taken
                  from the
                  possession of the Lessee (other than in the circumstances referred
                  to in
                  clause 10.1.12) and such Mortgaged Ship is
                  not released by the date falling thirty (30) days after such arrest
                  or, if
                  earlier, the date upon which an application for sale of that Mortgaged
                  Ship is to be heard or the Majority Lenders otherwise reasonably
                  consider
                  that there is an imminent risk of sale of that Mortgaged Ship;
                  or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                10.1.26  

              	
                Flag
                  State: the registration of any of the Mortgaged Ships or any
                  of
                  the Mortgages under the laws and flag of the Flag State is cancelled
                  or
                  terminated without the prior written consent of the Majority Lenders;
                  or

              

      

       

      
        	
                10.1.27  

              	
                Lease
                  termination: there occurs a Lease Event of Default under any of
                  the Leases and thereafter by reason of such Lease Event of Default,
                  the
                  Lessor terminates either (a) its obligation to acquire and lease
                  the Ship
                  in relation to the relevant Lease or (b) the leasing of the Ship
                  under the
                  relevant Lease.

              

      

       

      The
        provisions of clauses 10.1.5 to 10.1.10 inclusive are, in relation to the
        Teekay
        Guarantor and QGTC, subject to the provisions of clause 10.4.

       

      
        	
                10.2  

              	
                Acceleration

              

      

       

      The
        Facility Agent may and if so requested by the Majority Lenders shall, (without
        prejudice to any other rights of the Lenders), at any time after the happening
        of an Event of Default by notice to the Borrowers declare that:

       

      
        	
                10.2.1  

              	
                the
                  obligation of each Lender to make its Commitment available shall
                  be
                  terminated, whereupon the Total Commitments shall be reduced to
                  zero
                  forthwith; and/or

              

      

       

      
        	
                10.2.2  

              	
                the
                  Loan and all interest and commitment commission accrued and all
                  other sums
                  payable under the Security Documents have become due and payable,
                  whereupon the same shall, immediately or in accordance with the
                  terms of
                  such notice, become due and
                  payable.

              

      

       

      
        	
                10.3  

              	
                Demand
                  basis

              

      

       

      If,
        pursuant to clause 10.2.2, the Facility Agent declares the Loan to be due
        and payable on demand, the Facility Agent may (and, if so instructed by the
        Majority Lenders, shall) at anytime by written notice to the Borrowers (a)
        call
        for repayment of the Loan on such date as may be specified whereupon the
        Loan
        shall become due and payable on the date so specified together with all interest
        and commitment commission accrued and all other sums payable under this
        Agreement or (b) withdraw such declaration with effect from the date
        specified in such notice.

       

      
        	
                10.4  

              	
                Guarantor
                  Insolvency and
                  Cross-Default

              

      

       

      
        	
                10.4.1  

              	
                Teekay
                  Guarantor Default

              

      

       

      If
        any of
        the events described in clauses 10.1.5 to 10.1.10 occurs in respect of the
        Teekay Guarantor (a “TeekayGuarantor
        Default”), then QGTC shall be entitled, within five (5) Banking Days or
        such longer period as the Lenders may agree of receiving notice of such Teekay
        Guarantor Default, to request that all of the Finance Parties approve a proposal
        whereby:

       

      
        	
                (a)  

              	
                QGTC
                  may provide an additional or supplementary guarantee in respect
                  of the
                  obligations of the Borrowers to replace the Teekay Guarantee;
                  or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (b)  

              	
                QGTC
                  may procure a replacement Guarantor which is a member of the QGTC
                  Group
                  and acceptable to each of the Finance Parties to replace the Teekay
                  Guarantee,

              

      

       

      and
        each
        of the Finance Parties shall consider such request in good faith but any
        approval of each of the Finance Parties shall be in each Finance Party’s
        absolute discretion and shall also be subject to each of the Finance Parties
        obtaining such further board and/or credit approval as may be necessary for
        the
        acceptance of such request and all other matters each of the Finance Parties
        considers relevant to its approval.

       

      If
        a
        request under sub-paragraph (a) or (b) above is approved by each of the Finance
        Parties, such replacement or supplementary or additional guarantee shall
        be
        furnished within a period of thirty (30) days of the date of approval of
        all the
        Finance Parties.  The replacement or supplementary or additional
        guarantee shall be on such terms as the Finance Parties shall approve (but
        having regard to the terms of the existing Guarantees) and shall be supplemented
        by such consequential changes to the terms of this Agreement as may be
        appropriate and shall also be accompanied by such evidence of the type referred
        to in Part 1 of Schedule 4 as the Facility Agent considers
        appropriate.  If the above conditions are met no Event of Default
        shall be deemed to have arisen or to continue in respect of the Teekay Guarantor
        Default.

       

      If
        the
        above conditions are not met, an Event of Default shall be treated as having
        arisen in respect of the Teekay Guarantor Default and the Finance Parties
        shall
        not have been treated as having waived the Teekay Guarantor Default as a
        result
        of not taking any action in respect thereof during any period referred to
        above
        in this clause 10.4.1 in which it had been
        contemplated that QGTC as the non-defaulting Guarantor was considering whether
        to provide or procure an additional or supplemental guarantee or the Finance
        Parties were considering such a proposal or the additional or supplemental
        guarantee arrangements were being put in place in accordance with the provisions
        of this clause 10.4.1.

       

      
        	
                10.4.2  

              	
                QGTC
                  Default

              

      

       

      If
        any of
        the events described in clauses 10.1.5 to 10.1.10 occurs in respect of QGTC
        (a
“QGTC Default”), then the Teekay Guarantor shall be entitled to
        notify the Facility Agent within five (5) Banking Days or such longer period
        as
        the Lenders may agree of receiving notice of such QGTC Default
        that:

       

      
        	
                (a)  

              	
                the
                  Teekay Guarantor wishes to provide an additional or supplementary
                  guarantee in respect of obligations of the Borrowers to replace
                  mutatis
                  mutandis the QGTC Guarantee; or

              

      

       

      
        	
                (b)  

              	
                the
                  Teekay Guarantor wishes to procure a replacement Guarantor which
                  is a
                  member of the Teekay Guarantor Group and acceptable to each of
                  the Finance
                  Parties (in each of their absolute discretions) to replace the
                  QGTC
                  Guarantee,

              

      

       

      and
        in
        either case, such replacement or supplementary or additional guarantee shall
        be
        furnished within a period of thirty (30) days of, in the case of sub-paragraph
        (a) above, the Teekay Guarantor’s notification or, in the case of sub-paragraph
        (b) above, the approval of each of the Finance Parties.  The
        replacement or supplementary or additional guarantee shall be on such terms
        as
        the Finance Parties shall approve (but having regard to the terms of the
        existing Guarantees) and shall be supplemented by such consequential changes
        to
        the terms of this Agreement as may be appropriate and shall also be accompanied
        by such evidence of the type referred to in Part 1 of Schedule 4 as the Facility
        Agent considers appropriate.  If the above conditions are met, no
        Event of Default shall be deemed to have arisen or to continue in respect
        of the
        QGTC Default.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      If
        the
        above conditions are not met, an Event of Default shall be treated as having
        arisen in respect of the QGTC Default and the Finance Parties shall not have
        been treated as having waived the QGTC Default as a result of not taking
        any
        action in respect thereof during any period referred to above in this clause
10.4.2 in which it had been contemplated that the
        Teekay Guarantor as the non-defaulting Guarantor was considering whether
        to
        provide or procure an additional or supplemental guarantee or the Finance
        Parties were considering such a proposal or the additional or supplemental
        guarantee arrangements were being put in place in accordance with the provisions
        of this clause 10.4.2.

       

      
        	
                11  

              	
                Indemnities

              

      

       

      
        	
                11.1  

              	
                Miscellaneous
                  indemnities

              

      

       

      The
        Borrowers shall within three (3) Banking Days of demand, indemnify each Finance
        Party, without prejudice to any of their other rights under any of the Security
        Documents, against any cost, loss or liability properly incurred by that
        Finance
        Party as a result of:

       

      
        	
                11.1.1  

              	
                the
                  occurrence of any Default; or

              

      

       

      
        	
                11.1.2  

              	
                a
                  failure by any Security Party to pay an amount due under a Security
                  Document on its due date, including without limitation, any cost,
                  loss or
                  liability arising as a result of clause 6 of the Agency Agreement;
                  or

              

      

       

      
        	
                11.1.3  

              	
                the
                  Loan (or any part thereof) or any Ship Tranche (or part thereof)
                  not being
                  prepaid in accordance with clauses 4.3, 8.2 or 12.1 and any other
                  repayment or prepayment of the Loan (or part thereof) or any Ship
                  Tranche
                  (or part thereof) being made otherwise than on an Interest Payment
                  Date
                  relating to the part of the Loan or such Ship Tranche prepaid or
                  repaid;
                  or

              

      

       

      
        	
                11.1.4  

              	
                funding,
                  or making arrangements to fund, its participation in any Advance
                  requested
                  by the Borrowers in a Drawdown Notice but not made by reason of
                  the
                  operation of any one or more of the provisions of this Agreement
                  (other
                  than by reason of default or gross negligence by that Finance Party
                  alone),

              

      

       

      including,
        in any such case, but not limited to, any loss or expense sustained or incurred
        properly by such Lender in maintaining or funding its Contribution or any
        part
        thereof or in liquidating or re-employing deposits from third parties acquired
        to effect or maintain its Contribution or any part thereof or any other amount
        owing to such Lender.

       

      
        	
                11.2  

              	
                Indemnity
                  to the Facility Agent and Security
                  Trustee

              

      

       

      The
        Borrowers shall promptly indemnify the Facility Agent and Security Trustee
        against any cost, loss or liability reasonably incurred by the Facility Agent
        and the Security Trustee or either of them (acting reasonably) as a result
        of:

       

      
        	
                11.2.1  

              	
                investigating
                  any event which it reasonably believes is a Default;
                  or

              

      

       

      
        	
                11.2.2  

              	
                acting
                  or relying on any notice, request or instruction which it reasonably
                  believes to be genuine, correct and appropriately
                  authorised.

              

      

       

      
        	
                11.3  

              	
                Currency
                  indemnity

              

      

       

      If
        any
        sum due from the Borrowers under any of the Security Documents or any order
        or
        judgement given or made in relation thereto has to be converted from the
        currency (the “first 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      currency”)
        in which the same is payable under the relevant Security Document or under
        such
        order or judgement into another currency (the “second
        currency”) for the purpose of  (a)  making or filing a
        claim or proof against the Borrowers, (b)  obtaining an order or judgement
        in any court or other tribunal or (c) enforcing any order or judgement
        given or made in relation to any of the Security Documents, the Borrowers
        shall
        indemnify and hold harmless each of the Finance Parties from and against
        any
        loss suffered as a result of any difference between (i)  the rate of
        exchange used for such purpose to convert the sum in question from the first
        currency into the second currency and (ii) the rate or rates of exchange at
        which any of the Finance Parties may in the ordinary course of business purchase
        the first currency with the second currency upon receipt of a sum paid to
        it in
        satisfaction, in whole or in part, of any such order, judgement, claim or
        proof.  Any amount due from the Borrowers under this clause 11.2
        shall be due as a separate debt and shall not be affected by judgement being
        obtained for any other sums due under or in respect of any of the Security
        Documents and the term “rate of exchange” includes any premium and costs of
        exchange payable in connection with the purchase of the first currency with
        the
        second currency.

       

      
        	
                11.4  

              	
                Environmental
                  indemnity

              

      

       

      The
        Borrowers shall indemnify each of the Finance Parties on demand and hold
        each of
        the Finance Parties harmless from and against all costs, expenses, payments,
        charges, losses, demands, liabilities, actions, proceedings (whether civil
        or
        criminal), penalties, fines, damages, judgements, orders, sanctions or other
        outgoings of whatever nature which may be suffered, incurred or paid by,
        or made
        or asserted against any Finance Party at any time, whether before or after
        the
        repayment in full of principal and interest under this Agreement, relating
        to,
        or arising directly or indirectly in any manner or for any cause or reason
        whatsoever out of an Environmental Claim made or asserted against the Finance
        Party if such Environmental Claim would not have been, or been capable of
        being,
        made or asserted against the Finance Party if it had not entered into any
        of the
        Security Documents and/or performed any of its obligations thereunder and/or
        been involved in any of the transactions contemplated by the Security
        Documents.

       

      
        	
                12  

              	
                Unlawfulness
                  and increased costs

              

      

       

      
        	
                12.1  

              	
                Unlawfulness

              

      

       

      If
        it is
        or becomes contrary to any law or regulation for any Lender to contribute
        to
        Advances or to maintain its Commitment or fund its Contribution, such Lender
        shall promptly, through the Facility Agent, give notice to the Borrowers
        whereupon (a) such Lender’s Commitment shall be reduced to zero and (b) the
        Borrowers shall be obliged to prepay the Contribution of such Lender either
        (i)
        forthwith or (ii) on a future specified date not being earlier than the latest
        date permitted by the relevant law or regulation together with interest and
        commitment commission accrued to the date of prepayment and all other sums
        payable by the Borrowers to such Lender under this Agreement.

       

      
        	
                12.2  

              	
                Increased
                  costs

              

      

       

      If
        the
        result of any change in, or in the interpretation or application of, or the
        introduction of, any law or any regulation, request or requirement (whether
        or
        not having the force of law, but, if not having the force of law, with which
        the
        relevant Lender or, as the case may be, its holding company habitually
        complies), including (without limitation) those relating to Taxation, capital
        adequacy, liquidity, reserve assets, cash ratio deposits and special deposits,
        is to:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                12.2.1  

              	
                subject
                  any Lender to Taxes or change the basis of Taxation of any Lender
                  with
                  respect to any payment under any of the Security Documents (other
                  than
                  Taxes or Taxation on the overall net income, profits or gains of
                  such
                  Lender imposed in the jurisdiction in which its principal or lending
                  office under this Agreement is located);
                  and/or

              

      

       

      
        	
                12.2.2  

              	
                increase
                  the cost to, or impose an additional cost on, the Lender or its
                  holding
                  company in making or keeping such Lender’s Commitment available or
                  maintaining or funding all or part of such Lender’s Contribution;
                  and/or

              

      

       

      
        	
                12.2.3  

              	
                reduce
                  the amount payable or the effective return to any Lender under
                  any of the
                  Security Documents; and/or

              

      

       

      
        	
                12.2.4  

              	
                reduce
                  any Lender’s or its holding company’s rate of return on its overall
                  capital by reason of a change in the manner in which it is required
                  to
                  allocate capital resources to such Lender’s obligations under any of the
                  Security Documents; and/or

              

      

       

      
        	
                12.2.5  

              	
                require
                       any Lender or its holding company to make a payment or forgo
                  a return on
                  or calculated by reference to any amount received or receivable
                  by such
                  Lender under any of the Security Documents;
                  and/or

              

      

       

      
        	
                12.2.6  

              	
                require
                  any Lender or its holding company to incur or sustain a loss by
                  reason of
                  being obliged to deduct all or part of such Lender’s Commitment or
                  Contribution from its capital for regulatory
                  purposes,

              

      

       

      then
        and
        in each such case (subject to clause 12.3):

       

      
        	
                (a)  

              	
                such
                  Lender shall notify the Borrowers through the Facility Agent in
                  writing of
                  such event promptly upon its becoming aware of the same;
                  and

              

      

       

      
        	
                (b)  

              	
                the
                  Borrowers shall on demand, made at any time whether or not such
                  Lender’s
                  Contribution has been repaid, pay to the Facility Agent for the
                  account of
                  such Lender the amount which such Lender specifies (in a certificate
                  setting forth the basis of the computation of such amount but not
                  including any matters which such Lender or its holding company
                  regards as
                  confidential) is required to compensate such Lender and/or (as
                  the case
                  may be) its holding company for such liability to Taxes, cost,
                  reduction,
                  payment, forgone return or loss.

              

      

       

      For
        the
        purposes of this clause 12.2 and clause 12.4 “holding
        company” means the company or entity (if any) within the consolidated
        supervision of which a Lender is included.

       

      
        	
                12.3  

              	
                Exception

              

      

       

      Nothing
        in clause 12.2 shall entitle any Lender to receive any amount in respect of
        compensation for any such liability to Taxes, increased or additional cost,
        reduction, payment, foregone return or loss to the extent that the same is
        the
        subject of an additional payment under clause 6.7 which fully compensates
        that Lender.

       

      
        	
                12.4  

              	
                Mitigation

              

      

       

      If
        circumstances arise which would, or would upon the giving of notice, result
        in:

       

      
        	
                (a)  

              	
                the
                  Borrowers being required to make an increased payment to a Lender
                  pursuant
                  to clause 6.7; or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (b)  

              	
                the
                  reduction of the Commitment of a Lender to zero or the Borrowers
                  being
                  required to prepay any Lender’s Contribution pursuant to clause 12.1;
                  or

              

      

       

      
        	
                (c)  

              	
                the
                  Borrowers being required to make a payment to a Lender to compensate
                  such
                  Lender or its holding company for a liability to Taxes, increased
                  or
                  additional cost, reduction, payment, foregone return or loss pursuant
                  to
                  clause 12.2.6,

              

      

       

      then,
        without in any way limiting, reducing or otherwise qualifying the obligations
        of
        the Borrowers under clauses 6.7 and 12.1, the Facility Agent and the
        relevant Lender shall meet together and with the Borrowers to discuss in
        good
        faith (but without obligation) what steps may be open to the relevant Lender
        (or, as the case may be, its holding company) to mitigate or remove such
        circumstances. If the relevant Lender and the Borrowers are unable to agree
        such
        steps within thirty (30) days (or such longer period as they may agree) of
        the
        notice referred to in this clause 12.4 having been given, then the
        Borrowers shall be entitled to notify such Lender of its intention to prepay
        such Lender’s Contribution. The Borrowers shall make such prepayment within
        thirty (30) days of such notification and shall simultaneously pay to such
        Lender any reasonable expense which such Lender certifies as sustained or
        incurred by it as a consequence of such prepayment including any loss or
        expense
        sustained or incurred by such Lender in liquidating or re-employing deposits
        from third parties acquired to effect or maintain its Contribution. Upon
        receipt
        of the Borrowers’ notice of prepayment the Commitments of the relevant Lender
        shall be reduced to zero.

       

      
        	
                13  

              	
                Security
                  and set-off

              

      

       

      
        	
                13.1  

              	
                Application
                  of moneys

              

      

       

      If
        either
        (a) on any date on which a payment is due to be made by the Borrowers under
        this
        Agreement, the amount received by the Facility Agent from the Borrowers falls
        short of the total amount of the payment due to be made by the Borrowers
        on such
        date or (b) the Facility Agent, the Security Trustee and/or the Lenders receive
        moneys under or pursuant to any of the Security Documents that are expressed
        to
        be applicable in accordance with the provisions of this clause 13.1, then,
        without prejudice to any rights or remedies available to the Facility Agent,
        the
        Security Trustee and the Lenders under the Security Documents, such amount,
        if
        received by the Lenders shall be paid to the Facility Agent, and shall be
        applied by the Facility Agent in the following manner:

       

      
        	
                13.1.1  

              	
                first
                  in or toward payment, on a pari passu basis, of all unpaid fees,
                  commissions, costs and expenses which may be owing to any of the
                  Finance
                  Parties under any of the Security
                  Documents;

              

      

       

      
        	
                13.1.2  

              	
                secondly,
                  in or towards payment of any arrears of interest which have become
                  due but
                  remain unpaid;

              

      

       

      
        	
                13.1.3  

              	
                thirdly,
                  in or towards payment to the Lenders, on a pari passu basis, of
                  any
                  principal which has become due but remains
                  unpaid;

              

      

       

      
        	
                13.1.4  

              	
                fourthly,
                  in or towards payment to the Lenders for any loss suffered by reason
                  of
                  any such payment in respect of principal not being effected on
                  an Interest
                  Payment Date relating to the part of the Loan
                  repaid;

              

      

       

      
        	
                13.1.5  

              	
                fifthly,
                  in or towards payment to the Finance Parties of any other sums
                  (including
                  indemnity amounts) which have become due but remain unpaid under
                  any of
                  the Security Documents; and

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                13.1.6  

              	
                sixthly,
                  the surplus (if any) shall be paid to the Borrowers or to whomsoever
                  else
                  may be entitled to receive such
                  surplus.

              

      

       

      
        	
                13.2  

              	
                Set-off

              

      

       

      Each
        Borrower authorises each Lender (without prejudice to any of the Lenders’ rights
        at law, in equity or otherwise), at any time following the occurrence of
        an
        Event of Default which is continuing and unremedied at the applicable time
        and
        without notice to the Borrowers, to apply any credit balance to which the
        relevant Borrower is then entitled standing upon any account of the relevant
        Borrower with any branch of such Lender in or towards satisfaction of any
        sum
        due and payable from such Borrower to such Lender under any of the Security
        Documents.  For this purpose, each Lender is authorised to purchase
        with the moneys standing to the credit of such account such other currencies
        as
        may be necessary to effect such application.  No Lender shall be
        obliged to exercise any right given to it by this
        clause 13.2.  Each Lender shall notify the Facility Agent and the
        Borrowers forthwith upon the exercise or purported exercise of any right
        of
        set-off giving full details in relation thereto and the Facility Agent shall
        inform the other Lenders.

       

      
        	
                14  

              	
                Accounts

              

      

       

      
        	
                14.1  

              	
                General

              

      

       

      The
        Borrowers undertake with the Finance Parties that they will procure
        that:

       

      
        	
                14.1.1  

              	
                on
                  or before the Delivery Date for the First Ship, the Lessee shall
                  open the
                  Operating Account and the Collection Account with the Operating
                  Account
                  Bank and the relevant member of the Teekay Guarantor Group shall
                  open the
                  Retention Account with the Operating Account Bank;
                  and

              

      

       

      
        	
                14.1.2  

              	
                procure
                  that all moneys payable to the Lessee in respect of Earnings shall
                  be paid
                  to the Operating Account or, upon the occurrence of an Event of
                  Default
                  which is unwaived and continuing, the Collection
                  Account.

              

      

       

      
        	
                14.2  

              	
                Operation
                  of Operating Account and Collection
                  Account

              

      

       

      The
        Borrowers undertake to procure that the Operating Account and the Collection
        Account shall be operated by the Lessee in accordance with the provisions
        of the
        Account Pledge.

       

      
        	
                14.3  

              	
                Operation
                  of Retention Account

              

      

       

      The
        Borrowers undertake to procure that the Retention Account shall be operated
        by
        the relevant member of the Teekay Guarantor Group in accordance with the
        provisions of clause 8.6.24 and the Retention
        Account Pledge.

       

      
        	
                15  

              	
                Assignment,
                  transfer and lending office

              

      

       

      
        	
                15.1  

              	
                Benefit
                  and burden

              

      

       

      This
        Agreement shall be binding upon, and enure for the benefit of, the Finance
        Parties and the Borrowers and their respective successors including, without
        limitation, in the case of Calyon, any successor following an asset contribution
        or partial merger within the meaning of sections L-236 sqq. of the French
        Commercial Code.

       

      
        	
                15.2  

              	
                No
                  assignment by Borrowers

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        Borrowers may not assign or transfer any of its rights or obligations under
        this
        Agreement.

       

      
        	
                15.3  

              	
                Assignments
                  and transfers by Lenders

              

      

       

      
        	
                15.3.1  

              	
                Subject
                  to this clause 15.3 and to clause 17.4 of the Proceeds Deed, any
                  Lender (the “Existing Lender”) may at any time, assign
                  any of its rights or transfer any of its rights and obligations
                  under this
                  Agreement and the Security Documents to any other bank or financial
                  institution (a “New Lender”). The Existing Lender shall
                  give prior notice of such assignment or transfer to the Facility
                  Agent.
                  The consent of the Facility Agent to an assignment or transfer
                  is not
                  required.  The consent of the Borrowers is not required to an
                  assignment. An assignment will only be effective on receipt by
                  the
                  Facility Agent of written confirmation from the New Lender (in
                  form and
                  substance satisfactory to the Facility Agent) that the New Lender
                  will
                  assume the same obligations to the other Finance Parties as it
                  would have
                  been under if it was an Existing
                  Lender.

              

      

       

      
        	
                15.3.2  

              	
                A
                  transfer will only be effective if the procedure set out in clause 15.3.3 is complied with.  The consent
                  of the Borrowers to a transfer of a part of the KEXIM Tranche is
                  not
                  required, but KEXIM will consult in good faith with the
                  Borrowers.  The Existing Lender may transfer any part of the
                  Commercial Tranche to another branch of that Lender without the
                  Borrowers’
                  consent but a transfer to another bank or financial institution
                  shall be
                  subject to the prior written consent of the Borrowers, not to be
                  unreasonably withheld, provided that such consent shall not be
                  required if
                  an Event of Default has occurred and is continuing unremedied and
                  unwaived.

              

      

       

      
        	
                15.3.3  

              	
                No
                  such transfer is binding on, or effective in relation to, the Borrowers,
                  or the Facility Agent unless it is effected or evidenced by a Substitution
                  Certificate which complies with the provisions of this clause 15.3
                  and is signed by or on behalf of the Existing Lender, the New Lender
                  and
                  the Facility Agent (on behalf of itself, the Borrowers, the Security
                  Trustee and the other Lenders).  Upon signature of any such
                  Substitution Certificate by the Facility Agent, which signature
                  shall be
                  effected as promptly as is practicable after such Substitution
                  Certificate
                  has been delivered to the Facility Agent, and subject to the terms
                  of such
                  Substitution Certificate, such Substitution Certificate shall have
                  effect
                  as set out below. The following further provisions shall have effect
                  in
                  relation to any Substitution
                  Certificate:

              

      

       

      
        	
                (a)  

              	
                a
                  Substitution Certificate may be in respect of a Lender’s rights in respect
                  of all or part, of its Commitment and shall be in respect of the
                  same
                  proportion of its Contribution;

              

      

       

      
        	
                (b)  

              	
                a
                  Substitution Certificate shall only be in respect of rights and
                  obligations of the Existing Lender in its capacity as a Lender
                  and shall
                  not transfer its rights and obligations as an agent, or in any
                  other
                  capacity, as the case may be and such other rights and obligations
                  may
                  only be transferred in accordance with any applicable provisions
                  of this
                  Agreement;

              

      

       

      
        	
                (c)  

              	
                a
                  Substitution Certificate shall take effect in accordance with English
                  law
                  as follows:

              

      

       

      
        	
                (i)  

              	
                to
                  the extent specified in the Substitution Certificate, the Existing
                  Lender’s payment rights and all its other rights (other than those
                  referred to in sub-clause 15.3.3(b)) under this Agreement are
                  assigned to the New Lender absolutely, free of any defects in the
                  Existing
                  Lender’s title and of any rights or equities which the Borrowers had
                  against the Existing Lender;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (ii)  

              	
                the
                  Existing Lender’s Commitment is discharged to the extent specified in the
                  Substitution Certificate;

              

      

       

      
        	
                (iii)  

              	
                the
                  New Lender becomes a Lender with a Contribution and a Commitment
                  of the
                  amounts specified in the Substitution
                  Certificate;

              

      

       

      
        	
                (iv)  

              	
                the
                  New Lender becomes bound by all the provisions of this Agreement,
                  the
                  Agency Agreement and the other Security Documents which are applicable
                  to
                  the Lenders, including those about pro-rata sharing and the exclusion
                  of
                  liability on the part of, and the indemnification of, the Facility
                  Agent
                  in accordance with the provisions of the Agency Agreement and to
                  the
                  extent that the New Lender becomes bound by those provisions, the
                  Existing
                  Lender ceases to be bound by them;

              

      

       

      
        	
                (v)  

              	
                an
                  Advance or part of an Advance which the New Lender makes after
                  the
                  Substitution Certificate comes into effect ranks in point of priority
                  and
                  security in the same way as it would have ranked had it been made
                  by the
                  Existing Lender, assuming that any defects in the Existing Lender’s title
                  and any rights or equities of any Security Party against the Existing
                  Lender had not existed; and

              

      

       

      
        	
                (vi)  

              	
                the
                  New Lender becomes entitled to all the rights under this Agreement
                  which
                  are applicable to the Lenders, including but not limited to those
                  relating
                  to the Majority Lenders and those under clause 3.5, 5 and 12 and to
                  the extent that the New Lender becomes entitled to such rights,
                  the
                  Existing Lender ceases to be entitled to
                  them;

              

      

       

      
        	
                15.3.4  

              	
                the
                  rights and equities of the Borrowers or of any other Security Party
                  referred to above include, but are not limited to, any right of
                  set-off
                  and any other kind of cross-claim;
                  and

              

      

       

      
        	
                15.3.5  

              	
                the
                  Borrowers, the Security Trustee and the Lenders hereby irrevocably
                  authorise and instruct the Facility Agent to sign any such Substitution
                  Certificate on its behalf and undertake not to withdraw, revoke
                  or qualify
                  such authority or instruction at any time.  Promptly upon its
                  signature of any Substitution Certificate, the Facility Agent shall
                  notify
                  the Borrowers, the Security Trustee, the Existing Lender, the New
                  Lender
                  and each of the other Finance
                  Parties.

              

      

       

      
        	
                15.4  

              	
                Reliance
                  on Substitution
                  Certificate

              

      

       

      
        	
                15.4.1  

              	
                The
                  Facility Agent shall be entitled to rely on any Substitution Certificate
                  believed by it to be genuine and correct and to have been presented
                  or
                  signed by the persons by whom it purports to have been presented
                  or
                  signed, and shall not be liable to any of the parties to this Agreement
                  and the Security Documents for the consequences of such
                  reliance.

              

      

       

      
        	
                15.4.2  

              	
                The
                  Facility Agent shall at all times during the continuation of this
                  Agreement maintain a register in which it shall record the name,
                  Commitments, Contributions and administrative details (including
                  the
                  lending office) from time to time of the Lenders holding a Substitution
                  Certificate and the date at which the transfer referred to in such
                  Substitution Certificate held by each Lender was transferred to
                  such
                  Lender, and the Facility Agent shall make the said register available
                  for
                  inspection by any Lender and any Borrower during normal banking
                  hours upon
                  receipt by the Facility Agent of reasonable prior notice requesting
                  the
                  Facility Agent to do so.

              

      

       

      
        	
                15.4.3  

              	
                The
                  entries on the said register shall, in the absence of manifest
                  error, be
                  conclusive in determining the identities of the Commitments, the
                  Contributions and the Substitution Certificates held by the Lenders
                  from
                  time to time and the principal amounts of such Substitution Certificates
                  and may be relied upon by the Facility Agent and the other Security
                  Parties for all purposes in connection with this Agreement and
                  the
                  Security Documents.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                15.5  

              	
                Fees
                  and
                  expenses

              

      

       

      If
        any
        Lender other than KEXIM assigns or transfers of all or any part of its rights,
        benefits and/or obligations under the Security Documents, it shall pay to
        the
        Facility Agent on demand a fee of one thousand five hundred Dollars ($1,500)
        (for its own account) together with all costs, fees and expenses (including,
        but
        not limited to, legal fees and expenses), and all value added tax thereon,
        verified by the Facility Agent as having been incurred by it in connection
        with
        such transfer.

       

      
        	
                15.6  

              	
                Documenting
                  assignments and transfers

              

      

       

      If
        any
        Lender transfers all or any part of its rights, benefits and/or obligations
        as
        provided in clause 15.3, each of the Borrowers undertakes, immediately on
        being requested to do so by the Facility Agent and at the cost of the Existing
        Lender, to enter into, and procure that the other Security Parties shall
        enter
        into, such documents as may be necessary or desirable to transfer to the
        New
        Lender all or the relevant part of such Lender’s interest in the Security
        Documents and all relevant references in this Agreement to such Lender shall
        thereafter be construed as a reference to the Existing Lender and/or its
        New
        Lender (as the case may be) to the extent of their respective
        interests.

       

      
        	
                15.7  

              	
                Sub-participation

              

      

       

      A
        Lender
        may sub-participate all or any part of its rights and/or obligations under
        the
        Security Documents without the consent of the Borrowers but subject to giving
        prior written notice to the Facility Agent and the Borrowers.

       

      
        	
                15.8  

              	
                Lending
                  offices

              

      

       

      Each
        Lender shall lend through its office at the address specified in Schedule 1
        or, as the case may be, in any relevant Substitution Certificate or through
        any
        other office of such Lender selected from time to time by such Lender through
        which such Lender wishes to lend for the purposes of this Agreement
        (“Lending Office”).  If the office through which a
        Lender is lending is changed pursuant to this clause 15.8, such Lender
        shall notify the Facility Agent promptly of such change and the Facility
        Agent
        shall notify the Borrowers.

       

      
        	
                15.9  

              	
                Disclosure
                  of information

              

      

       

      Any
        Lender may disclose to a prospective transferee such information about the
        Borrowers as such Lender shall consider appropriate, subject to such Lender
        ensuring that the prospective transferee will observe, and confirms that
        it will
        observe, the terms of clause 32 (Confidentiality) of the Time Charters as
        if they applied to them directly.

       

      
        	
                15.10  

              	
                Increased
                  costs

              

      

       

      If
        (a) an
        Existing Lender transfers part or all of its rights, benefits and obligations
        under this Agreement pursuant to clause 15.3 or a Lender changes its
        Lending Office pursuant to clause 15.8 and (b) as a result of circumstances
        existing at the date such transfer or change occurs, the Borrowers would
        be
        obliged to make payment under clause 6.7 or 12.2 to the New Lender or the
        Lender that has changed its Lending Office, that New Lender or Lender shall
        only
        be entitled to receive payment under clause 6.7 or 12.2 to the same extent
        as the Existing Lender or Lender acting through its previous Lending Office
        would have been if the novation 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      or
        change
        had not occurred. The limitations on the New Lender or on a Lender that has
        changed is Lending Office in this clause 15.10 shall not apply where the
        transfer to the New Lender or change in Lending Office was made at the
        Borrowers’ request or where the payment or increased payment results from a
        change in law after the date of the transfer or change in question.

       

      
        	
                16  

              	
                Facility
                  Agent and Security Trustee

              

      

       

      
        	
                16.1  

              	
                Appointment
                  of the Facility Agent

              

      

       

      The
        terms
        and basis on which the Facility Agent has been appointed by the Lenders as
        facility agent are set out in the Agency Agreement including, among other
        things, the manner in which any decision to exercise any right, powers,
        discretion or authority or to carry out any duty are to be made between the
        Lenders and the Facility Agent.

       

      
        	
                16.2  

              	
                Appointment
                  of the Security Trustee

              

      

       

      The
        terms
        and basis on which the Security Trustee has been appointed by the Lenders
        as
        security trustee are set out in each Proceeds Deed including, amongst other
        things the manner in which any decision to exercise any right, power, discretion
        or authority to carry out any duty are to be made between the Lenders and
        the
        Security Trustee.

       

      
        	
                17  

              	
                Notices and other matters

              

      

       

      
        	
                17.1  

              	
                Notices

              

      

       

      Every
        notice, request, demand or other communication under this Agreement or (unless
        otherwise provided therein) under any of the other Security Documents
        shall:

       

      
        	
                17.1.1  

              	
                be
                  in writing, delivered personally or by first-class prepaid letter
                  (airmail
                  if available) or telefax and, in the case of notification of rates
                  of
                  interest by the Facility Agent or in the case of the delivery of
                  any
                  document by the Facility Agent, the Facility Agent may refer the
                  relevant
                  party or parties (by fax or letter) to a web site and to the location
                  of
                  the relevant information on such web site in discharge of such
                  notification or delivery
                  obligation;

              

      

       

      
        	
                17.1.2  

              	
                be
                  deemed to have been received, subject as otherwise provided in
                  the
                  relevant Security Document:

              

      

       

      
        	
                (a)  

              	
                in
                  the case of a letter, when delivered personally or seven (7) days
                  after it
                  has been put into the post;

              

      

       

      
        	
                (b)  

              	
                in
                  the case of a telefax, when a complete and legible copy is received
                  by the
                  addressee (unless the date of despatch is not a business day in
                  the
                  country of the addressee or, if the time of despatch is after the
                  close of
                  business in the country of the addressee, it shall be deemed to
                  have been
                  received at the opening of business on the next such business day);
                  and

              

      

       

      
        	
                (c)  

              	
                where
                  reference in such notice, request, demand or other communication
                  is made
                  to a web site, when the delivery of the letter or telefax referring
                  to the
                  addressee to such website is deemed to have been received pursuant
                  to the
                  other provisions of this
                  clause 17.1,

              

      

       

      provided
        that any notice, request, demand or communication which is to be sent, made
        or
        delivered to the Facility Agent will be effective only when actually received
        by
        the Facility Agent and then only if it is expressly marked for the attention
        of
        the department or the individual specified in clause 17.1.3 or any other
        individual that the Facility Agent shall specify pursuant to such
        clause 17.1.3; and

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                17.1.3  

              	
                be
                  sent:

              

      

       

      
        	
                (a)  

              	
                to
                  the Borrowers at:

              

      

       

      
        	
                (i)  

              	
                c/o
                  Teekay Shipping (Canada) Ltd

              

      

      Suite
        2000, Bentall 5,

      550
        Burrard Street,

      Vancouver,
        B.C. V6C 2K2

      Canada

      

      Telefax
        No:                    
+1 604 609 4775

      Attn:                           Vice
        President, Finance

      

      
        	
                (ii)  

              	
                c/o
                  Qatar Gas Transport Company Limited
                  (Nakilat)

              

      

      Doha

      POBox
        22271

      Qatar

      

      Fax
        No:                           
+974 467 2188

      Attn:                           Mr
        Robert P. Curt, Managing Director

      

      
        	
                (b)  

              	
                to
                  each Lender at its address or telefax number specified in Schedule 1
                  or in any relevant Substitution
                  Certificate.

              

      

       

      
        	
                (c)  

              	
                to
                  the Facility Agent at:

              

      

       

      Calyon

      9
        quai du
        President Paul Doumer

      92920
        Paris La Defense

      Cedex

      France

      

      Fax:                     
        (+33) 1 41 89 19 34

      Attn:              Shipping
        Department

       

      Copy
        to:

      

      Calyon,
        London Shipping Department

      122
        Leadenhall Street

      London EC3V
        4QH

      

      Fax:                   
         +44 20 7214 6689

      Attn:              Head
        of Shipping

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (d)  

              	
                to
                  the Security Trustee at:

              

      

       

      Calyon

      9
        quai du
        President Paul Doumer

      92920
        Paris La Defense

      Cedex

      France

      

      Fax:                    
        (+33) 1 41 89 19 34

      Attn:              Shipping
        Department

       

      Copy
        to:

       

      Calyon,
        London Shipping Department

      122
        Leadenhall Street

      London EC3V
        4QH

      

      Fax:                    
        +44 20 7214 6689

      Attn:              Head
        of Shipping

       

      or
        to
        such other address and/or number as is notified by the relevant party to
        the
        other parties to this Agreement by not less than five (5) Banking Days’ written
        notice.

       

      
        	
                17.2  

              	
                Notices
                  through the Facility Agent

              

      

       

      Every
        notice, request, demand or other communication under this Agreement to be
        given
        by the Borrowers to any other party shall be given to the Facility Agent
        specified in this Agreement for onward transmission as appropriate and to
        be
        given to the Borrowers shall (except as otherwise provided in this Agreement)
        be
        given by the Facility Agent.  Promptly upon receipt of notification of
        an address, fax number or (as the case may be) e-mail or change of address,
        fax
        number or e-mail pursuant to clause 17.1.3 or changing its own address, fax
        number or e-mail, the Facility Agent shall notify the other parties to this
        Agreement.

       

      
        	
                17.3  

              	
                No
                  implied waivers, remedies
                  cumulative

              

      

       

      No
        failure or delay on the part of the Facility Agent, the Security Trustee,
        the
        Arranger, the Lenders or any of them to exercise any power, right or remedy
        under any of the Security Documents shall operate as a waiver thereof (unless
        expressly agreed in writing by the Facility Agent), nor shall any single
        or
        partial exercise by the Facility Agent, the Security Trustee, the Arranger,
        the
        Lenders or any of them of any power, right or remedy preclude any other or
        further exercise thereof or the exercise of any other power, right or
        remedy.  The remedies provided in the Security Documents are
        cumulative and are not exclusive of any remedies provided by law.

       

      
        	
                17.4  

              	
                English
                  language

              

      

       

      All
        certificates, instruments and other documents to be delivered under or supplied
        in connection with any of the Security Documents shall be in the English
        language or shall be accompanied by a certified English translation upon
        which
        the Facility Agent, the Security Trustee, the Arranger and the Lenders shall
        be
        entitled to rely.

       

      
        	
                17.5  

              	
                Counterparts

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      This
        Agreement may be executed in any number of original counterparts and by
        facsimile provided that original signed copies are provided within a reasonable
        period of time thereafter. All such counterparts shall, once executed,
        constitute a single document.

       

      
        	
                17.6  

              	
                Further
                  assurance

              

      

       

      Each
        of
        the Borrowers undertakes that the Security Documents shall both at the date
        of
        execution and delivery thereof and so long as any moneys are owing under
        any of
        the Security Documents be valid and binding obligations of the respective
        parties thereto and rights of each Lender enforceable in accordance with
        their
        respective terms and that it will, at its expense, execute, sign, perfect
        and
        do, and will procure the execution, signing, perfecting and doing by each
        of the
        other Security Parties of, any and every such further assurance, document,
        act
        or thing as in the reasonable opinion of the Facility Agent (acting on the
        instructions of the Majority Lenders) may be necessary or desirable for
        perfecting the security contemplated or constituted by the Security
        Documents.

       

      
        	
                17.7  

              	
                Conflicts

              

      

       

      In
        the
        event of any conflict between this Agreement and any of the other Security
        Documents to which any or all of the Borrowers are party to, the provisions
        of
        this Agreement shall prevail.

       

      
        	
                17.8  

              	
                Borrowers'
                  obligations

              

      

       

      
        	
                17.8.1  

              	
                Joint
                  and several

              

      

       

      Notwithstanding
        anything to the contrary contained in any of the Security Documents, the
        agreements, obligations and liabilities of the Borrowers herein contained
        are
        joint and several and shall be construed accordingly.  Each of the
        Borrowers agrees and consents to be bound by the Security Documents to which
        it
        is, or is to be, a party notwithstanding that the other Borrowers which are
        intended to sign or to be bound may not do so or be effectually bound and
        notwithstanding that any of the Security Documents may be invalid or
        unenforceable against any of the other Borrowers, whether or not the deficiency
        is known to any of the Finance Parties.

       

      
        	
                17.8.2  

              	
                Borrowers
                  as principal debtors

              

      

       

      Each
        Borrower acknowledges and confirms that it is a principal and original debtor
        in
        respect of all amounts which may become payable by the Borrowers in accordance
        with the terms of this Agreement or any of the other Security Documents and
        agrees that the Finance Parties may also continue to treat it as such, whether
        or not any of the Finance Parties is or becomes aware that such Borrower
        is or
        has become a surety for another Borrower.

       

      
        	
                17.8.3  

              	
                Indemnity

              

      

       

      The
        Borrowers hereby agree jointly and severally to keep the Finance Parties
        fully
        indemnified on demand against all damages, losses, costs and expenses arising
        from any failure of any Borrower to perform or discharge any purported
        obligation or liability of a Borrower which would have been the subject of
        this
        Agreement had it been valid and enforceable and which is not or ceases to
        be
        valid and enforceable against a Borrower on any ground whatsoever, whether
        or
        not known to the Finance Parties (including, without limitation, any irregular
        exercise or absence of any corporate power or lack of authority of, or breach
        of
        duty by, any person purporting to act on behalf of a Borrower (or any legal
        or
        other limitation, whether under the Limitation Acts or otherwise or any
        disability or death

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      ,
        bankruptcy, unsoundness of mind, insolvency, liquidation, dissolution, winding
        up, administration, receivership, amalgamation, reconstruction or any other
        incapacity of any person whatsoever (including, in the case of a partnership,
        a
        termination or change in the composition of the partnership) or any change
        of
        name or style or constitution of any Security Party)).

       

      
        	
                17.8.4  

              	
                Liability
                  unconditional

              

      

       

      None
        of
        the obligations or liabilities of the Borrowers under this Agreement or any
        other Security Document shall be discharged or reduced by reason
        of:

       

      
        	
                (a)  

              	
                the
                  death, bankruptcy, unsoundness of mind, insolvency, liquidation,
                  dissolution, winding-up, administration, receivership, amalgamation,
                  reconstruction or other incapacity of any person whatsoever (including,
                  in
                  the case of a partnership, a termination or change in the composition
                  of
                  the partnership) or any change of name or style or constitution
                  of any
                  Borrower or any other person liable;
                  or

              

      

       

      
        	
                (b)  

              	
                any
                  of the Finance Parties granting any time, indulgence or concession
                  to, or
                  compounding with, discharging, releasing or varying the liability
                  of, a
                  Borrower or any other person liable or renewing, determining, varying
                  or
                  increasing any accommodation, facility or transaction or otherwise
                  dealing
                  with the same in any manner whatsoever or concurring in, accepting,
                  varying any compromise, arrangement or settlement or omitting to
                  claim or
                  enforce payment from a Borrower or any other person liable;
                  or

              

      

       

      
        	
                (c)  

              	
                anything
                  done or omitted which but for this provision might operate to exonerate
                  the Borrowers or any of them.

              

      

       

      
        	
                17.8.5  

              	
                Recourse
                  to other security

              

      

       

      The
        Finance Parties shall not be obliged to make any claim or demand or to resort
        to
        any Security Document or other means of payment now or hereafter held by
        or
        available to it for enforcing this Agreement or any of the Security Documents
        against a Borrower or any other person liable and no action taken or omitted
        by
        any of the Finance Parties in connection with any such Security Document
        or
        other means of payment will discharge, reduce, prejudice or affect the liability
        of the Borrowers under this Agreement and the Security Documents to which
        any of
        them is, or is to be, a party.

       

      
        	
                17.8.6  

              	
                Waiver
                  of Borrowers' rights

              

      

       

      Each
        Borrower agrees with the Finance Parties that, from the date of this Agreement
        and so long as any moneys are owing under any of the Security Documents and
        while all or any part of the Commitment remains outstanding, it will not,
        without the prior written consent of the Facility Agent:

       

      
        	
                (a)  

              	
                exercise
                  any right of subrogation, reimbursement and indemnity against any
                  other
                  Borrower or any other person liable;
                  or

              

      

       

      
        	
                (b)  

              	
                demand
                  or accept repayment in whole or in part of any Indebtedness now
                  or
                  hereafter due to such Borrower from any other Borrower or from
                  any other
                  person liable or demand or accept any guarantee, indemnity or other
                  assurance against financial loss or any document or instrument
                  created or
                  evidencing an Encumbrance in respect of the same or dispose of
                  the same;
                  or

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (c)  

              	
                take
                  any steps to enforce any right against any other Borrower or any
                  other
                  person liable in respect of any such moneys;
                  or

              

      

       

      
        	
                (d)  

              	
                claim
                  any set-off or counterclaim against any other Borrower or any other
                  person
                  liable or claiming or proving in competition with the Finance Parties
                  in
                  the liquidation of any other Borrower or any other person liable
                  or have
                  the benefit of, or share in, any payment from or composition with,
                  any
                  other Borrower or any other person liable or any other Security
                  Document
                  now or hereafter held by the Finance Parties for any moneys owing
                  under
                  this Agreement or for the obligations or liabilities of any other
                  person
                  liable but so that, if so directed by the Facility Agent, it will
                  prove
                  for the whole or any part of its claim in the liquidation of any
                  other
                  Borrower or other person liable on terms that the benefit of such
                  proof
                  and all money received by it in respect thereof shall be held on
                  trust for
                  the Finance Parties and applied in or towards discharge of any
                  moneys
                  owing under this Agreement in such manner as the Facility Agent
                  shall deem
                  appropriate.

              

      

       

      
        	
                17.9  

              	
                Teekay
                  LNG Partners L.P.

              

      

       

      The
        parties to this Agreement acknowledge that Teekay LNG Partners L.P.
        (“Teekay LNG”) may acquire the whole shareholding interest of
        the Teekay Guarantor in the Teekay Charterer or the Borrowers during the
        period
        falling between the Effective Date (as such term is defined in the Supplemental
        Agreement) and the first Delivery Date.  If Teekay LNG does in fact
        exercise its rights to acquire such an interest during this period, the parties
        agree, subject as provided below, to act in good faith in negotiating both
        the
        provision of a corporate guarantee from Teekay LNG in favour of the Security
        Trustee, guaranteeing the obligations of the Borrowers under the Security
        Documents in an amount of up to the percentage of the relevant shareholding
        interest of the aggregate amounts of the said obligations of the Borrowers
        and,
        at the same time, the release and discharge of all the obligations of the
        Teekay
        Guarantor under the Teekay Guarantee.  It is, however, recognised that
        the agreement of the Finance Parties to the provision of such a guarantee
        from
        Teekay LNG in replacement of the Teekay Guarantee is subject always to the
        obtaining by each of the Finance Parties of such further board and/or credit
        approval as may be necessary for the acceptance of a guarantee from Teekay
        LNG
        in replacement of the Teekay Guarantee (such approval to be in the relevant
        Finance Party’s absolute discretion), together with any consequential
        restructuring and amendment of the provisions of this Agreement and the other
        Security Documents (including the creation by Teekay LNG of equivalent security
        in favour of the Finance Parties over the shares in each applicable Borrower
        as
        that granted by the Teekay Charterer under the Security Documents) as the
        Finance Parties consider necessary.

       

      
        	
                18  

              	
                Governing law and jurisdiction

              

      

       

      
        	
                18.1  

              	
                Law

              

      

       

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

       

      
        	
                18.2  

              	
                Submission
                  to jurisdiction

              

      

       

      The
        parties to this Agreement agree for the benefit of the Finance Parties
        that:

       

      
        	
                18.2.1  

              	
                if
                  any party has any claim against any other arising out of or in
                  connection
                  with this Agreement such claim shall (subject to clause 18.2.3) be
                  referred to the High Court of Justice in England, to the jurisdiction
                  of
                  which each of the parties irrevocably
                  submits;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                18.2.2  

              	
                the
                  jurisdiction of the High Court of Justice in England over any such
                  claim
                  against any Finance Party shall be an exclusive jurisdiction and
                  no courts
                  outside England shall have jurisdiction to hear or determine any
                  such
                  claim; and

              

      

       

      
        	
                18.2.3  

              	
                nothing
                  in this clause 18.2 shall limit the right of a Finance Party to refer
                  any such claim against any of the Borrowers to any other court
                  of
                  competent jurisdiction outside England, to the jurisdiction of
                  which the
                  Borrower hereby irrevocably agrees to submit, nor shall the taking
                  of
                  proceedings by a Finance Party before the courts in one or more
                  jurisdictions preclude the taking of proceedings in any other jurisdiction
                  whether concurrently or not.

              

      

       

      The
        parties further agree that only the Courts of England and not those of any
        other
        State shall have jurisdiction to determine any claim which the Borrower may
        have
        against any of the Finance Parties arising out of or in connection with this
        Agreement.

       

      
        	
                18.3  

              	
                Agent
                  for service of process

              

      

       

      The
        Borrowers irrevocably designate, appoint and empower Teekay Shipping (UK)
        Limited of 49 St. James’s Street, London SW1A 1JT to receive for them and on
        their behalf service of process issued out of the High Court of Justice in
        England in relation to any claim arising out of or in connection with this
        Agreement.

       

      
        	
                18.4  

              	
                Waiver
                  of immunity

              

      

       

      Each
        of
        the Borrowers irrevocably and unconditionally:

       

      
        	
                (a)  

              	
                agrees
                  not to claim immunity from proceedings brought by any Finance Party
                  against it in relation to any of the Security Documents and to
                  ensure that
                  no such claim is made on its
                  behalf;

              

      

       

      
        	
                (b)  

              	
                consents
                  generally to the giving of any relief or the issue of any process
                  in
                  connection with any request for relief;
                  and

              

      

       

      
        	
                (c)  

              	
                waives
                  all rights of immunity in respect of itself or its
                  assets.

              

      

       

      
        	
                18.5  

              	
                Contracts
                  (Rights of Third Parties) Act
                  1999

              

      

       

      No
        term
        of this Agreement is enforceable under the Contracts (Rights of Third Parties)
        Act 1999 by a person who is not a party to this Agreement.

       

      IN WITNESS
        whereof the parties to this Agreement have caused this Agreement to be duly
        executed on the date first above written.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Schedule 1

       

      The
        Lenders and their addresses

       

      Part
        1

      

      
        	
                Name

              	
                Address
                  and fax number

              
	
                 

                The
                  Export-Import Bank of Korea

              	
                 

                Lending
                  Office

                The
                  Export – Import Bank Of Korea

                16-1,
                  Yoido-dong, Youngdeungpo-gu

                Seoul,
                  150-996

                Korea

                 

                Address
                  for Notices

                 

                The
                  Export – Import Bank Of Korea

                Ship
                  Financing Department

                16-1,
                  Yoido-dong, Youngdeungpo-gu

                Seoul,
                  150-996

                Korea

                 

                Fax:                      +
                  822 3779 6745

                Attn:

                 

              
	
                Calyon

              	
                 

                Lending
                  Office

                Calyon

                9
                  Quai du Président Paul Doumer,

                92920
                  Paris

                La
                  Defense Cedex

                France

                 

                Address
                  for Notices

                 

                Address:

                Calyon

                9
                  Quai du Président Paul Doumer,

                92920
                  Paris

                La
                  Défense Cedex

                France

                 

                Fax:+33
                  (0) 1 41 89 29 87

                Attn:Shipping
                  Department

                Copy
                  to:

                Calyon,
                  London Shipping Department

                122
                  Leadenhall Street

                London EC3V
                  4QH

                Fax:                      +44
                  20 7214 6689

                Attn:                    Head
                  of Shipping

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                DnB
                  NOR Bank ASA

              	
                Lending
                  Office

                DNB
                  Nor Bank ASA

                0021
                  Oslo

                Norway

                 

                Address
                  for Notices

                DNB
                  Nor Bank ASA

                0021
                  Oslo

                Norway

                 

                Fax:+47
                  22 48 20 20

                Attn:Credit
                  Administration

                Copy
                  to:Erik Papp

                Lars Hilles
                  gate 30

                Fax:+47
                  55 21 19 24

              
	
                The
                  Royal Bank of Scotland plc

              	
                 

                Lending
                  Office

                 

                Address:

                The
                  Royal Bank of Scotland plc

                Shipping
                  Business Centre

                5-10
                  Great Tower Street

                London
                  EC3P 3HX

                United
                  Kingdom

                 

                Address
                  for Notices

                 

                Address:

                The
                  Royal Bank of Scotland plc

                Shipping
                  Business Centre

                5-10
                  Great Tower Street

                London
                  EC3P 3HX

                United
                  Kingdom

                 

                Fax:    
                  +44 207 615 0112

                Attn:   
                  Colin Manchester

                 

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                ING
                  Bank N.V.

              	
                Lending
                  Office

                Address:

                ING
                  Bank N.V.

                60
                  London Wall

                London
                  EC2M 5TQ

                United
                  Kingdom

                Address
                  for Notices

                Address:

                ING
                  Bank N.V.

                60
                  London Wall

                London
                  EC2M 5TQ

                United
                  Kingdom

                Fax:+44
                  207 767 7252

                Attn:Hugh
                  Baker

              
	
                Nordea
                  Bank Norge ASA Grand Cayman Branch

              	
                 

                Lending
                  Office

                Nordea
                  Bank Norge ASA Grand Cayman Branch

                437
                  Madison Ave

                New
                  York, NY 10022

                 

                Address
                  for Notices (Credit Issues)

                Nordea
                  Bank Norge ASA Grand Cayman Branch

                437
                  Madison Ave

                New
                  York, NY 10022

                 

                Fax:          +
                  1 212 421
                  4420

                Attn:                            Hans
                  Christian Kjelsrud

                 

                Address
                  for Notices (Operational Issues)

                 

                Nordea
                  Bank Norge ASA Grand Cayman Branch

                437
                  Madison Ave

                New
                  York, NY 10022

                 

                Fax:              +
                  1 212 750 9188

                Attn:           Jacqueline
                  Ng

                 

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Part
        2

      Commitments
        of the Lenders

      

      
        	
                Name
                  of Lender

              	
                Maximum

                 total
                  

                Commitment

              	
                Commitment
                  

                to
                  Ship 

                Tranche
                  for 

                Hull
                  N°

                2238

              	
                Commitment
                  

                to
                  Ship 

                Tranche
                  for 

                Hull
                  N°

                2239

              	
                Commitment
                  

                to
                  Ship 

                Tranche
                  for 

                Hull
                  N°

                2240

              
	
                KEXIM

              	
                $299,589,135

              	
                $99,649,193

              	
                $99,861,474

              	
                $100,078,468

              
	
                Calyon

              	
                $34,518,888

              	
                $11,481,656

              	
                $11,506,115

              	
                $11,531,117

              
	
                DnB
                  NOR Bank ASA

              	
                $33,500,000

              	
                $11,142,754

              	
                $11,166,491

              	
                $11,190,755

              
	
                The
                  Royal Bank of Scotland

              	
                $33,500,000

              	
                $11,142,754

              	
                $11,166,491

              	
                $11,190,755

              
	
                ING
                  Bank N.V.

              	
                $33,500,000

              	
                $11,142,754

              	
                $11,166,491

              	
                $11,190,755

              
	
                Nordea
                  Bank Norge ASA Grand 

                Cayman
                  Branch

              	
                $33,500,000

              	
                $11,142,754

              	
                $11,166,491

              	
                $11,190,755

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule 2

       

      The
        Ships

       

      
        	
                Name
                  and Builder

              	
                Date
                  of Shipbuilding Contract

              	
                Type
                  of Ship

              	
                Scheduled
                  Delivery Date

              	
                Vessel
                  Cost $

              
	
                Hull
                  No. 2238

                at
                  Daewoo 

                Shipbuilding
                  & 

                Marine
                  

                Engineering
                  

                Co.,
                  Ltd

              	
                3
                  June

                2004

              	
                151,700
                  cbm 

                LNG

              	
                Last
                  

                Quarter
                  

                2006

              	
                194,627,331

              
	
                Hull
                  No. 2239 

                at
                  Daewoo 

                Shipbuilding
                  & 

                Marine
                  

                Engineering
                  

                Co.,
                  Ltd

              	
                3
                  June

                2004

              	
                151,700
                  cbm 

                LNG

              	
                First
                  

                Quarter
                  

                2007

              	
                195,041,941

              
	
                Hull
                  No. 2240 

                at
                  Daewoo 

                Shipbuilding
                  & 

                Marine
                  Engineering 

                Co.,
                  Ltd

              	
                3
                  June

                2004

              	
                151,700
                  cbm 

                LNG

              	
                Second
                  

                Quarter
                  

                2007

              	
                195,465,757

              

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule 3

      Form
        of Drawdown Notice

       

      (referred
        to in clause 2.2)

      

      To:           [Name
        and address of Facility Agent]

      [Date]

      $468,108,023
        Loan

      Loan
        Agreement dated l
        December 2004 (as amended and restated pursuant to the Supplemental Agreement
        dated [●] 2005)

       

      We
        refer
        to the above Loan Agreement and hereby give you notice that we wish to draw
        down

       

      [an
        Advance of $·
        under the Ship Tranche relative to the Deposit Payment to be made in respect
        of
        the [Initial Instalment] [Second/Third/Fourth/Delivery] Instalment under
        the
        Shipbuilding Contract for Hull No.[2238][2239][2240] on [Date].

       

      [The
        Deposit Payment in respect of the Instalment to which the Advance is to be
        applied has already been funded by us and we therefore require that such
        Advance
        be applied in refinancing the funding we have already made.]

       

      [The
        Advance requested is a Deposit Payment in respect of a Delivery Advance [and
        the
        following additional costs which are evidenced by the annexed supporting
        invoices: [●]] and the scheduled Delivery Date for the relevant Ship is · 200·]]:

       

      The
        first
        Interest Period for the Commercial Tranche of the Advance will be of [three]
        [six] month’s duration.  The first Interest Period for the KEXIM
        Tranche of the Advance will be of three (3) month’s duration]

       

      
        	 	 	 	 
	 	 	 	 

      

      

       

      We
        confirm that:

       

      
        	
                (a)  

              	
                no
                  Default has occurred and is
                  continuing;

              

      

       

      
        	
                (b)  

              	
                the
                  representations and warranties contained in clauses 7.1 and 7.2 of
                  the Loan Agreement and clauses 4.1 and 4.2 of the Teekay Guarantee
                  (and so that the representation and warranty in clause 4.1.6 of the
                  Teekay Guarantee shall for this purpose refer to the then latest
                  audited
                  financial statements delivered to the Security Trustee under
                  clause 5.1.4 of the Teekay Guarantee), clauses 4.1 and 4.2 of the
                  QGTC Guarantee (and so that the representation and warranty in
                  clause
                  4.1.6 of the QGTC Guarantee shall for this purpose refer to the
                  then
                  latest audited financial statements delivered to the Security Trustee
                  under clause 5.1.4 of the QGTC Guarantee) and clauses 2.1 and 2.2 of
                  the Lessee Assignments are true and correct at the date hereof
                  as if made
                  with respect to the facts and circumstances existing at such
                  date;

              

      

       

      
        	
                (c)  

              	
                no
                  breach of the terms either of the Shipbuilding Contracts or the
                  Refund
                  Guarantees or the Time Charters or any default thereunder has occurred
                  or
                  is continuing;

              

      

       

      
        	
                (d)  

              	
                each
                  of the conditions set out in Schedule 5, part 2 and, where
                  applicable, part 3 of the Loan Agreement have been satisfied or
                  waived in
                  respect of the making of the Advance(s) requested or will be satisfied
                  on
                  or before the relevant Drawdown Date or such date as the Facility
                  Agent
                  has provided in a waiver;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (e)  

              	
                no
                  amendments or variations have been agreed to any of the Shipbuilding
                  Contracts which would have required consent pursuant to
                  clauses 8.4.11 or 8.4.12 of the Loan Agreement and no action has been
                  taken by any Builder which might in any way render any of the Shipbuilding
                  Contracts inoperative or unenforceable, in whole or in part;
                  and

              

      

       

      
        	
                (f)  

              	
                the
                  borrowing to be effected by the drawdown of such Advance will be
                  within
                  our corporate powers, has been validly authorised by appropriate
                  corporate
                  action and will not cause any limit on our borrowings (whether
                  imposed by
                  statute, regulation, agreement or otherwise) to be
                  exceeded.

              

      

       

      Words
        and
        expressions defined in the Loan Agreement shall have the same meanings where
        used herein.

       

      

       

      

       

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

      For
        and
        on behalf of

      AL
        MARROUNA INC.

      

      

      
 

       

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

      For
        and
        on behalf of

      AL
        AREESH INC.

      

      

      

      

       

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

      For
        and
        on behalf of

      AL
        DAAYEN INC.

      

      

      

      

       

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

      For
        and
        on behalf of

      TEEKAY
        SHIPPING CORPORATION

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      

      

       

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

      For
        and
        on behalf of

      TEEKAY
        NAKILAT CORPORATION

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule 4

      Documents
        and evidence required as conditions precedent

       

      (referred
        to in clause 9.1)

       

      

      Part
        1

      1.           Security
        Parties’ constitutional documents

       

      copies,
        certified by the secretary, a director, an officer or a sole member, as the
        case
        may be of each of the Security Parties as true, complete and up to date copies
        of all documents which contain or establish or relate to the constitution
        or
        formation of each of the Security Parties;

       

      2.           Security
        Parties’ corporate authorisations

       

      copies
        of
        resolutions of the directors or sole member, as the case may be and, in respect
        of the Borrowers only, the shareholders of each of the Security Parties
        approving each of the relevant Transaction Documents to which such Security
        Parties are party and authorising the signature, delivery and performance
        of
        such Security Parties’ obligations thereunder, certified (in a certificate dated
        no earlier than five (5) Banking Days prior to the date of the Supplemental
        Agreement) by the secretary, a director or a sole member, as the case may
        be, of
        such Security Party as:

       

      (a)              being
        true and correct;

       

      (b)              being
        duly passed at meeting of the directors or sole member, as the case may be,
        of
        such Security Party duly convened and held;

       

      (c)              not
        having been amended, modified or revoked; and

       

      (d)              being
        in full force and effect

       

      together
        with originals or certified copies of any powers of attorney issued by such
        Security Parties pursuant to such resolutions;

       

      3.           Security
        Parties’ incumbency certificate

       

      an
        original certificate signed by a duly authorised signatory of each of the
        Security Parties no earlier than five (5) Banking Days prior to the date
        of the
        Supplemental Agreement certifying the names of the officers and directors
        of the
        relevant Security Party;

       

      4.           Security
        Parties’ process agent

       

      a
        copy,
        certified as a true copy by a duly authorised signatory of each of the Security
        Parties or other person acceptable to the Facility Agent of a letter from
        each
        of the Security Parties’ agent for receipt of service of proceedings referred to
        in clause 18.3 accepting its appointment under this Agreement and each of
        the other Security Documents in which it is or is to be appointed as the
        Security Parties’ agent and confirming that its appointment has become
        effective;

       

      5.           Lessor
        and Lessor Parent

       

      
        	
                (a)  

              	
                a
                  certified true copy of a certificate signed by an officer of the
                  Lessor
                  stating the names of the directors of the Lessor and attaching
                  certified
                  true copies of:

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (i)  

              	
                the
                  certificate of incorporation and memorandum and articles of
                  association of the Lessor;

              

      

       

      
        	
                (ii)  

              	
                a
                  copy of the board minutes of the Lessor authorising or
                  ratifying the execution of the Transaction Documents to which the
                  Lessor
                  is or is to be a party and authorising named officers or directors
                  of the
                  Lessor to execute such documents or to execute a power of attorney
                  authorising named attorneys to execute such documents;
                  and

              

      

       

      
        	
                (iii)  

              	
                a
                  copy of the power of attorney referred to at paragraph 5(a)(ii)
                  above; and

              

      

       

      
        	
                (b)  

              	
                a
                  letter confirming signing authority of Lessor Parent in respect
                  of the
                  Lessor Parent Support Letter;

              

      

       

      6.           Builder’s
        and Refund Guarantor’s signing authority

       

      evidence
        of the authority of the signatories on behalf of the Builder and the Refund
        Guarantor to execute the Transaction Documents to which they are a
        party;

       

      
        	
                7.

              	
                Fees

              

      

       

      evidence
        that the fees due under clauses 5.1.1 and 5.1.2 have been paid in
        full;

       

      8.           Security
        Documents

       

      original
        signed copies of all the Security Documents for all of the Ships (save for
        the
        Mortgages (including the Mortgage Transfers), the Account Pledge, the Consent
        and Agreements and the documents referred to in paragraph 9 of Part 2 to
        this Schedule 4) plus all ancillary documents in respect of such Security
        Documents;

       

      9.           Summary
        of documents

       

      a
        summary
        from the Lessee of the provisions of the internal management agreement between
        the Lessee and the member of the Teekay Guarantor Group who will act as the
        ship
        manager for the Ships in a form and on terms acceptable to the Facility
        Agent;

       

      10.           Agreed
        Forms

       

      an
        agreed
        form certificate annexing the agreed forms of the Mortgages (including the
        Mortgage Transfers), the Account Pledge and the Consent and
        Agreements;

       

      11.           Facility
        Agent approvals

       

      approval
        by the Facility Agent of the terms and conditions of:

       

      
        	
                (a)  

              	
                the
                  Leases;

              

      

       

      
        	
                (b)  

              	
                the
                  Novation Agreements and the Supervision
                  Agreements;

              

      

       

      
        	
                (c)  

              	
                the
                  Refund Guarantees;

              

      

       

      
        	
                (d)  

              	
                the
                  Time Charter Novation Agreements;
                  and

              

      

       

      
        	
                (e)  

              	
                any
                  amendments to the Original Time Charters pursuant to the Time Charter
                  Novation Agreements;

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      12.           Certified
        Copies

       

      copies,
        certified (in a certificate dated no earlier than five (5) Banking Days prior
        to
        the date of the Supplemental Agreement) as a true and complete copy by the
        lawyers representing each of the Borrowers or, as the case may be, the Lessee,
        of each of the Transaction Documents other than the Security
        Documents;

       

      13.           Legal
        opinions

       

      
        	
                (a)  

              	
                a
                  legal opinion of Norton Rose, English legal counsel to the Finance
                  Parties
                  in respect of the Security Documents governed by English
                  law;

              

      

       

      
        	
                (b)  

              	
                a
                  legal opinion of Cozen O’Connor, legal counsel to the Finance Parties on
                  matters of Marshall Islands law in respect of the Security Parties
                  incorporated or formed in the Marshall
                  Islands;

              

      

       

      
        	
                (c)  

              	
                a
                  legal opinion of Hassan Alkhater Law Office, legal counsel to the
                  Finance
                  Parties on matters of Qatari law in respect of QGTC;
                  and

              

      

       

      
        	
                (d)  

              	
                a
                  legal opinion of Kim & Chang, legal counsel to the Finance Parties on
                  matters of Korean law in respect of the Builder and the Refund
                  Guarantor;

              

      

       

      14.           Lease
        conditions precedent

       

      a
        certificate duly executed by the Lessor evidencing the satisfaction or waiver
        on
        terms satisfactory to the Lessor of all corresponding initial conditions
        precedent required to be satisfied by the Lessee under the Leases;
        and

       

      15.           Borrowers/Lessee
        inter-company arrangements

       

      a
        summary
        from the Borrowers of the provisions of the credit support and hedge
        arrangements between the Borrowers and the Lessee, and being in a form and
        on
        terms acceptable to and previously approved by the Facility Agent.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Part
        2

       

      Documents
        and evidence required as conditions precedent for each Advance (other than
        a
        Delivery Advance)

       

      1           Drawdown
        Notice

       

      the
        Drawdown Notice in respect of the relevant Advance duly executed;

       

      2           Conditions
        precedent

       

      evidence
        that the conditions precedent set out in Part 1 of Schedule 4 have been, or
        as the case may be, remain fully, satisfied;

       

      3           Updated
        corporate authorisations/certificates of incumbency

       

      evidence
        of the authority of the person(s) signing the Drawdown Notice, the Consent
        and
        Agreement and any notices and acknowledgements on behalf of the relevant
        Security Parties or, as the case may be, the Lessor or, as the case may be,
        the
        Builder or, as the case may be, the Time Charterer or, as the case may be,
        the
        Refund Guarantor;

       

      4           Fees
        and commissions

       

      payment
        of any fees and commissions due from the Borrowers to the Facility Agent
        pursuant to the terms of clause 5.1 or any other provision of the Security
        Documents;

       

      5           Equity
        contribution

       

      in
        respect of the First Advance under each Ship Tranche, evidence that the Lessor
        has paid the First Instalment under the relevant Shipbuilding Contract to
        the
        Builder pursuant to the payment by the Lessor of the Initial Instalment in
        respect of the relevant Shipbuilding Contract in respect of which a Deposit
        Payment is to be made or, as the case may be, has been made;

       

      6           Class
        confirmation

       

      a
        copy of
        the relevant stage certificate to be issued by the Builder under the relevant
        Shipbuilding Contract countersigned on behalf of the Classification Society,
        confirming that the relevant construction stage to which such certificate
        relates has been reached;

       

      7           Commercial
        invoice and receipt

       

      a
        commercial invoice from the Builder in relation to the Subsequent Instalment
        in
        respect of which a Deposit Payment is to be made or, as the case may be,
        has
        been made and which is to be financed or refinanced in whole or in part by
        such
        Advance and a receipt from such Builder addressed to the Lessor evidencing
        the
        payment of any previously paid Subsequent Instalment;

       

      8           Refund
        Guarantee(s)

       

      an
        original copy of any additional or supplemental Refund Guarantee;

       

      9           Notice
        and acknowledgements

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                 

              	
                in
                  respect of the First Advance under each Ship Tranche only, originals
                  of
                  (a) the Shipbuilding Contract Notices and Acknowledgements duly
                  signed by
                  the Lessor, the Lessee, the Replacement Purchaser and the Builder
                  and (b)
                  the Refund Guarantee Notices and Acknowledgements for each Refund
                  Guarantee that has been issued to the Lessor duly signed by the
                  Lessor,
                  the Lessee, the Replacement Purchaser and the Refund
                  Guarantor;

              

      

       

      10           Quiet
        Enjoyment

       

      
        	
                 

              	
                in
                  respect of the First Advance under each Ship Tranche only, duly
                  signed
                  original of the relevant Consent and
                  Agreement;

              

      

       

      
        	
                11

              	
                Lease
                  condition precedent

              

      

       

      a
        certificate duly executed by the Lessor evidencing the satisfaction or waiver
        on
        terms satisfactory to the Lessor of all corresponding conditions precedent
        required to be satisfied by the Lessee under the Lease in respect of the
        payment
        of the applicable Subsequent Instalment; and

       

      12           Lessor
        Proceeds Account

       

      in
        respect of the First Advance under each Ship Tranche only, evidence that
        the
        relevant Lessor Proceeds Account has been opened with the Proceeds Account
        Bank
        and at least one Dollar ($1) has been deposited therein.

       

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Part
        3

       

      Documents
        and evidence required as conditions precedent for each Delivery
        Advance

      

       

      
        	
                1  

              	
                Drawdown
                  Notice

              

      

       

      the
        Drawdown Notice in respect of the relevant Delivery Advance duly
        executed;

       

      
        	
                2  

              	
                Updated
                  corporate authorisations/certificates of
                  incumbency

              

      

       

      evidence
        of the authority of the person(s) signing the Drawdown Notice, the relevant
        Mortgage (including the Mortgage Transfer) and (in respect of the first Delivery
        Advance only) the Account Pledge on behalf of the Borrowers, the Lessor and
        the
        Lessee;

       

      
        	
                3  

              	
                Fees
                  and commissions

              

      

       

      payment
        of any fees and commissions due from the Borrowers to the Facility Agent
        pursuant to the terms of clause 5.1 or any other provision of the Security
        Documents;

       

      
        	
                4  

              	
                Ship
                  conditions

              

      

       

      evidence
        that the Ship in relation to which the Advance is being made:

       

      
        	
                (a)  

              	
                Registration
                  and Encumbrances

              

      

       

      will
        on
        the Delivery Date be registered or provisionally registered in the name of
        the
        Lessor under the laws and flag of the Flag State and that such Ship will
        be free
        of Encumbrances (other than Permitted Encumbrances but excluding any Permitted
        Liens); and

       

      
        	
                (b)  

              	
                Insurance

              

      

       

      will
        be
        insured in accordance with the provisions of the Security Documents and all
        requirements of the Security Documents in respect of such insurance have
        been
        complied with (including without limitation, confirmation from the protection
        and indemnity association or other insurer with which the Ship is, or is
        to be,
        entered for insurance or insured against protection and indemnity risks
        (including oil pollution risks) that any necessary declarations required
        by the
        association or insurer for the removal of any oil pollution exclusion have
        been
        made and that any such exclusion does not apply to the Ship);

       

      
        	
                5  

              	
                Delivery

              

      

       

      evidence
        that the Builder does not have any claims against the relevant Ship or the
        Lessor and is ready upon payment of the relevant Delivery Instalment to deliver
        the relevant Ship to the Lessor;

       

      
        	
                6  

              	
                Security
                  Documents

              

      

       

      the
        relevant Mortgage (including the relevant Mortgage Transfer) for the relevant
        Ship duly executed;

       

      
        	
                7

              	
                Valuation

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                 

              	
                copies
                  of the valuations for the Ship made in accordance with
                  clause 8.2.2.

              

      

       

      8           Commercial
        invoice in respect of the relevant Ship

       

      a
        copy of
        the draft commercial invoice addressed by the Builder to the Lessor in respect
        of the relevant Ship and, if applicable, invoices in respect of any additional
        vessel costs described in paragraph (b) of the definition of “Vessel
        Costs”;

       

      9           Notices
        of assignment

       

      copies
        of
        duly executed notices of assignment required by the terms of the Security
        Documents and in the forms prescribed by the Security Documents (other than
        the
        notices referred to in paragraph 9 of Part 2 of this
        Schedule 4);

       

      11           Legal
        Opinion

       

      
        	
                 

              	
                in
                  respect of the first Delivery Advance only, a legal opinion of
                  Norton
                  Rose, French legal counsel to the Finance Parties in respect of
                  the
                  Account Pledge; and

              

      

       

      12           Accounts
        and Account Pledges

       

      in
        respect of the first Delivery
        Advance only:

       

      
        	
                (a)  

              	
                evidence
                  that the Operating Account and the Collection Account have been
                  opened
                  with the Operating Account Bank and at least one Dollar ($1) has
                  been
                  deposited in the Operating Account and at least one thousand Dollars
                  ($1,000) has been deposited in the Collection
                  Account;

              

      

       

      
        	
                (b)  

              	
                the
                  Account Pledge in respect of the Operating Account and the Collection
                  Account duly executed;

              

      

       

      
        	
                (c)  

              	
                evidence
                  that the Retention Account has been opened with the Operating Account
                  Bank
                  and at least one Dollar ($1) has been deposited therein;
                  and

              

      

       

      
        	
                (d)  

              	
                the
                  Retention Account Pledge in respect of the Retention Amount duly
                  executed.

              

      

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Part
        4

       

      Documents
        and evidence required as conditions precedent for each
        Delivery

       

      
        	
                1  

              	
                Ship
                  conditions

              

      

       

      evidence
        that the Ship in relation to which the Delivery Advance is being
        made:

       

      
        	
                (a)  

              	
                Registration
                  and Encumbrances

              

      

       

      will
        immediately upon delivery be registered in the name of the relevant Borrower
        under the laws and flag of the Flag State and that such Ship is free of
        Encumbrances other than the Mortgage; and

       

      
        	
                (b)  

              	
                Classification

              

      

       

      maintains
        the Classification free of all requirements and recommendations of the
        Classification Society;

       

      2           Protocols
        of Delivery and Acceptance

       

      the
        relevant Shipbuilding Contract Protocol of Delivery and Acceptance, the relevant
        Lease Protocol of Delivery and Acceptance and the relevant Time Charter Protocol
        of Delivery and Acceptance duly executed by the relevant parties;

       

      3           Mortgage
        registration

       

      evidence
        that immediately upon delivery of the Ship the relevant Mortgage (including
        the
        relevant Mortgage Transfer) will be registered against such Ship under the
        laws
        and flag of the Flag State;

       

      4           Insurances

       

      the
        Agent
        shall have received the following:

       

      (a)              evidence
        that the Insurances have been effected in accordance with
        clause 8.5;

       

      
        	
                 

              	
                (b)

              	
                a
                  letter of undertaking in a form acceptable to the Facility Agent
                  addressed
                  to the Security Trustee by the Approved Brokers or agreement of
                  the
                  Approved Brokers to issue a letter of undertaking in a form agreed
                  by the
                  Security Trustee; and

              

      

       

      
        	
                 

              	
                (c)

              	
                an
                  opinion from such insurance consultants to the Facility Agent as
                  the
                  Facility Agent may require on the insurances effected or to be
                  effected in
                  respect of the relevant Ship upon and following the relevant Delivery
                  Date
                  or agreement of the insurance consultants to issue an opinion in
                  a form
                  agreed by the Security Trustee;

              

      

       

      5           Bahamas
        opinion

       

      an
        opinion in respect of the relevant Mortgage (including the relevant Mortgage
        Transfer) of [Higgs & Johnson], special legal advisers on matters of Bahamas
        law to the Finance Parties;

       

      6           DOC
        and SMC

       

      a
        certified true copy of the DOC of the Operator of the relevant Ship and either
        (a) a certified true copy of the SMC for the relevant Ship or (b) evidence
        satisfactory to the Facility Agent that the Operator for the relevant Ship
        has
        applied to the relevant Regulatory Agency for an SMC for such Ship to be
        issued
        pursuant to the ISM Code within any time-limit required or recommended by
        such
        Regulatory Agency;

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      7           ISPS
        Code

       

      
        	
                 

              	
                evidence
                  that the Lessee and the relevant Ship are in compliance with the
                  ISPS Code
                  and regulations issued by any relevant Regulatory Agency in respect
                  of the
                  ISPS Code;

              

      

       

      8           Ship
        certificates

       

      evidence
        that on or immediately following delivery of the Ship, the Facility Agent
        will
        receive copies of each of the following trading certificates:

      

      
        	
                (a)  

              	
                Builder's
                  certificate and/or Bill of Sale;

              

      

       

      
        	
                (b)  

              	
                Certificate
                  of registry; and

              

      

       

      
        	
                (c)  

              	
                Classification
                  certificate (hull & machinery);
                  and

              

      

       

      9           Lease
        Conditions Precedent

       

      
        	
                 

              	
                a
                  certificate duly executed by the Lessor evidencing the satisfaction
                  or
                  waiver on terms satisfactory to the Lessor of all corresponding
                  conditions
                  precedent required to be satisfied by the Lessee under the Lease
                  in
                  respect of the payment of the relevant Delivery Instalment and
                  the
                  delivery of the relevant Ship under the
                  Lease.

              

      

       

      

       

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Schedule 5

       

      Form
        of Substitution Certificate

       

      (referred
        to in clause 15.3)

      

      SUBSTITUTION
        CERTIFICATE

      

      Lenders
        are advised not to employ Substitution Certificates or otherwise to assign
        or
        transfer interests in the Loan Agreement without further ensuring that the
        transaction complies with all applicable laws and regulations, including
        the
        Financial Services Act 1986 and regulations made thereunder and similar statutes
        which may be in force in other jurisdictions

       

      To:           Calyon,
        as facility agent on its own behalf and on behalf of the Borrowers, the Security
        Trustee and the Lenders defined in the Loan Agreement referred to
        below.

       

      [Date]

       

      Attention:    •

       

      This
        certificate (“Substitution Certificate”) relates to a loan
        agreement dated • December 2004 (the “Loan Agreement”) and made
        between (1) Al Marrouna Inc., Al Areesh Inc., and Al Daayen Inc. (the
“Borrowers”), (2) The Export-Import Bank of Korea and the banks
        and financial institutions defined therein as Commercial Lenders (together
        the
“Lenders”), (3) Calyon as Arranger (4) Calyon as Facility Agent
        and (5) Calyon as Security Trustee; for a loan of up to
        $468,108,023.  Terms defined in the Loan Agreement shall, unless
        otherwise defined herein, have the same meanings herein as therein.

       

      In
        this
        Certificate:

       

      the
        “Existing Lender” means [full name] of
        [lending office]; and

       

      the
        “New Lender” means [full name] of
        [lending office].

       

      
        	
                1  

              	
                The
                  Existing Lender with full title guarantee assigns to the New Lender
                  absolutely all rights and interests (present, future or contingent)
                  which
                  the Existing Lender has as a Lender under or by virtue of the Loan
                  Agreement, the Agency Agreement and all the Security Documents
                  in relation
                  to [   ] per cent. ([   ]%) of the
                  Contribution of the Existing Lender (or its predecessors in title)
                  details
                  of which are set out below:

              

      

       

      
        	
                 

                Date
                  of

                Advances

              	
                 

                Amount
                  of Advances

                or
                  Ship Tranche

              	
                 

                Existing
                  Lender’s Contribution

                to
                  Advances or Ship Tranches

                 

              	
                 

                Maturity
                  Date

              
	 	 	 	 
	 	 	 	 
	 	 	 	 

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                2  

              	
                By
                  virtue of this Substitution Certificate and clause 15 of the Loan
                  Agreement, the Existing Lender is discharged [entirely from its
                  Available
                  Commitment which amounts to
                  $[          ]] [from
                  [   ] per cent.
                  ([       ]%) of its Available
                  Commitment, which percentage represents
                  $[          ]].

              

      

       

      
        	
                3  

              	
                The
                  New Lender hereby requests the Borrowers, the Facility Agent, the
                  Security
                  Trustee and the Lenders to accept the executed copies of this Substitution
                  Certificate as being delivered pursuant to and for the purposes
                  of
                  clause 15.3 of the Loan Agreement so as to take effect in accordance
                  with the terms thereof on [date of
                  transfer].

              

      

       

      
        	
                4  

              	
                The
                  New Lender:

              

      

       

      
        	
                (a)  

              	
                confirms
                  that it has received a copy of the Loan Agreement, the Agency Agreement
                  and the other Security Documents together with such other documents
                  and
                  information as it has required in connection with the transaction
                  contemplated thereby;

              

      

       

      
        	
                (i)  

              	
                confirms
                  that it has not relied and will not hereafter rely on the Existing
                  Lender
                  or the Facility Agent to check or enquire on its behalf into the
                  legality,
                  validity, effectiveness, adequacy, accuracy or completeness of
                  the Loan
                  Agreement, the Agency Agreement, any of the Security Documents
                  or any such
                  documents or information;

              

      

       

      
        	
                (ii)  

              	
                agrees
                  that it has not relied and will not rely on the Existing Lender,
                  the
                  Facility Agent, the Security Trustee or the Lenders to assess or
                  keep
                  under review on its behalf the financial condition, creditworthiness,
                  condition, affairs, status or nature of the Borrowers, or any other
                  Security Party (save as otherwise expressly provided
                  therein);

              

      

       

      
        	
                (iii)  

              	
                warrants
                  that it has power and authority to become a party to the Loan Agreement
                  and the Agency Agreement and has taken all necessary action to
                  authorise
                  execution of this Substitution Certificate and to obtain all necessary
                  approvals and consents to the assumption of its obligations under
                  the Loan
                  Agreement, the Agency Agreement and the Security
                  Documents;

              

      

       

      
        	
                (iv)  

              	
                acknowledges
                  and accepts the provisions of paragraph 4(iii) above;
                  and

              

      

       

      
        	
                (v)  

              	
                if
                  not already a Lender, appoints the Facility Agent and the Security
                  Trustee
                  to act, respectively, as its agent and security trustee as provided
                  in the
                  Loan Agreement and the Security Documents and agrees to be bound
                  by the
                  terms of the Loan Agreement.

              

      

       

      
        	
                5  

              	
                The
                  Existing Lender:

              

      

       

      
        	
                (a)  

              	
                warrants
                  to the New Lender that it has full power to enter into this Substitution
                  Certificate and has taken all corporate action necessary to authorise
                  it
                  to do so;

              

      

       

      
        	
                (i)  

              	
                warrants
                  to the New Lender that this Substitution Certificate is binding
                  on the
                  Existing Lender under the laws of England, the country in which
                  the
                  Existing Lender is incorporated and the country in which its lending
                  office is located; and

              

      

       

      
        	
                (ii)  

              	
                agrees
                  that it will, at its own expense, execute any documents which the
                  New
                  Lender reasonably requests for perfecting in any relevant jurisdiction
                  the
                  New Lender’s title under this Substitution Certificate or for a similar
                  purpose.

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                6  

              	
                The
                  New Lender hereby undertakes with the Existing Lender and each
                  of the
                  other parties to the Loan Agreement and the other Security Documents
                  that
                  it will perform in accordance with its terms all those obligations
                  which
                  by the terms of the Loan Agreement, the Agency Agreement and the
                  other
                  Security Documents will be assumed by it after delivery of the
                  executed
                  copies of this Substitution Certificate to the Facility Agent and
                  satisfaction of the conditions (if any) subject to which this Substitution
                  Certificate is expressed to take
                  effect.

              

      

       

      
        	
                7  

              	
                By
                  execution of this Substitution Certificate on their behalf by the
                  Facility
                  Agent and in reliance upon the representations and warranties of
                  the New
                  Lender, the Borrowers and the Finance Parties accept the New Lender
                  as a
                  party to the Loan Agreement and the Security Documents with respect
                  to all
                  those rights and/or obligations which by the terms of the Loan
                  Agreement
                  and the Security Documents will be assumed by the New Lender (including
                  those about pro-rata sharing and the exclusion of liability on
                  the part
                  of, and the indemnification of, the Facility Agent as provided
                  by the Loan
                  Agreement and the Agency Agreement) after delivery of the executed
                  copies
                  of this Substitution Certificate to the Facility Agent and satisfaction
                  of
                  the conditions (if any) subject to which this Substitution Certificate
                  is
                  expressed to take effect.

              

      

       

      
        	
                8  

              	
                None
                  of the Existing Lender or the other Finance
                  Parties:

              

      

       

      
        	
                (a)  

              	
                makes
                  any representation or warranty nor assumes any responsibility with
                  respect
                  to the legality, validity, effectiveness, adequacy or enforceability
                  of
                  the Loan Agreement or any of the Security Documents or any document
                  relating thereto; or

              

      

       

      
        	
                (b)  

              	
                assumes
                  any responsibility for the financial condition of the Borrowers
                  or any
                  other Security Party or any party to any such other document or
                  for the
                  performance and observance by the Borrowers or any other Security
                  Party or
                  any party to any such other document (save as otherwise expressly
                  provided
                  therein) and any and all such conditions and warranties, whether
                  express
                  or implied by law or otherwise, are hereby excluded (except as
                  aforesaid).

              

      

       

      
        	
                9  

              	
                The
                  Existing Lender and the New Lender each undertake that they will
                  on demand
                  fully indemnify the Facility Agent in respect of any claim, proceeding,
                  liability or expense which relates to or results from this Substitution
                  Certificate or any matter concerned with or arising out of it unless
                  caused by the Facility Agent’s gross negligence or wilful misconduct, as
                  the case may be.

              

      

       

      
        	
                10  

              	
                The
                  Existing Lender hereby declares that its rights as a beneficiary
                  of the
                  securities created pursuant to those of the Security Documents
                  governed by
                  French law are expressly reserved in accordance with Article 1278 of
                  the French Civil Code (Code Civil) and such reservation is hereby
                  expressly acknowledged and accepted by the New
                  Lender.

              

      

       

      In
        addition, the Existing Lender and the New Lender hereby undertake to notify
        the
        Borrowers of such reservation of rights and to obtain the acknowledgement
        thereof from the Borrowers.

       

      
        	
                11  

              	
                The
                  agreements and undertakings of the New Lender in this Substitution
                  Certificate are given to and for the benefit of and made with each
                  of the
                  other parties to the Loan Agreement and the Security
                  Documents.

              

      

       

      
        	
                12  

              	
                This
                  Substitution Certificate is governed by, and shall be construed
                  in
                  accordance with, English law.

              

      

       

      Existing
        Lender                                                                  New
        Lender

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      By:                                                                       By:

       

      Dated:                                                                  Dated:

       

      Agent

       

      Agreed
        for and on behalf of itself as Facility Agent, the Security Trustee

      the
        Borrower, the Arranger and the Lenders

       

      CALYON

       

      By:

       

      Dated:

       

      Note:                      The
        execution of this Substitution Certificate alone may not transfer a
        proportionate share of the Existing Lender’s interest in the security
        constituted by the Security Documents in the Existing Lender’s or New Lender’s
        jurisdiction.  It is the responsibility of the New Lender to ascertain
        whether any other documents are required to perfect a transfer of such a
        share
        in the Existing Lender’s interest in such security in any such jurisdiction and,
        if so, to seek appropriate advice and arrange for execution of the
        same.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      The
        Schedule

       

      

      Outstanding
        Contribution: $•

      Commitment:
        $•

      Portion
        Transferred: •%

      

      Administrative
        Details of Transferee

      

      Name
        of
        New Lender:

      Lending
        Office:

      Contact
        Person

      (Loan
        Administration Department):

      

      Telephone:

      Telefax
        No:

      

      Contact
        Person

      (Credit
        Administration Department):

      Telephone:

      Telefax
        No:

      

      Account
        for payments:

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule 6

       

      Repayment
        Schedules

       

      Part
        A

      

      (Commercial
        Lenders Tranche)

      

      
        	
                Repayment
                  Date

              	
                Ship
                  Tranche

                (Hull
                  N°2238) ($)

              	
                Ship
                  Tranche

                (Hull
                  N°2239) ($)

              	
                Ship
                  Tranche

                (Hull
                  N°2240) ($)

              
	
                1

              	
                0

              	
                0

              	
                0

              
	
                2

              	
                0

              	
                0

              	
                0

              
	
                3

              	
                0

              	
                0

              	
                0

              
	
                4

              	
                0

              	
                0

              	
                0

              
	
                5

              	
                0

              	
                0

              	
                0

              
	
                6

              	
                0

              	
                0

              	
                0

              
	
                7

              	
                0

              	
                0

              	
                0

              
	
                8

              	
                0

              	
                0

              	
                0

              
	
                9

              	
                0

              	
                0

              	
                0

              
	
                10

              	
                0

              	
                0

              	
                0

              
	
                11

              	
                0

              	
                0

              	
                0

              
	
                12

              	
                0

              	
                0

              	
                0

              
	
                13

              	
                0

              	
                0

              	
                0

              
	
                14

              	
                0

              	
                0

              	
                0

              
	
                15

              	
                0

              	
                0

              	
                0

              
	
                16

              	
                0

              	
                0

              	
                0

              
	
                17

              	
                0

              	
                0

              	
                0

              
	
                18

              	
                0

              	
                0

              	
                0

              
	
                19

              	
                0

              	
                0

              	
                0

              
	
                20

              	
                0

              	
                0

              	
                0

              
	
                21

              	
                0

              	
                0

              	
                0

              
	
                22

              	
                0

              	
                0

              	
                0

              
	
                23

              	
                0

              	
                0

              	
                0

              
	
                24

              	
                0

              	
                0

              	
                0

              
	
                25

              	
                0

              	
                0

              	
                0

              
	
                26

              	
                0

              	
                0

              	
                0

              
	
                27

              	
                0

              	
                0

              	
                0

              
	
                28

              	
                0

              	
                0

              	
                0

              
	
                29

              	
                0

              	
                0

              	
                0

              
	
                30

              	
                0

              	
                0

              	
                0

              
	
                31

              	
                0

              	
                0

              	
                0

              
	
                32

              	
                0

              	
                0

              	
                0

              
	
                33

              	
                0

              	
                0

              	
                0

              
	
                34

              	
                0

              	
                0

              	
                0

              
	
                35

              	
                0

              	
                0

              	
                0

              
	
                36

              	
                0

              	
                0

              	
                0

              
	
                37

              	
                0

              	
                0

              	
                0

              
	
                38

              	
                0

              	
                0

              	
                0

              
	
                39

              	
                0

              	
                0

              	
                0

              
	
                40

              	
                0

              	
                0

              	
                0

              
	
                41

              	
                0

              	
                0

              	
                0

              
	
                42

              	
                0

              	
                0

              	
                0

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                43

              	
                0

              	
                0

              	
                0

              
	
                44

              	
                0

              	
                0

              	
                0

              
	
                45

              	
                0

              	
                0

              	
                0

              
	
                46

              	
                0

              	
                0

              	
                0

              
	
                47

              	
                0

              	
                0

              	
                0

              
	
                final
                  maturity date

              	
                56,052,671

              	
                56,172,079

              	
                56,294,138

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Part
        B

      

      (KEXIM
        Tranche)

      

      
        	
                Tranche
                  A Vessel 2238

              
	 	
                Drawdown

              	
                Repayment

              	
                Loan
                  Outstanding

              
	
                31-Oct-06

              	
                $99,649,193

              	
                 

              	
                $99,649,193

              
	
                31-Jan-07

              	
                 

              	
                $2,076,025

              	
                $97,573,168

              
	
                30-Apr-07

              	
                 

              	
                $2,076,025

              	
                $95,497,143

              
	
                31-Jul-07

              	
                 

              	
                $2,076,025

              	
                $93,421,118

              
	
                31-Oct-07

              	
                 

              	
                $2,076,025

              	
                $91,345,094

              
	
                31-Jan-08

              	
                 

              	
                $2,076,025

              	
                $89,269,069

              
	
                30-Apr-08

              	
                 

              	
                $2,076,025

              	
                $87,193,044

              
	
                31-Jul-08

              	
                 

              	
                $2,076,025

              	
                $85,117,019

              
	
                31-Oct-08

              	
                 

              	
                $2,076,025

              	
                $83,040,994

              
	
                31-Jan-09

              	
                 

              	
                $2,076,025

              	
                $80,964,969

              
	
                30-Apr-09

              	
                 

              	
                $2,076,025

              	
                $78,888,944

              
	
                31-Jul-09

              	
                 

              	
                $2,076,025

              	
                $76,812,920

              
	
                31-Oct-09

              	
                 

              	
                $2,076,025

              	
                $74,736,895

              
	
                31-Jan-10

              	
                 

              	
                $2,076,025

              	
                $72,660,870

              
	
                30-Apr-10

              	
                 

              	
                $2,076,025

              	
                $70,584,845

              
	
                31-Jul-10

              	
                 

              	
                $2,076,025

              	
                $68,508,820

              
	
                31-Oct-10

              	
                 

              	
                $2,076,025

              	
                $66,432,795

              
	
                31-Jan-11

              	
                 

              	
                $2,076,025

              	
                $64,356,770

              
	
                30-Apr-11

              	
                 

              	
                $2,076,025

              	
                $62,280,746

              
	
                31-Jul-11

              	
                 

              	
                $2,076,025

              	
                $60,204,721

              
	
                31-Oct-11

              	
                 

              	
                $2,076,025

              	
                $58,128,696

              
	
                31-Jan-12

              	
                 

              	
                $2,076,025

              	
                $56,052,671

              
	
                30-Apr-12

              	
                 

              	
                $2,076,025

              	
                $53,976,646

              
	
                31-Jul-12

              	
                 

              	
                $2,076,025

              	
                $51,900,621

              
	
                31-Oct-12

              	
                 

              	
                $2,076,025

              	
                $49,824,596

              
	
                31-Jan-13

              	
                 

              	
                $2,076,025

              	
                $47,748,572

              
	
                30-Apr-13

              	
                 

              	
                $2,076,025

              	
                $45,672,547

              
	
                31-Jul-13

              	
                 

              	
                $2,076,025

              	
                $43,596,522

              
	
                31-Oct-13

              	
                 

              	
                $2,076,025

              	
                $41,520,497

              
	
                31-Jan-14

              	
                 

              	
                $2,076,025

              	
                $39,444,472

              
	
                30-Apr-14

              	
                 

              	
                $2,076,025

              	
                $37,368,447

              
	
                31-Jul-14

              	
                 

              	
                $2,076,025

              	
                $35,292,423

              
	
                31-Oct-14

              	
                 

              	
                $2,076,025

              	
                $33,216,398

              
	
                31-Jan-15

              	
                 

              	
                $2,076,025

              	
                $31,140,373

              
	
                30-Apr-15

              	
                 

              	
                $2,076,025

              	
                $29,064,348

              
	
                31-Jul-15

              	
                 

              	
                $2,076,025

              	
                $26,988,323

              
	
                31-Oct-15

              	
                 

              	
                $2,076,025

              	
                $24,912,298

              
	
                31-Jan-16

              	
                 

              	
                $2,076,025

              	
                $22,836,273

              
	
                30-Apr-16

              	
                 

              	
                $2,076,025

              	
                $20,760,249

              
	
                31-Jul-16

              	
                 

              	
                $2,076,025

              	
                $18,684,224

              
	
                31-Oct-16

              	
                 

              	
                $2,076,025

              	
                $16,608,199

              
	
                31-Jan-17

              	
                 

              	
                $2,076,025

              	
                $14,532,174

              
	
                30-Apr-17

              	
                 

              	
                $2,076,025

              	
                $12,456,149

              
	
                31-Jul-17

              	
                 

              	
                $2,076,025

              	
                $10,380,124

              
	
                31-Oct-17

              	
                 

              	
                $2,076,025

              	
                $8,304,099

              
	
                31-Jan-18

              	
                 

              	
                $2,076,025

              	
                $6,228,075

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                30-Apr-18

              	
                 

              	
                $2,076,025

              	
                $4,152,050

              
	
                31-Jul-18

              	
                 

              	
                $2,076,025

              	
                $2,076,025

              
	
                31-Oct-18

              	
                 

              	
                $2,076,025

              	
                $0

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      
        	
                Tranche
                  B Vessel 2239

              
	 	
                Drawdown

              	
                Repayment

              	
                Loan
                  Outstanding

              
	
                10-Jan-07

              	
                $99,861,474

              	
                 

              	
                $99,861,474

              
	
                10-Apr-07

              	
                 

              	
                $2,080,447

              	
                $97,781,027

              
	
                10-Jul-07

              	
                 

              	
                $2,080,447

              	
                $95,700,579

              
	
                10-Oct-07

              	
                 

              	
                $2,080,447

              	
                $93,620,132

              
	
                10-Jan-08

              	
                 

              	
                $2,080,447

              	
                $91,539,685

              
	
                10-Apr-08

              	
                 

              	
                $2,080,447

              	
                $89,459,237

              
	
                10-Jul-08

              	
                 

              	
                $2,080,447

              	
                $87,378,790

              
	
                10-Oct-08

              	
                 

              	
                $2,080,447

              	
                $85,298,342

              
	
                10-Jan-09

              	
                 

              	
                $2,080,447

              	
                $83,217,895

              
	
                10-Apr-09

              	
                 

              	
                $2,080,447

              	
                $81,137,448

              
	
                10-Jul-09

              	
                 

              	
                $2,080,447

              	
                $79,057,000

              
	
                10-Oct-09

              	
                 

              	
                $2,080,447

              	
                $76,976,553

              
	
                10-Jan-10

              	
                 

              	
                $2,080,447

              	
                $74,896,106

              
	
                10-Apr-10

              	
                 

              	
                $2,080,447

              	
                $72,815,658

              
	
                10-Jul-10

              	
                 

              	
                $2,080,447

              	
                $70,735,211

              
	
                10-Oct-10

              	
                 

              	
                $2,080,447

              	
                $68,654,763

              
	
                10-Jan-11

              	
                 

              	
                $2,080,447

              	
                $66,574,316

              
	
                10-Apr-11

              	
                 

              	
                $2,080,447

              	
                $64,493,869

              
	
                10-Jul-11

              	
                 

              	
                $2,080,447

              	
                $62,413,421

              
	
                10-Oct-11

              	
                 

              	
                $2,080,447

              	
                $60,332,974

              
	
                10-Jan-12

              	
                 

              	
                $2,080,447

              	
                $58,252,527

              
	
                10-Apr-12

              	
                 

              	
                $2,080,447

              	
                $56,172,079

              
	
                10-Jul-12

              	
                 

              	
                $2,080,447

              	
                $54,091,632

              
	
                10-Oct-12

              	
                 

              	
                $2,080,447

              	
                $52,011,184

              
	
                10-Jan-13

              	
                 

              	
                $2,080,447

              	
                $49,930,737

              
	
                10-Apr-13

              	
                 

              	
                $2,080,447

              	
                $47,850,290

              
	
                10-Jul-13

              	
                 

              	
                $2,080,447

              	
                $45,769,842

              
	
                10-Oct-13

              	
                 

              	
                $2,080,447

              	
                $43,689,395

              
	
                10-Jan-14

              	
                 

              	
                $2,080,447

              	
                $41,608,948

              
	
                10-Apr-14

              	
                 

              	
                $2,080,447

              	
                $39,528,500

              
	
                10-Jul-14

              	
                 

              	
                $2,080,447

              	
                $37,448,053

              
	
                10-Oct-14

              	
                 

              	
                $2,080,447

              	
                $35,367,605

              
	
                10-Jan-15

              	
                 

              	
                $2,080,447

              	
                $33,287,158

              
	
                10-Apr-15

              	
                 

              	
                $2,080,447

              	
                $31,206,711

              
	
                10-Jul-15

              	
                 

              	
                $2,080,447

              	
                $29,126,263

              
	
                10-Oct-15

              	
                 

              	
                $2,080,447

              	
                $27,045,816

              
	
                10-Jan-16

              	
                 

              	
                $2,080,447

              	
                $24,965,369

              
	
                10-Apr-16

              	
                 

              	
                $2,080,447

              	
                $22,884,921

              
	
                10-Jul-16

              	
                 

              	
                $2,080,447

              	
                $20,804,474

              
	
                10-Oct-16

              	
                 

              	
                $2,080,447

              	
                $18,724,026

              
	
                10-Jan-17

              	
                 

              	
                $2,080,447

              	
                $16,643,579

              
	
                10-Apr-17

              	
                 

              	
                $2,080,447

              	
                $14,563,132

              
	
                10-Jul-17

              	
                 

              	
                $2,080,447

              	
                $12,482,684

              
	
                10-Oct-17

              	
                 

              	
                $2,080,447

              	
                $10,402,237

              
	
                10-Jan-18

              	
                 

              	
                $2,080,447

              	
                $8,321,790

              
	
                10-Apr-18

              	
                 

              	
                $2,080,447

              	
                $6,241,342

              
	
                10-Jul-18

              	
                 

              	
                $2,080,447

              	
                $4,160,895

              
	
                10-Oct-18

              	
                 

              	
                $2,080,447

              	
                $2,080,447

              
	
                10-Jan-19

              	
                 

              	
                $2,080,447

              	
                $0

              
	
                 

              	
                 

              	
                 

              	
                 

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                Tranche
                  C Vessel 2240

                 

              
	 	
                Drawdown

              	
                Repayment

              	
                Loan
                  Outstanding

              
	
                30-Apr-07

              	
                $100,078,468

              	
                 

              	
                $100,078,468

              
	
                30-Jul-07

              	
                 

              	
                $2,084,968

              	
                $97,993,500

              
	
                30-Oct-07

              	
                 

              	
                $2,084,968

              	
                $95,908,532

              
	
                30-Jan-08

              	
                 

              	
                $2,084,968

              	
                $93,823,564

              
	
                30-Apr-08

              	
                 

              	
                $2,084,968

              	
                $91,738,596

              
	
                30-Jul-08

              	
                 

              	
                $2,084,968

              	
                $89,653,628

              
	
                30-Oct-08

              	
                 

              	
                $2,084,968

              	
                $87,568,660

              
	
                30-Jan-09

              	
                 

              	
                $2,084,968

              	
                $85,483,691

              
	
                30-Apr-09

              	
                 

              	
                $2,084,968

              	
                $83,398,723

              
	
                30-Jul-09

              	
                 

              	
                $2,084,968

              	
                $81,313,755

              
	
                30-Oct-09

              	
                 

              	
                $2,084,968

              	
                $79,228,787

              
	
                30-Jan-10

              	
                 

              	
                $2,084,968

              	
                $77,143,819

              
	
                30-Apr-10

              	
                 

              	
                $2,084,968

              	
                $75,058,851

              
	
                30-Jul-10

              	
                 

              	
                $2,084,968

              	
                $72,973,883

              
	
                30-Oct-10

              	
                 

              	
                $2,084,968

              	
                $70,888,915

              
	
                30-Jan-11

              	
                 

              	
                $2,084,968

              	
                $68,803,947

              
	
                30-Apr-11

              	
                 

              	
                $2,084,968

              	
                $66,718,979

              
	
                30-Jul-11

              	
                 

              	
                $2,084,968

              	
                $64,634,011

              
	
                30-Oct-11

              	
                 

              	
                $2,084,968

              	
                $62,549,043

              
	
                30-Jan-12

              	
                 

              	
                $2,084,968

              	
                $60,464,074

              
	
                30-Apr-12

              	
                 

              	
                $2,084,968

              	
                $58,379,106

              
	
                30-Jul-12

              	
                 

              	
                $2,084,968

              	
                $56,294,138

              
	
                30-Oct-12

              	
                 

              	
                $2,084,968

              	
                $54,209,170

              
	
                30-Jan-13

              	
                 

              	
                $2,084,968

              	
                $52,124,202

              
	
                30-Apr-13

              	
                 

              	
                $2,084,968

              	
                $50,039,234

              
	
                30-Jul-13

              	
                 

              	
                $2,084,968

              	
                $47,954,266

              
	
                30-Oct-13

              	
                 

              	
                $2,084,968

              	
                $45,869,298

              
	
                30-Jan-14

              	
                 

              	
                $2,084,968

              	
                $43,784,330

              
	
                30-Apr-14

              	
                 

              	
                $2,084,968

              	
                $41,699,362

              
	
                30-Jul-14

              	
                 

              	
                $2,084,968

              	
                $39,614,394

              
	
                30-Oct-14

              	
                 

              	
                $2,084,968

              	
                $37,529,426

              
	
                30-Jan-15

              	
                 

              	
                $2,084,968

              	
                $35,444,457

              
	
                30-Apr-15

              	
                 

              	
                $2,084,968

              	
                $33,359,489

              
	
                30-Jul-15

              	
                 

              	
                $2,084,968

              	
                $31,274,521

              
	
                30-Oct-15

              	
                 

              	
                $2,084,968

              	
                $29,189,553

              
	
                30-Jan-16

              	
                 

              	
                $2,084,968

              	
                $27,104,585

              
	
                30-Apr-16

              	
                 

              	
                $2,084,968

              	
                $25,019,617

              
	
                30-Jul-16

              	
                 

              	
                $2,084,968

              	
                $22,934,649

              
	
                30-Oct-16

              	
                 

              	
                $2,084,968

              	
                $20,849,681

              
	
                30-Jan-17

              	
                 

              	
                $2,084,968

              	
                $18,764,713

              
	
                30-Apr-17

              	
                 

              	
                $2,084,968

              	
                $16,679,745

              
	
                30-Jul-17

              	
                 

              	
                $2,084,968

              	
                $14,594,777

              
	
                30-Oct-17

              	
                 

              	
                $2,084,968

              	
                $12,509,809

              
	
                30-Jan-18

              	
                 

              	
                $2,084,968

              	
                $10,424,840

              
	
                30-Apr-18

              	
                 

              	
                $2,084,968

              	
                $8,339,872

              
	
                30-Jul-18

              	
                 

              	
                $2,084,968

              	
                $6,254,904

              
	
                30-Oct-18

              	
                 

              	
                $2,084,968

              	
                $4,169,936

              
	
                30-Jan-19

              	
                 

              	
                $2,084,968

              	
                $2,084,968

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                30-Apr-19

              	
                 

              	
                $2,084,968

              	
                $0

              
	
                 

              	
                 

              	
                 

              	
                 

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule 7

       

      Indicative
        Schedule of Advances

       

      

      
        	
                 

              	
                Hull
                  2238

              	
                 

              	
                Hull
                  2239

              	
                 

              	 	
                Hull
                  2240

              	 
	
                Instalment

              	
                Commercial

              	
                KEXIM

              	
                Total

              	
                Commercial

              	
                KEXIM

              	
                Total

              	
                Commercial

              	
                KEXIM

              	
                Total

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                Second
                  - Steel Cutting

              	
                $14,013,167.75

              	
                $24,912,298.25

              	
                $38,925,466.00

              	
                $14,043,019.75

              	
                $24,965,368.50

              	
                $39,008,388.25

              	
                $14,073,534.50

              	
                $25,019,617.00

              	
                $39,093,151.50

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                Third
                  - Keel Laying

              	
                $14,013,167.75

              	
                $24,912,298.25

              	
                $38,925,466.00

              	
                $14,043,019.75

              	
                $24,965,368.50

              	
                $39,008,388.25

              	
                $14,073,534.50

              	
                $25,019,617.00

              	
                $39,093,151.50

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                Fourth
                  - Launching

              	
                $14,013,167.75

              	
                $24,912,298.25

              	
                $38,925,466.00

              	
                $14,043,019.75

              	
                $24,965,368.50

              	
                $39,008,388.25

              	
                $14,073,534.50

              	
                $25,019,617.00

              	
                $39,093,151.50

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                Delivery

              	
                $14,013,167.75

              	
                $24,912,298.25

              	
                $38,925,466.00

              	
                $14,043,019.75

              	
                $24,965,368.50

              	
                $39,008,388.25

              	
                $14,073,534.50

              	
                $25,019,617.00

              	
                $39,093,151.50

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                TOTAL

              	
                $56,052,671.00

              	
                $99,649,193.00

              	
                $155,701,864.00

              	
                $56,172,079.00

              	
                $99,861,474.00

              	
                $156,033,553.00

              	
                $56,294,138.00

              	
                $100,078,468.00

              	
                $156,372,606.00

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	
                $468,108,023.00

              

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Execution
        Page

      

      Borrowers

      

      SIGNED
        by                                                                                 )

      for
        and
        on behalf
        of                                                                   )

      AL
        MARROUNA
        INC.                                                             )

      pursuant
        to a Power of
        Attorney                                            )     ..................................

                            )     Attorney
        in-fact

      

      

      SIGNED
        by                                                                                )

      for
        and
        on behalf
        of                                                                  )

      AL
        AREESH
        INC.                                                                     )

      pursuant
        to a Power of
        Attorney                                           
)     ..................................

                           )     Attorney
        in-fact

      

      

      SIGNED
        by                                                                                 )

      for
        and
        on behalf
        of                                                                   )

      AL
        DAAYEN
        INC.                                                                     )

      pursuant
        to a Power of
        Attorney                                            )     ..................................

                            )     Attorney
        in-fact

      

      

      

      

      Facility
        Agent

      

      SIGNED
        by                                                                                )

      for
        and
        on behalf
        of                                                                  )

      CALYON                                                                                   )     ..................................

      as
        Facility Agent pursuant to
        a                                              )     Attorney-in-fact

      Power
        of
        Attorney                                                                    )

      

      

      

      

      

      Security
        Trustee

      

      SIGNED
        by                                                                                )

      for
        and
        on behalf
        of                                                                  )

      CALYON                                                                                   )     ..................................

      as
        Security Trustee pursuant to
        a                                          )     Attorney-in-fact

      Power
        of
        Attorney                                                                    )

      

      

      

      

      Arranger

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SIGNED
        by                                                                               )

      for
        and
        on behalf
        of                                                               
 )

      CALYON                                                                                  )     ..................................

      as
        Arranger pursuant to
        a                                                      )     Attorney-in-fact

      Power
        of
        Attorney                                                                  
)

      
        
                    

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      KEXIM

      

      SIGNED
        by                                                                                    )

      for
        and
        on behalf
        of                                                                      )     ..................................

      THE
        EXPORT-IMPORT BANK OF
        KOREA                          )

      

      

      

      The
        Commercial Lenders

      

      SIGNED
        by                                                                                    )

      for
        and
        on behalf
        of                                                                     
)

      CALYON                                                                                       )     ..................................

      as
        a
        Commercial Lender pursuant to
        a                                     
 )     Attorney-in-fact

      Power
        of
        Attorney                                                                       
)

      

      

      SIGNED
        by                                                                                    )

      for
        and
        on behalf
        of                                                                      )

      DnB
        NOR BANK
        ASA                                                               
)     ..................................

      as
        a
        Commercial Lender pursuant to
        a                                       )     Attorney-in-fact

      Power
        of
        Attorney                                                                         )

      

      

      SIGNED
        by                                                                                    )

      for
        and
        on behalf
        of                                                                     
)

      THE
        ROYAL BANK OF SCOTLAND
        PLC                           
)           ..................................

      as
        a
        Commercial Lender pursuant to
        a                                       )     Attorney-in-fact

      Power
        of
        Attorney                                                                        )

      

      

      SIGNED
        by                                                                                    )

      for
        and
        on behalf
        of                                                                      )

      ING
        BANK
        N.V.                                                                           
)     ..................................

      as
        a
        Commercial Lender pursuant to
        a                                       )     Attorney-in-fact

      Power
        of
        Attorney                                                                        )

      

      

      SIGNED
        by                                                                                    )

      for
        and
        on behalf
        of                                                                      )

      NORDEA
        BANK NORGE
        ASA                                                 )

      GRAND
        CAYMAN
        BRANCH                                                  
 )     ..................................

      as
        a
        Commercial Lender pursuant to
        a                                     
 )     Attorney-in-fact

      Power
        of
        Attorney                                                                      
 )

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                 Date            2006

              

      

       

       

       

       

      AL
        MARROUNA INC. (formerly DSME HULL NO. 2238 INC.),

      AL
        AREESH INC. (formerly DSME HULL NO. 2239 INC.)

      and
        AL DAAYEN INC. (formerly DSME HULL NO. 2240 INC.

       as
        joint and several Borrowers  (1)

       

      CALYON

      as
        Arranger  (2) 

       

      CALYON

      as
        Facility Agent (3)

       

      CALYON

      as
        Security Trustee (4)

       

      THE
        EXPORT-IMPORT BANK OF KOREA

      as
        loan provider (5)

       

      THE
        BANKS AND FINANCIAL INSTITUTIONS

      whose
        names and addresses are set out in

      Schedule
        1 as Commercial Lenders (6)

       

      TEEKAY
        NAKILAT (II) LIMITED

      as
        Lessee (7)

       

      TEEKAY
        NAKILAT CORPORATION (8)

      as
        Shareholder

       

      QATAR
        GAS TRANSPORT COMPANY

      LIMITED
        (NAKILAT) (9)

      as
        guarantor

       

      and

       

      TEEKAY
        SHIPPING CORPORATION (10)

      as
        Original Guarantor
 
                                                                         

       

                                                                         
 
      
        	 
	 
                SECOND
                  SUPPLEMENTAL AGREEMENT

                relating
                  to a US$468,108,023 loan to

                finance
                  three LNG tankers to be time chartered to Ras Laffan Liquefied
                  Natural

                Gas
                  Company Limited II

                 

              
	 

      

      
      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Contents

       

       

       

    

     

    
      
        	 Clause Page	
                           
                  Page

              
	 1         Definitions 	 2
	 2         Consent
                of the Finance Parties	 3
	 3         Amendments
                to Original Loan Agreement 	 3
	 4         Representations
                and warranties	 4
	 5         Conditions	 5
	 6         Relevant
                Parties’ confirmations 	 6
	 7         Expenses 	 7
	 8         Miscellaneous
                and notices	 8
	
                 9         Applicable
                  law 

              	 8
	
                 

                Schedule 1
                  The Lenders

              	
                 

                 10

              
	 Schedule 2
                Documents and evidence required as conditions precedent	 14
	 Schedule 3
                Amendments to Original Loan Agreement 	 16
	 Schedule 4
                Form of Effective Date Notice	 18
	 Schedule 5
                Form of New Guarantee 	 19

      

    

     

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    THIS
      SECOND SUPPLEMENTAL AGREEMENT is
      dated          August 2006 and
      made BETWEEN:

     

    
      	
              (1)  

            	
              AL
                MARROUNA INC. (formerly DSME HULL NO. 2238 INC.), AL
                AREESH INC. (formerly DSME HULL NO. 2239 INC.) and AL
                DAAYEN INC. (formerly DSME HULL NO. 2240 INC.) as joint and
                several Borrowers;

            

    

     

    
      	
              (2)  

            	
              CALYON
                as Arranger;

            

    

     

    
      	
              (3)  

            	
              CALYON
                as Facility Agent;

            

    

     

    
      	
              (4)  

            	
              CALYON
                as Security Trustee;

            

    

     

    
      	
              (5)  

            	
              THE
                EXPORT-IMPORT BANK OF KOREA as
                KEXIM;

            

    

     

    
      	
              (6)  

            	
              THE
                BANKS AND FINANCIAL INSTITUTIONS whose names and addresses are
                set out in Schedule 1 (the “Commercial Lenders” and,
                together with KEXIM, the
                “Lenders”);

            

    

     

    
      	
              (7)  

            	
              TEEKAY
                NAKILAT (II) LIMITED as
                Lessee;

            

    

     

    
      	
              (8)  

            	
              TEEKAY
                NAKILAT CORPORATION as
                Shareholder;

            

    

     

    
      	
              (9)  

            	
              QATAR
                GAS TRANSPORT COMPANY LIMITED (NAKILAT) as QGTC;
                and

            

    

     

    
      	
              (10)  

            	
              TEEKAY
                SHIPPING CORPORATION (the “Original
                Guarantor”).

            

    

     

    WHEREAS:

     

    
      	
              (A)  

            	
              this
                Agreement is supplemental to a loan agreement dated 15 December 2004,
                as
                amended and restated pursuant to a supplemental agreement dated 15
                December 2005 (as so amended and restated, the “Original Loan
                Agreement”) made between (1) the Borrowers, (2) the Arranger, (3)
                the Facility Agent, (4) the Security Trustee, (5) KEXIM and (6) the
                Commercial Lenders, pursuant to which the Lenders agreed to make
                available
                to the Borrowers jointly and severally a loan of up to an aggregate
                amount
                of four hundred and sixty eight million, one hundred and eight thousand
                and twenty three Dollars ($468,108,023) upon the terms and conditions
                therein set out, to be used for the purposes of financing part of
                the cost
                of the purchase of the Ships;

            

    

     

    
      	
              (B)  

            	
              by
                a corporate guarantee dated 15 December 2004, as amended by a supplemental
                letter dated 15 December 2005 and a waiver letter dated 20 January
                2006
                (as so amended, the “Original Guarantee”) made between
                the Original Guarantor and (2) the Security Trustee, the Original
                Guarantor agreed to guarantee the obligations of the Borrowers to
                the
                Lenders under the Original Loan Agreement and the other Security
                Documents; and

            

    

     

    
      	
              (C)  

            	
              the
                Borrowers have requested, (1) that the Commercial Lenders consent
                to an
                amendment to the Original Loan Agreement to reflect a proposed change
                to
                the interest margin payable to the Commercial Lenders and (2) as
                contemplated by clause 17.9 of the Original Loan Agreement, the Lenders
                agree to the provision of a new guarantee by Teekay LNG Partners
                L.P. (the
                “New Guarantor”) and this Agreement sets out the terms
                and conditions upon which the Finance Parties shall, at the request
                of the
                Borrowers, agree to such changes.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    NOW
      IT IS HEREBY AGREED as follows:

     

    
      	
              1  

            	
              Definitions

            

    

     

    
      	
              1.1  

            	
              Defined
                expression

            

    

     

    Words
      and
      expressions defined in the Loan Agreement (as defined below) shall unless the
      context otherwise requires or unless otherwise defined herein, have the same
      meanings when used in this Agreement.

     

    
      	
              1.2  

            	
              Definitions

            

    

     

    In
      this
      Agreement unless the context otherwise requires:

     

    “Effective
      Date” means the date on which the Effective Date Notice is executed and
      dated by the Facility Agent;

     

    “Effective
      Date Notice” means a notice in the form set out in Schedule
      4;

     

    “Loan
      Agreement” means the Original Loan Agreement as amended by this
      Agreement;

     

    “New
      Guarantee” means the guarantee executed or to be executed by the New
      Guarantor in favour of the Security Trustee in respect of the obligations of
      the
      Borrowers to the Finance Parties under the Loan Agreement and the Security
      Documents in the form set out in Schedule 5;

     

    “Relevant
      Documents” means this Agreement and the New Guarantee together with all
      notices, consents, certificates and other documents and agreements issued or,
      as
      the case may be, to be issued pursuant to the matters referred to in Recital
      (C)
      in the form approved by the Finance Parties; and

     

    “Relevant
      Parties” means the Borrowers, the Lessee, the Shareholder, QGTC and
      (except in respect of clause 4.1.1) the Original Guarantor.

     

    
      	
              1.3  

            	
              Loan
                Agreement

            

    

     

    References
      in any of the Security Documents (other than the Loan Agreement) which remain
      in
      effect following the Effective Date to the Original Loan Agreement shall, with
      effect from the Effective Date and unless the context otherwise requires, be
      references to the Original Loan Agreement as amended by this Agreement and
      shall
      also be deemed to include this Agreement and the obligations of the Borrowers
      hereunder and words such as “therein”, “thereof”, “thereunder”, “thereafter”,
“thereby” and “thereto”, where they appear in such documents, shall be construed
      accordingly.

     

    
      	
              1.4  

            	
              New
                Guarantee

            

    

     

    References
      in any of the Security Documents which remain in effect following the Effective
      Date to the “Teekay Guarantee” shall, with effect from the Effective Date and
      unless the context otherwise requires, be references to the New Guarantee and
      words such as “herein”, “hereof”, “hereafter”, “hereunder”, “hereby”, and
“hereto”, where they appear in such Documents, shall be construed
      accordingly.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              1.5  

            	
              Headings

            

    

     

    Clause headings
      and the table of contents are inserted for convenience of reference only and
      shall be ignored in the interpretation of this Agreement.

     

    
      	
              1.6  

            	
              Construction
                of certain terms

            

    

     

    Clause 1.4
      of the Original Loan Agreement shall apply to this Agreement (mutatis mutandis)
      as if set out herein and as if references therein to “this Agreement” were
      references to this Agreement and references therein to “clauses” and “Schedules”
were references to clauses of, and Schedules to, this Agreement.

     

    
      	
              1.7  

            	
              Contracts
                (Rights of Third Parties Act)
                1999

            

    

     

    No
      term
      of this Agreement is enforceable under the Contracts (Rights of Third Parties)
      Act 1999 by a person who is not a party to this Agreement.

     

    
      	
              2  

            	
              Consent
                of the Finance
                Parties

            

    

     

    Each
      of
      the Finance Parties, relying upon the representations and warranties on the
      part
      of the Relevant Parties contained in clause 4, agrees
      with the Relevant Parties, subject to the terms and conditions of this Agreement
      and in particular, but without prejudice to the generality of the foregoing,
      fulfilment of the conditions contained in clause 5 and Schedule 2, (a) to the amendment of the Original
      Loan Agreement on the terms set out in clause 3 and Schedule 3, (b) to the
      replacement of the Original Guarantee with the New Guarantee and (c) to the
      release and discharge of all liabilities and obligations of the Original
      Guarantor under the Original Guarantee.

     

    
      	
              3  

            	
              Amendments
                to Original Loan
                Agreement

            

    

     

    
      	
              3.1  

            	
              Loan
                Agreement

            

    

     

    The
      Original Loan Agreement shall, with effect on and from the Effective Date,
      be
      (and it is hereby) amended in accordance with the provisions set out in Schedule
      3 (and the Loan Agreement (as so amended) will continue to be binding upon
      the
      Finance Parties and the Borrowers upon such terms as so amended).

     

    
      	
              3.2  

            	
              Continued
                force and effect

            

    

     

    Save
      as
      amended by this Agreement, the provisions of the Original Loan Agreement shall
      continue in full force and effect and the Original Loan Agreement and this
      Agreement shall be read and construed as one instrument.

     

    
      	
              3.3  

            	
              Effective
                Date

            

    

     

    If
      the
      Effective Date does not occur on or prior to 31 September 2006, then this
      Agreement and the rights and obligations of each of the parties hereunder shall
      cease to have any force or effect and the Original Loan Agreement shall continue
      in full force and effect in its original forms unamended and not restated
      pursuant to this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    It
      is
      further acknowledged by all parties hereunder that prior to the Effective Date,
      the provisions of the Original Loan Agreement shall continue in full force
      and
      effect unaffected by the provisions of this Agreement.

     

    
      	
              4  

            	
              Representations
                and
                warranties

            

    

     

    
      	
              4.1  

            	
              Primary
                representations and
                warranties

            

    

     

    Each
      of
      the Relevant Parties represents and warrants to each of the Finance Parties
      that:

     

    
      	
              4.1.1  

            	
              Existing
                representations and
                warranties

            

    

     

    the
      representations and warranties set out in clause 7 of the Original Loan
      Agreement and clause 4 of the QGTC Guarantee were true and correct on the date
      of the Original Loan Agreement and the QGTC Guarantee respectively and such
      representations and warranties are true and correct, including to the extent
      that they may have been or shall be amended by this Agreement, as if made at
      the
      date of this Agreement with reference to the facts and circumstances existing
      at
      such date;

     

    
      	
              4.1.2  

            	
              Corporate
                power

            

    

     

    each
      of
      the Relevant Parties has power to execute, deliver and perform its obligations
      under the Relevant Documents to which it is or is to be a party, and all
      necessary corporate, shareholder and other action has been taken by each of
      the
      Relevant Parties to authorise the execution, delivery and performance of the
      Relevant Documents to which it is or is to be a party;

     

    
      	
              4.1.3  

            	
              Binding
                obligations

            

    

     

    the
      Relevant Documents to which it is or is to be a party constitute or will, when
      executed, constitute valid and legally binding obligations of each of the
      Relevant Parties enforceable in accordance with their respective terms save
      as
      such enforcement may be restricted by laws affecting rights of creditors
      generally;

     

    
      	
              4.1.4  

            	
              No
                conflict with other
                obligations

            

    

     

    the
      execution, delivery and performance of the Relevant Documents to which it is
      or
      is to be a party by each of the Relevant Parties will not (a) contravene any
      existing law, statute, rule or regulation or any judgment, decree or permit
      to
      which any of the Relevant Parties is subject, (b) conflict with, or result
      in any breach of any of the terms of, or constitute a default under, any
      agreement or other instrument to which any of the Relevant Parties is a party
      or
      is subject or by which it or any of its property is bound or (c) contravene
      or conflict with any provision of the memorandum and articles of
      association or other constitutional documents of any of the Relevant Parties
      or
      (d) result in the creation or imposition of or oblige any of the Relevant
      Parties to create any Encumbrance (other than a Permitted Encumbrance) on any
      of
      the undertaking, assets, rights or revenues of any of the Relevant
      Parties;

     

    
      	
              4.1.5  

            	
              No
                filings required

            

    

     

    it
      is not
      necessary to ensure the legality, validity, enforceability or admissibility
      in
      evidence of any of the Relevant Documents that they or any other instrument
      be

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    notarised,
      filed, recorded, registered or enrolled in any court, public office or elsewhere
      in any Relevant Jurisdiction or that any stamp, registration or similar tax
      or
      charge be paid in any Relevant Jurisdiction on or in relation to the Relevant
      Documents and each of the Relevant Documents is in proper form for its
      enforcement in the courts of each Relevant Jurisdiction;

     

    
      	
              4.1.6  

            	
              Pari
                Passu

            

    

     

    the
      obligations of such Relevant Parties under the Relevant Documents to which
      it is
      a party are direct, general and unconditional obligations of such Relevant
      Party
      and rank at least pari passu with all other present and future unsecured and
      unsubordinated Indebtedness of such Relevant Party;

     

    
      	
              4.1.7  

            	
              Choice
                of law

            

    

     

    the
      choice of English law to govern the Relevant Documents and the submissions
      by
      the Relevant Parties to the non-exclusive jurisdiction of the English courts
      are
      valid and binding; and

     

    
      	
              4.1.8  

            	
              Consents
                obtained

            

    

     

    every
      consent, authorisation, licence or approval of, or registration or declaration
      to, governmental or public bodies or authorities or courts required by any
      of
      the Relevant Parties in connection with the execution, delivery, validity,
      enforceability or admissibility in evidence of the Relevant Documents to which
      it is or will become a party or the performance by any of the Relevant Parties
      of their respective obligations under such documents has been obtained or made
      and is in full force and effect and there has been no default in the observance
      of any conditions or restrictions (if any) imposed in, or in connection with,
      any of the same.

     

    
      	
              4.2  

            	
              Repetition
                of representations and
                warranties

            

    

     

    Each
      of
      the representations and warranties contained in clause 4.1 of this Agreement, clause 7 of the Loan
      Agreement and clause 4 of the QGTC Guarantee shall be deemed to be repeated
      by
      the Borrowers and QGTC respectively on the Effective Date as if made with
      reference to the facts and circumstances existing on such day.

     

    
      	
              4.3  

            	
              Legal
                qualifications

            

    

     

    As
      regards the representations and warranties set out in clauses 4.1.2 to 4.1.8
      to
      the extent that the subject matter of those representations and warranties
      is
      within the scope of any legal opinion provided to the Finance Parties, such
      representations and warranties shall be qualified by reference to any
      qualification, reservation or exception as to matters of law contained in such
      legal opinions but excluding any assumptions or references to matters of
      fact.

     

    
      	
              5  

            	
              Conditions

            

    

     

    
      	
              5.1  

            	
              Documents
                and
                evidence

            

    

     

    The
      consent of the Finance Parties referred to in clause 2
      shall be subject to the receipt by the Facility Agent or its duly authorised
      representative of the documents and 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    evidence
      specified in Schedule 2 in form and substance satisfactory to the Facility
      Agent.

     

    
      	
              5.2  

            	
              General
                conditions precedent

            

    

     

    The
      consent of the Finance Parties referred to in clause 2
      shall be further subject to:

     

    
      	
              5.2.1  

            	
              the
                representations and warranties in clause 4 being
                true and correct on the Effective Date as if each was made with respect
                to
                the facts and circumstances existing at such time;
                and

            

    

     

    
      	
              5.2.2  

            	
              no
                Default having occurred and be continuing at the time of the Effective
                Date.

            

    

     

    
      	
              5.3  

            	
              Waiver
                of conditions precedent

            

    

     

    The
      conditions specified in this clause 5 are inserted solely for the benefit
      of the Finance Parties and may be waived on their behalf by the Facility Agent
      acting on the instructions of the Majority Lenders in whole or in part with
      or
      without conditions.

     

    
      	
              6  

            	
              Relevant
                Parties’
                confirmations

            

    

     

    
      	
              6.1  

            	
              QGTC
                Guarantee

            

    

     

    QGTC
      hereby confirms its consent to the amendments to the Original Loan Agreement
      contained in this Agreement and agrees that:

     

    
      	
              6.1.1  

            	
              the
                QGTC Guarantee, and the obligations of QGTC thereunder, shall remain
                and
                continue in full force and effect notwithstanding the said amendments
                to
                the Original Loan Agreement contained in this Agreement;
                and

            

    

     

    
      	
              6.1.2  

            	
              with
                effect from the Effective Date references in the QGTC Guarantee to
                the
                “Agreement” shall henceforth be reference to the Original Loan Agreement
                as amended by this Agreement and as from time to time hereafter amended
                and shall also be deemed to include this Agreement and the obligations
                of
                the Borrowers hereunder.

            

    

     

    
      	
              6.2  

            	
              Security
                Documents

            

    

     

    Each
      of
      the Relevant Parties hereby confirms its consent to the amendments to the
      Original Loan Agreement contained in this Agreement and agrees
      that:

     

    
      	
              6.2.1  

            	
              the
                Security Documents to which it is a party and its obligations thereunder
                (to the extent not already released or which otherwise remain in
                existence
                following the Effective Date), shall remain and continue in full
                force and
                effect notwithstanding the said amendments to the Original Loan Agreement
                contained in this Agreement;

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              6.2.2  

            	
              with
                effect from the Effective Date references in any of the Security
                Documents
                to the Original Loan Agreement shall henceforth be reference to the
                Original Loan Agreement as amended by this Agreement and as from
                time to
                time hereafter amended and shall also be deemed to include this Agreement
                and the obligations of the Borrowers hereunder;
                and

            

    

     

    
      	
              6.2.3  

            	
              with
                effect from the Effective Date, the Original Guarantor shall cease
                to be a
                “Security Party” for the purposes of the Loan
                Agreement.

            

    

     

    
      	
              6.3  

            	
              Commercial
                Tranche Margin

            

    

     

    Each
      of the Relevant Parties hereby (a) confirms its consent to the amendment to
      the
      Commercial Tranche Margin in accordance with the provisions set out in clause
      3.1 and Schedule 3 paragraph 1 and (b) confirms that such amendments shall
      be
      deemed to take effect from 25 July 2006 in accordance with the provisions of
      a
      side letter dated 25 July 2006 made between the Borrowers and the Commercial
      Lenders.

     

    
      	
              7  

            	
              Expenses

            

    

     

    
      	
              7.1  

            	
              Expenses

            

    

     

    The
      Borrowers agree to pay to the Facility Agent on a full indemnity basis on demand
      all expenses (including legal, consular and registration expenses) incurred
      by
      the Facility Agent and any of the other Finance Parties:

     

    
      	
              7.1.1  

            	
              in
                connection with the negotiation, preparation, execution
                and, where relevant, registration of this Agreement and of any amendment
                or extension of or the granting of any waiver or consent under any
                of the
                Relevant Documents;

            

    

     

    
      	
              7.1.2  

            	
              in
                contemplation of, or otherwise in connection with, the enforcement
                of, or
                preservation of any rights under any of the Relevant Documents or
                otherwise in respect of the moneys owing and obligations incurred
                under
                any of the Relevant Documents,

            

    

     

    together
      with interest at the rate referred to in clause 3.3 of the Loan Agreement from
      the date on which such expenses were incurred to the date of payment (as well
      after as before judgment).

     

    
      	
              7.2  

            	
              Value
                Added Tax

            

    

     

    All
      expenses payable pursuant to this clause 7 shall be paid together with
      value added tax or any similar tax (if any) properly chargeable
      thereon.  Any value added tax chargeable in respect of any services
      supplied by the Facility Agent under this Agreement shall, on delivery of the
      value added tax invoice, be paid in addition to any sum agreed to be paid
      hereunder.

     

    
      	
              7.3  

            	
              Stamp
                and other duties

            

    

     

    The
      Borrowers agree to pay to the Facility Agent on demand all stamp, documentary,
      registration or other like duties or taxes (including any duties or taxes
      payable by the Facility Agent 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    and
      any
      of the other Finance Parties) imposed on or in connection with this Agreement,
      the other Relevant Documents and shall indemnify the Facility Agent and the
      any
      of the other Finance Parties against any liability arising by reason of any
      delay or omission by the Borrowers to pay such duties or taxes.

     

    
      	
              8  

            	
              Miscellaneous
                and
                notices

            

    

     

    
      	
              8.1  

            	
              Notices

            

    

     

    The
      provisions of clause 17.1 of the Loan Agreement and clause 7.1 of the QGTC
      Guarantee shall extend and apply to the giving or making of notices or demands
      hereunder as if the same were expressly stated herein.

     

    
      	
              8.2  

            	
              Counterparts

            

    

     

    This
      Agreement may be executed in any number of counterparts and by the different
      parties on separate counterparts and, provided each of the parties shall so
      execute this Agreement, each of the executed counterparts, when duly exchanged
      or delivered, shall be deemed to be an original but, taken together, they shall
      constitute one instrument.

     

    
      	
              8.3  

            	
              Partial
                invalidity

            

    

     

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

     

    
      	
              9  

            	
              Applicable
                law

            

    

     

    
      	
              9.1  

            	
              Law

            

    

     

    This
      Agreement is governed by and shall be construed in accordance with English
      law.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              9.2  

            	
              Submission
                to jurisdiction

            

    

     

    Each
      of
      the Relevant Parties agrees, for the benefit of the Facility Agent and the
      other
      Finance Parties or any of them, that any legal action or proceedings arising
      out
      of or in connection with this Agreement against any of the Relevant Parties
      or
      any of their assets may be brought in the English courts.  Each of the
      Relevant Parties irrevocably and unconditionally submits to the jurisdiction
      of
      such courts and each Relevant Party (apart from the Lessee) irrevocably
      designates, appoints and empowers Teekay Shipping (UK) Limited at present of
      2nd
      Floor, 86 Jermyn Street, London SW1Y 6JD to receive for it and on its behalf,
      service of process issued out of the English courts in any such legal action
      or
      proceedings.  The submission to such jurisdiction shall not (and shall
      not be construed so as to restrict the right of the Facility Agent and the
      other
      Finance Parties or any of them to take proceedings against any of the Relevant
      Parties in the courts of any other competent jurisdiction nor shall the taking
      of proceedings in any one or more jurisdictions preclude the taking of
      proceedings in any other jurisdiction, whether concurrently or
      not.  The parties further agree that only the Courts of England and
      not those of any other state shall have jurisdiction to determine any claim
      which any of the Relevant Parties may have against the Facility Agent and the
      other Finance Parties or any of them arising out of or in connection with this
      Agreement.

     

    IN
      WITNESS whereof the parties to this Agreement have caused this
      Agreement to be duly executed on the date first above written.

     

     

     

     

     

     

     

     

     

     

    

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule 1

       

      The
        Lenders

       

      
        	
                Name

              	
                Address
                  and fax number

              
	
                The
                  Export-Import 

                Bank
                  of Korea

              	
                Lending
                  Office

                The
                  Export – Import Bank Of Korea

                16-1,
                  Yoido-dong, Youngdeungpo-gu

                Seoul,
                  150-996

                Korea

                 

                Address
                  for Notices

                The
                  Export – Import Bank Of Korea

                Ship
                  Financing Department

                16-1,
                  Yoido-dong, Youngdeungpo-gu

                Seoul,
                  150-996

                Korea

                 

                Fax:                +
                  822 3779 6745

                Attn:              Ship
                  Financing Department

              
	
                Calyon

              	
                Lending
                  Office

                Calyon

                 

                9
                  Quai du Président Paul Doumer,

                92920
                  Paris

                La
                  Defense Cedex

                France

                 

                Address
                  for Notices

                Address:

                Calyon

                9
                  Quai du Président Paul Doumer,

                92920
                  Paris

                La
                  Défense Cedex

                France

                 

                Fax:       
                  +33 (0) 1 41 89 29 87

                Attn:      
                  Shipping Department

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	 
	 	
                Copy
                  to:

                Calyon,
                  London Shipping Department

                122
                  Leadenhall Street

                London EC3V
                  4QH

                Fax:                      +44
                  20 7214 6689

                Attn:                                Head
                  of Shipping

              
	
                DnB
                  NOR Bank ASA

              	
                Lending
                  Office

                DNB
                  Nor Bank ASA

                0021
                  Oslo

                Norway

                 

                Address
                  for Notices (Credit Issues)

                DNB
                  Nor Bank ASA

                5020
                  Bergen

                Norway

                 

                Fax:     
                  +47 55 21 19 24

                Attn:   
                  Erik Gundersen Papp

                 

                Address
                  for Notices (Operational Issues)

                DNB
                  Nor Bank ASA

                0021
                  Oslo

                Norway

                 

                Fax:          
                  +47 22 48 28 94

                Attn:        
                  Credit Administration

              
	
                The
                  Royal Bank of 

                Scotland
                  plc

              	
                Lending
                  Office

                Address:

                The
                  Royal Bank of Scotland plc

                Shipping
                  Business Centre

                5-10
                  Great Tower Street

                London
                  EC3P 3HX

                United
                  Kingdom

                 

              

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	 	 
	 	 
                
                Address
                  for Notices

                Address:

                The
                  Royal Bank of Scotland plc

                Shipping
                  Business Centre

                5-10
                  Great Tower Street

                London
                  EC3P 3HX

                United
                  Kingdom

                 

                Fax:       +44
                  207 615 0112

                Attn:    
                  Colin Manchester

              
	
                ING
                  Bank N.V.

              	
                Lending
                  Office

                Address:

                ING
                  Bank N.V.

                60
                  London Wall

                London
                  EC2M 5TQ

                United
                  Kingdom

                 

                Address
                  for Notices

                Address:

                ING
                  Bank N.V.

                60
                  London Wall

                London
                  EC2M 5TQ

                United
                  Kingdom

                 

                Fax:    
                  +44 207 767 7252

                Attn:  
                  Hugh Baker

                 

              
	
                Nordea
                  Bank Norge 

                ASA
                  Grand Cayman 

                Branch

              	
                Lending
                  Office

                Nordea
                  Bank Norge ASA Grand Cayman Branch

                437
                  Madison Ave

                New
                  York, NY 10022

                 

                Address
                  for Notices (Credit Issues)

                 

                Nordea
                  Bank Norge ASA Grand Cayman Branch

                437
                  Madison Ave

                New
                  York, NY 10022

                Fax:     
                  + 1 212 421 4420

                Attn:   
                  Hans Christian Kjelsrud

                 

                Address
                  for Notices (Operational Issues)

                 

                Nordea
                  Bank Norge ASA Grand Cayman Branch

                437
                  Madison Ave

                New
                  York, NY 10022

                Fax:      
                  + 1 212 750 9188

                Attn:    
                  Jacqueline Ng

              

      

      

      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      Schedule 2 

      Documents
        and evidence required as conditions precedent

       

      (referred
        to in clause 5.1)

       

      
        	
                1.  

              	
                Relevant
                  Parties’ and New Guarantor’s constitutional
                  documents

              

      

       

      copies,
        certified by the secretary, a director, an officer, a sole member or a general
        partner, as the case may be, of each of the Relevant Parties and the New
        Guarantor as true, complete and up to date copies of all documents which
        contain
        or establish or relate to the constitution or formation each of the Relevant
        Parties and the New Guarantor or, in respect of the Relevant Parties only,
        confirmation from such parties that their respective constitutional documents
        have not changed since 15 December 2005;

       

      
        	
                2.  

              	
                Relevant
                  Parties’ and New
                  Guarantor’s corporate
                  authorisations

              

      

       

      copies
        of
        resolutions of the directors, sole member or partners, as the case may be
        and,
        in respect of the Borrowers only, the shareholders of each of the Relevant
        Parties and the New Guarantor approving each of the Relevant Documents to
        which
        such Relevant Parties or, as the case may be, the New Guarantor are party
        and
        authorising the signature, delivery and performance of such Relevant Parties’
and the New Guarantor’s obligations thereunder, certified (in a certificate
        dated no earlier than five (5) Banking Days prior to the date of this Agreement)
        by the secretary, a director, a sole member or a general partner, as the
        case
        may be, of such Relevant Party and the New Guarantor as:

       

      (a)              being
        true and correct;

       

       (b)    being
        duly passed at meeting of the directors, sole member or partners, as the
        case
        may be of such Relevant Party or, as the case may be, the New Guarantor duly
        convened and held;

       

      (c)              not
        having been amended, modified or revoked; and

       

      (d)              being
        in full force and effect

       

      together
        with originals or certified copies of any powers of attorney issued by such
        Relevant Parties and the New Guarantor pursuant to such
        resolutions;

       

      
        	
                3.  

              	
                Relevant
                  Parties’ and New
                  Guarantor’s incumbency
                  certificate

              

      

       

      an
        original certificate signed by a duly authorised signatory of each of the
        Relevant Parties and the New Guarantor no earlier than five (5) Banking Days
        prior to the date of this Agreement certifying the names of the officers
        and
        directors of the relevant Relevant Party or, as the case may be, the New
        Guarantor;

       

      
        	
                4.  

              	
                Relevant
                  Parties’ and the New
                  Guarantor’s process agent

              

      

       

      with
        the
        exception of the Lessee, a copy, certified as a true copy by a duly authorised
        signatory of each of the Relevant Parties and the New Guarantor or other
        person
        acceptable to the Facility Agent of a letter from each of the Relevant Parties’
and the 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      New
        Guarantor’s agent for receipt of service of proceedings referred to in
        clause 18.3 of the Loan Agreement accepting its appointment under the Loan
        Agreement and each of the other Relevant Documents (including this Agreement)
        in
        which it is or is to be appointed as the Relevant Parties’ and the New
        Guarantor’s agent and confirming that its appointment has become
        effective;

       

      
        	
                5.  

              	
                Original
                  Guarantee

              

      

       

      
        	
                 

              	
                the
                  Original Guarantee duly discharged and returned to the Original
                  Guarantor;

              

      

       

      
        	
                6.  

              	
                New
                  Guarantee

              

      

       

      
        	
                 

              	
                original
                  executed copy of the New
                  Guarantee; and

              

      

       

      
        	
                7.  

              	
                Legal
                  opinion

              

      

       

      a
        legal
        opinion of Cozen O’Connor, legal counsel to the Finance Parties on matters of
        Marshall Islands law in respect of the New Guarantor.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule 3

       

      Amendments
        to Original Loan Agreement

       

      
        	
                1  

              	
                The
                  definition of “Commercial Tranche Margin” in clause 1.2 of the Original
                  Loan Agreement shall be amended to reads as
                  follows:

              

      

       

      “”Commercial
        Tranche Margin” means zero point six seven five per cent. (0.675%) per
        annum;”.

       

      
        	
                2  

              	
                The
                  definition of “Intra-Group Transactions” in clause 1.2 of the Original
                  Loan Agreement shall be deleted and replaced with the following
                  new
                  definition:

              

      

       

      ““Intra-Group
        Transactions” means (i) transactions and dealings between two or more
        Security Parties who are members of the Teekay Guarantor Group and (ii) prior
        to
        the Shareholding Transfer Date, loans to each Borrower made by Teekay Shipping
        Corporation, whether directly or through a Subsidiary or
        Subsidiaries;”.

       

      
        	
                3  

              	
                In
                  clause 1.2 of the Original Loan Agreement, the following new definition
                  shall be added:

              

      

       

      ““Shareholding
        Transfer Date” means the date on which the direct or indirect
        shareholding interest of Teekay Shipping Corporation in each Borrower is
        transferred to the Teekay Guarantor;”.

       

      
        	
                4  

              	
                The
                  definition of “Subsidiary” in clause 1.2 of the Original Loan Agreement
                  shall be amended to read as
                  follows:

              

      

       

      “”Subsidiary”
        of a person means any company or entity directly or indirectly controlled
        by
        such person, and for this purpose “control” means either the
        ownership of more than fifty per cent. (50%) of the voting share capital
        (or
        equivalent rights of ownership) of such company or entity or the power to
        direct
        its policies and management, whether by contract or otherwise;”.

       

      
        	
                5  

              	
                The
                  definition of “Teekay Guarantor” in clause 1.2 of the Original Loan
                  Agreement shall be deleted and replaced with the following new
                  definition:

              

      

       

      “”Teekay
        Guarantor” means Teekay LNG Partners L.P. of Trust Company Complex,
        Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH
        96960;”.

       

      
        	
                6  

              	
                Clause
                  10.1.22 of the Original Loan Agreement shall be deleted and replaced
                  with
                  the following new definition:

              

      

       

      “”Change
        of Control: means there is a change in control of any Security Party
        other than QGTC (whether or not by reference to a change in the majority
        ownership of shares in such Security Party or by reference to a change in
        the
        composition of the board of directors or equivalent management body of such
        Security Party) without the prior written consent of the Facility Agent (acting
        on the instructions of the Majority Lenders), provided that

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	
                (a)  

              	
                so
                  long as the Teekay Guarantor or, prior to the Shareholding Transfer
                  Date,
                  Teekay Shipping Corporation continues to
                  have:

              

      

       

      
        	
                (i)  

              	
                legally
                  or beneficially and either directly or indirectly more than fifty
                  per
                  cent. (50%) of the entire issued share capital of a Security Party
                  other
                  than QGTC; or

              

      

       

      
        	
                (ii)  

              	
                the
                  right or ability to control, either directly or indirectly, the
                  affairs,
                  or the composition of the board of directors (or equivalent of
                  it), of
                  such Security Party other than
                  QGTC,

              

      

       

      there
        shall not be any change in control in such Security Party; and

       

      
        	
                (b)  

              	
                on
                  and from the Shareholding Transfer Date, so long as Teekay Shipping
                  Corporation or a Subsidiary of Teekay Shipping Corporation remains
                  the
                  general partner of the Teekay Guarantor, a change in control in
                  relation
                  to the Teekay Guarantor shall not occur by reason of any changes
                  from time
                  to time in the ownership of partner interests in the Teekay Guarantor;
                  or;
                  “.

              

      

       

      
        	
                7  

              	
                Clause
                  17.9 of the Original Loan Agreement shall be deleted in its entirety
                  and
                  replaced with the following new
                  clause:

              

      

       

      “17.9The
        Teekay Guarantor

       

      The
        parties to this Agreement acknowledge that the Teekay Guarantor is to acquire
        the whole shareholding interest of Teekay Shipping Corporation in the Borrowers
        on or about the Delivery Date.”.

       

      
        	
                8  

              	
                Clause
                  18.3 of the Original Loan Agreement shall be amended by deleting
                  reference
                  to “49 St. James’s Street, London SW1A 1JT” and replacing it with
                  reference to “2nd Floor, 86 Jermyn Street, London SW1Y
                  6JD”.

              

      

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule 4

       

      Form
        of Effective Date Notice

       

      We
        refer
        to the second supplemental agreement dated [·] 2006
        (the
“SecondSupplemental Agreement”) between (1) AL
        MARROUNA INC. (formerly DSME Hull No. 2238 Inc.), AL AREESH INC. (formerly
        DSME
        Hull No. 2239 Inc.) and AL DAAYEN INC. (formerly DSME Hull No. 2240 Inc.)
        as
        joint and several borrowers (the “Borrowers”),
        (2) Calyon as arranger (the “Arranger”),
        (3) Calyon as facility agent (the “Facility Agent”), (4) Calyon
        as security trustee (the “Security Trustee”), (5) The
        Export-Import Bank of Korea (“KEXIM”), (6) certain banks and
        financial institutions whose names and addresses are set out in Schedule
        1 of
        the Second Supplemental Agreement (the “Commercial Lenders”),
        (7) Teekay Nakilat (II) Limited as lessee, (8) Teekay Nakilat Corporation
        as shareholder, (9) Qatar Gas Transport Company Limited (Nakilat) as guarantor
        and (10) Teekay Shipping Corporation as original guarantor in respect of
        a loan
        agreement dated 15 December 2004 (as amended and restated from time to time)
        made between (1) the Borrowers, (2) the Arranger, (3) the Facility Agent,
        (4)
        the Security Trustee, (5) KEXIM and (6) the Commercial Lenders in respect
        of a
        loan of up to an aggregate amount of four hundred and sixty eight million,
        one
        hundred and eight thousand and twenty three Dollars ($468,108,023) made
        available by the KEXIM and the Commercial Lenders to the Borrowers jointly
        and
        severally for the purposes of financing part of the cost of the purchase
        of
        three LNG tankers.

      

      We
        hereby
        give you notice that we have received the documents and evidence specified
        in
        clause 5 of, and Schedule 2 to, the Second Supplemental Agreement in a form
        and substance satisfactory to us and confirm that for the purposes of the
        Second
        Supplemental Agreement the Effective Date is [·] 2006.

      

      This
        notice shall be governed by and construed in accordance with the laws of
        England.

      

      

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

      for
        and
        on behalf of

      CALYON

      as
        Facility Agent

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Schedule 5 

      Form
        of New Guarantee

      

      

      

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Execution
        Page

      

      Borrowers

      

      SIGNED
        by                                                                                   
 )

      for
        and
        on behalf
        of                                                                     
 )

      AL
        MARROUNA
        INC.                                                                
)

      pursuant
        to a Power of
        Attorney                                               
)     ..................................

                           
        )     Attorney in-fact

      

      

      

      SIGNED
        by                                                                                    
)

      for
        and
        on behalf
        of                                                                       )

      AL
        AREESH
        INC.                                                                          )

      pursuant
        to a Power of
        Attorney                                               
)     ..................................

                            )     Attorney
        in-fact

      

      

      

      SIGNED
        by                                                                                    
)

      for
        and
        on behalf
        of                                                                      
)

      AL
        DAAYEN
        INC.                                                                         )

      pursuant
        to a Power of
        Attorney                                                )     ..................................

                            )     Attorney
        in-fact

      

      

      

      

      Facility
        Agent

      

      SIGNED
        by                                                                                   
 )

      for
        and
        on behalf
        of                                                                       )

      CALYON                                                                                       
        )     ..................................

      as
        Facility Agent pursuant to
        a                                                   )     Attorney-in-fact

      Power
        of
        Attorney                                                                         )

      

      

      

      

      Security
        Trustee

      

      SIGNED
        by                                                                                     
)

      for
        and
        on behalf
        of                                                                        )

      CALYON                                                                                         )     ..................................

      as
        Security Trustee pursuant to
        a                                                )     Attorney-in-fact

      Power
        of
        Attorney                                                                          )

      

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      Arranger

      

      SIGNED
        by                                                                                     
)

      for
        and
        on behalf
        of                                                                        )

      CALYON                                                                                        
        )     ..................................

      as
        Arranger pursuant to
        a                                                             )     Attorney-in-fact

      Power
        of
        Attorney                                                                         
)

      

      
 

      KEXIM

      

      SIGNED
        by                                                                                      
)

      for
        and
        on behalf
        of                                                                         )     ..................................

      THE
        EXPORT-IMPORT BANK OF
        KOREA                            
)    Attorney-in-fact

      pursuant
        to a Power of
        Attorney                                                   )

       

      

      The
        Commercial Lenders

      

      SIGNED
        by                                                                                     
 )

      for
        and
        on behalf
        of                                                                         )

      CALYON                                                                                         
        )     ..................................

      as
        a
        Commercial Lender pursuant to
        a                                          )     Attorney-in-fact

      Power
        of
        Attorney                                                                           )

      

      

      

      SIGNED
        by                                                                                      
)

      for
        and
        on behalf
        of                                                                        
)

      DnB
        NOR BANK
        ASA                                                                   )     ..................................

      as
        a
        Commercial Lender pursuant to
        a                                          )     Attorney-in-fact

      Power
        of
        Attorney                                                                           )

      

      

      

      SIGNED
        by                                                                                      
)

      for
        and
        on behalf
        of                                                                         )

      THE
        ROYAL BANK OF SCOTLAND
        PLC                               )           ..................................

      as
        a
        Commercial Lender pursuant to
        a                                          )     Attorney-in-fact

      Power
        of
        Attorney                                                                          
)

      

      

      

      SIGNED
        by                                                                                      
)

      for
        and
        on behalf
        of                                                                         )

      ING
        BANK
        N.V.                                                                              
)     ..................................

      as
        a
        Commercial Lender pursuant to
        a                                          )     Attorney-in-fact

      Power
        of
        Attorney                                                                           )

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SIGNED
        by                                                                                       
)

      for
        and
        on behalf
        of                                                                          )

      NORDEA
        BANK NORGE
        ASA                                                     )

      GRAND
        CAYMAN
        BRANCH                                                        )     ..................................

      as
        a
        Commercial Lender pursuant to
        a                                           )     Attorney-in-fact

      Power
        of
        Attorney                                                                            )

      

      

      

      Lessee

      

      SIGNED
        by                                                                                         )

      for
        and
        on behalf
        of                                                                           )     ..................................

      TEEKAY
        NAKILAT (II)
        LIMITED                                                  )     Attorney-in-fact

      as
        Lessee
        pursuant to

      a
        Power
        of Attorney

      

      Shareholder

      

      SIGNED
        by                                                                                        
)

      for
        and
        on behalf
        of                                                                           )     ..................................

      TEEKAY
        NAKILAT
        CORPORATION                                          )    Attorney-in-fact

      as
        Shareholder pursuant to

      a
        Power
        of Attorney

      
 

      

      QGTC

      

      SIGNED
        by                                                                                         
)

      for
        and
        on behalf
        of                                                                            )     ..................................

      QATAR
        GAS TRANSPORT COMPANY
        LIMITED                  )    Attorney-in-fact

      (NAKILAT)

      as
        guarantor pursuant to

      a
        Power
        of Attorney

      

      

      

      Original
        Guarantor

      

      SIGNED
        by                                                                                        
)

      for
        and
        on behalf
        of                                                                           )     ..................................

      TEEKAY
        SHIPPING
        CORPORATION                                        )    Attorney-in-fact

      as
        Original Guarantor pursuant to

      a
        Power
        of Attorney

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