Document:

Teekay exhibit "4.14 Agreement dated Aug 23, 2006, for a U.S. $330,000,000
      Secured Reducing Revolving Loan Facility Agreement between TK LNG Partners
      L.P., ING Bank N.V. and other banks

    LOAN
      FACILITY AGREEMENT

     

    Dated:
                                                      2006

     

    BETWEEN:-
      

     

    
      	
              (1)

            	
              TEEKAY
                LNG PARTNERS L.P. a
                limited partnership formed and existing under the laws of the Republic
                of
                the Marshall Islands with its registered office at c/o Trust Company
                Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands
                MH96960
                (the "Borrower");
                and 

            

    

     

    
      	
              (2)

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

            

    

     

    
      	
              (3)

            	
              ING
                BANK N.V. acting
                as arranger (in that capacity the "Arranger");
                and

            

    

     

    
      	
              (4)

            	
              ING
                BANK N.V. acting
                as administrative agent and security trustee through its office at
                60
                London Wall, London EC2M 5TQ (in that capacity the "Agent").

            

    

     

    WHEREAS:-

     

    Each
      of
      the Banks has agreed to
      advance
      to the Borrower its respective Commitment of an aggregate principal amount
      not
      exceeding three hundred and thirty million Dollars ($330,000,000) to refinance
      the Existing Indebtedness and thereafter for the general corporate purposes
      of
      the Borrower Group on the terms and conditions herein set forth. 

     

    IT IS AGREED
      as
      follows:-

     

    
      	1  	
              Definitions
                and Interpretation

            

    

     

    1.1 Definitions

     

    In
      this
      Agreement:-

     

    
      	 	
              1.1.1

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

            

    

     

    
      	 	
              1.1.2

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

            

    

     

     

     

     

     

     

     

    
      
        
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        1

        
          

          
            

          

        

      

      
        
        

      

    

     

    
      	 	
              1.1.3

            	
              "Assignments"
                means the first priority assignments of each of the Vessels' Earnings,
                Insurance, Requisition Compensation and Charter Rights referred to
                in
                clause 8.1.4.

            

    

     

    
      	 	
              1.1.4

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

            

    

     

    
      	 	
              1.1.5

            	
              "Borrower's Accounts"
                means the consolidated financial accounts of the Borrower to be provided
                to the Agent pursuant to Clause 10.2.18 of this
                Agreement.

            

    

     

    
      	 	
              1.1.6

            	
              "Borrower Group"
                means, from time to time, the Borrower, the Guarantors and each of
                their
                respective Subsidiaries.

            

    

     

    
      	 	
              1.1.7

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

            

    

     

    
      	 	
              1.1.8

            	
              "the
                Borrower's Security Documents"
                means those of the Security Documents to which the Borrower is or
                is to be
                a party.

            

    

     

    
      	 	
              1.1.9

            	
              "Break
                Costs"
                means all documented costs, losses, premiums or penalties incurred
                by any
                of the Finance Parties in the circumstances contemplated by Clause
                17.4 or
                as a result of any of them receiving any prepayment of all or any
                part of
                the Facility (whether pursuant to Clauses 5.2 and 5.3 or otherwise)
                or any
                other payment under or in relation to the Security Documents on a
                day
                other than the due date for payment of the sum in question, and includes
                (without limitation) any losses or costs incurred in liquidating
                or
                re-employing deposits from third parties acquired to effect or maintain
                the Facility, and any liabilities, expenses or losses incurred by
                any of
                the Finance Parties in terminating or reversing, or otherwise in
                connection with, any interest rate and/or currency swap, transaction
                or
                arrangement entered into by any of the Finance Parties with any member
                of
                the Borrower Group to hedge any exposure arising under this Agreement,
                or
                in terminating or reversing, or otherwise in connection with, any
                open
                position arising under this
                Agreement.

            

    

     

     

     

     

     

     

     

     

    
      
        
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              1.1.10

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

            

    

     

    
      	 	
              1.1.11

            	
              "Change
                of Control"
                means that 

            

    

     

    
      	 	 	
              (i)

            	
              Teekay
                Shipping Corporation ceases to own (directly or indirectly) a majority
                of
                the limited liability company interests in the General Partner;
                or

            

    

     

    
      	 	 	
              (ii)

            	
              the
                Corporate Guarantor ceases to own (directly or indirectly) a majority
                of
                the shares in the Owners; or

            

    

     

    
      	 	 	
              (iii)

            	
              the
                Borrower ceases to own (directly or indirectly) a majority of the
                shares
                in the Corporate Guarantor.

            

    

     

    
      	 	
              1.1.12

            	
              "Charters"
                means the charterparty for Vessel A dated 22 February 2001 and made
                between the relevant Owner and Charterer A and the charterparty for
                Vessel
                B dated 28 June 2001 made between the relevant Owner and Union Fenosa,
                S.A. (formerly Union Electrica Fenosa, S.A.) as assigned by Union
                Fenosa,
                S.A. to Charterer B (each a "Charter")
                as each has been and may be supplemented and amended from time to
                time.

            

    

     

    
      	 	
              1.1.13

            	
              "Charterers"
                means Charterer A and Charterer B (each a "Charterer").

            

    

     

    
      	 	
              1.1.14

            	
              "Charterer
                A"
                means Repsol YPF Trading Y Transporte
                S.A.

            

    

     

    
      	 	
              1.1.15

            	
              "Charterer
                B"
                means Union Fenosa Gas, S.A.

            

    

     

     

     

     

     

     

    
      
        
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              1.1.16

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

            

    

     

    
      	 	
              1.1.17

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

            

    

     

    
      	 	
              1.1.18

            	
              "Commitment
                Commission"
                means the commitment commission to be paid by the Borrower to the
                Agent on
                behalf of the Banks pursuant to Clause
                7.

            

    

     

    
      	 	
              1.1.19

            	
              "Commitment
                Termination Date"
                means the date falling one month prior to the Termination
                Date.

            

    

     

    
      	 	
              1.1.20

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

            

    

     

    
      	 	
              1.1.21

            	
              "the
                Communications Address"
                means c/o Teekay Shipping (Canada) Ltd, Suite
                2000, Bentall 5, 550 Burrard Street, Vancouver, B.C., Canada V6C
                2K2,
                fax no: +1 604 681 3011 marked for the attention of Vice President,
                Finance.

            

    

     

    
      	 	
              1.1.22

            	
              "Company"
                means at any given time the company responsible for a Vessel's compliance
                with (i) the ISM Code under paragraph 1.1.2 of the ISM Code and or
                (ii)
                the ISPS Code (as the case may be).

            

    

     

    
      	 	
              1.1.23

            	
              "Confirmation"
                means a confirmation exchange or deemed exchanged between a Future
                Swap
                Provider and the Borrower as contemplated by a Master
                Agreement.

            

    

     

    
      	 	
              1.1.24

            	
              "Corporate
                Guarantor"
                means Teekay Shipping Spain, S.L.

            

    

     

     

     

     

     

     

     

    
      
        
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              1.1.25

            	
              "Corporate
                Guarantee"
                means the guarantee and indemnity of the Corporate Guarantor in respect
                of
                the Borrower's Obligations referred to in clause
                8.1.2.

            

    

     

    
      	 	
              1.1.26

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

            

    

     

    
      	 	
              1.1.27

            	
              "Default
                Rate"
                means the rate which is the aggregate of LIBOR, any Mandatory Cost,
                the
                Margin and one point five per centum (1.5%) per
                annum.

            

    

     

    
      	 	
              1.1.28

            	
              "Distribution
                Drawing"
                means a Drawing used or intended to be used by the Borrower to fund
                cash
                distributions to its general partner and limited
                partners.

            

    

     

    
      	 	
              1.1.29

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

            

    

     

    
      	 	
              1.1.30

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

            

    

     

    
      	 	
              1.1.31

            	
              "Drawdown
                Notice"
                means a notice complying with Clause 2.3 in the form set out in Schedule
                5.

            

    

     

    
      	 	
              1.1.32

            	
              "Drawing"
                means a part (or, if requested and available, all) of the Facility
                advanced by the Banks to the Borrower in accordance with Clause 2,
                and
                which shall be designated either a General Revolving Drawing or a
                Distribution Drawing.

            

    

     

    
      	 	
              1.1.33

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

            

    

     

     

     

     

     

     

    
      
        
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              1.1.34

            	
              "Earnings
                Account"
                means a bank account to be opened (in the event that an Event of
                Default
                has occurred) in the joint names of the Owners with the Earnings
                Account
                Holder .

            

    

     

    
      	 	
              1.1.35

            	
              "Earnings
                Account Holder"
                means the bank or financial institution which (following the occurrence
                of
                an Event of Default) at any time, with the Agent's prior written
                consent,
                holds the Earnings Account.

            

    

     

    
      	 	
              1.1.36

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

            

    

     

    
      	 	
              1.1.37

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

            

    

     

    
      	 	
              1.1.38

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

            

    

     

    
      	 	
              1.1.39

            	
              "Environmental
                Claim"
                means any and all enforcement, clean-up, removal, administrative,
                governmental, regulatory or judicial actions, orders, demands or
                investigations instituted or completed pursuant to any Environmental
                Laws
                or Environmental Approvals together with any claims made by any third
                person relating to damage, contribution, loss or injury resulting
                from any
                Environmental Incident.

            

    

     

    
      	 	
              1.1.40

            	
              "Environmental
                Incident"
                means:

            

    

     

     

     

     

     

     

     

     

    
      
        
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              (a)

            	
              any
                release of Environmentally Sensitive Material from a Vessel;
                or

            

    

     

    
      	 	
              (b)

            	
              any
                incident in which Environmentally Sensitive Material is released
                from a
                vessel other than a Vessel and which involves a collision between
                a Vessel
                and such other vessel or some other incident of navigation or operation,
                in either case, in connection with which the relevant Vessel is actually
                or potentially liable to be arrested, attached, detained or injuncted
                and/or where any guarantor, any manager (or any sub-manager of such
                Vessel) or any of its officers, employees or other persons retained
                or
                instructed by it (or such sub-manager) are at fault or allegedly
                at fault
                or otherwise liable to any legal or administrative action;
                or

            

    

     

    
      	 	
              (c)

            	
              any
                other incident in which Environmentally Sensitive Material is released
                otherwise than from such Vessel and in connection with which that
                Vessel
                is actually or potentially liable to be arrested and/or where any
                guarantor, any manager (or any sub-manager of the relevant Vessel)
                or any
                of its officers, employees or other persons retained or instructed
                by it
                (or such sub-manager) are at fault or allegedly at fault or otherwise
                liable to any legal or administrative
                action.

            

    

     

    
      	 	
              1.1.41

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

            

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (d)

            	
              relate
                to Environmentally Sensitive Materials or health or safety
                matters.

            

    

     

     

     

     

     

     

     

     

     

    
      
        
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              1.1.42

            	
              "Environmentally
                Sensitive Material"
                means (i) oil and oil products and (ii) any other waste, pollutant,
                contaminant or other substance (including any liquid, solid, gas,
                ion,
                living organism or noise) that may be harmful to human health or
                other
                life or the environment or a nuisance to any person or that may make
                the
                enjoyment, ownership or other territorial control of any affected
                land,
                property or waters more costly for such person to a material
                degree.

            

    

     

    
      	 	
              1.1.43

            	
              "Event
                of Default"
                means any of the events set out in
                Clause 12.2.

            

    

     

    
      	 	
              1.1.44

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

            

    

     

    
      	 	
              1.1.45

            	
              "Existing
                Indebtedness"
                means the Financial Indebtedness owed by Naviera Teekay Gas S.L.
                under the
                terms of a syndicated credit agreement dated 22 February 2001 entered
                into
                with J.P. Morgan Europe Limited as agent for a syndicate of lenders
                in
                respect of Vessel A.

            

    

     

    
      	 	
              1.1.46

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

            

    

     

    
      	 	
              1.1.47

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

            

    

     

    
      	 	
              1.1.48

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

            

    

     

    
      	 	
              1.1.49

            	
              "Fee
                Letter"
                means a letter or letters from the Agent to the Borrower setting
                out
                certain fees payable to the Agent in connection with the
                Facility.

            

    

     

    
      	 	
              1.1.50

            	
              "the
                Finance Parties"
                means the Banks, the Arranger, the Agent and any Future Swap
                Provider.

            

    

     

     

     

    
      
        
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              1.1.51

            	
              "Financial
                Indebtedness"
                means any indebtedness of any person for or in respect
                of:

            

    

     

    
      	 	
              (a)

            	
              moneys
                borrowed or raised;

            

    

     

    
      	 	
              (b)

            	
              amounts
                raised under any acceptance credit
                facility;

            

    

     

    
      	 	
              (c)

            	
              amounts
                raised pursuant to any note purchase facility or the issue of bonds,
                notes, debentures, loan stock or similar
                instruments;

            

    

     

    
      	 	
              (d)

            	
              amounts
                raised pursuant to any issue of shares of the relevant person which
                are
                expressed to be redeemable;

            

    

     

    
      	 	
              (e)

            	
              the
                amount of any liability in respect of leases or hire purchase contracts
                which would, in accordance with GAAP, be treated as finance or capital
                leases;

            

    

     

    
      	 	
              (f)

            	
              the
                amount of any liability in respect of any purchase price for assets
                or
                services, the payment of which is deferred for a period in excess
                of one
                hundred and eighty (180) days;

            

    

     

    
      	 	
              (g)

            	
              all
                reimbursement obligations whether contingent or not in respect of
                amounts
                paid under a letter of credit or similar
                instrument;

            

    

     

    
      	 	
              (h)

            	
              all
                interest rate, currency swap and similar agreements obliging the
                making of
                payments, whether periodically or upon the happening of a contingency
                (and
                the value of such indebtedness shall be the mark-to-market valuation
                of
                such transaction at the relevant
                time);

            

    

     

    
      	 	
              (i)

            	
              amounts
                raised under any other transaction (including, without limitation,
                any
                forward sale or purchase agreement) having the commercial effect
                of a
                borrowing; and

            

    

     

    
      	 	
              (j)

            	
              any
                guarantee of indebtedness falling within paragraphs (a) to (i)
                above.

            

    

     

    
      	 	
              1.1.52

            	
              "First
                Reduction Date"
                means the date falling six (6) calendar months after the Execution
                Date.

            

    

     

     

     

     

    
      
        
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              1.1.53

            	
              "Free
                Liquidity"
                means cash, cash equivalents and marketable securities to which the
                Borrower and/or its Subsidiaries shall have free, immediate and direct
                access each as reflected in the Borrower's most recent Borrower's
                Accounts.

            

    

     

    
      	 	
              1.1.54

            	
              "Future
                Swap Provider"
                means any party that enters into a Master Agreement with the Borrower
                for
                the purpose of hedging interest costs in relation to the Facility
                and is
                designated by the Borrower to the Agent as a Future Swap
                Provider.

            

    

     

    
      	 	
              1.1.55

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

            

    

     

    
      	 	
              1.1.56

            	
              "General
                Revolving Drawing"
                means a Drawing other than a Distribution
                Drawing.

            

    

     

    
      	 	
              1.1.57

            	
              "General
                Partner"
                means Teekay GP L.L.C., a Marshall Islands limited liability company
                acting in its capacity as the general partner in the
                Borrower.

            

    

     

    
      	 	
              1.1.58

            	
              "Guarantors"
                means the Corporate Guarantor and each of the Owners (each a "Guarantor").

            

    

     

    
      	 	
              1.1.59

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

            

    

     

    
      	 	
              1.1.60

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

            

    

     

     

     

     

     

     

    
      
        
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              1.1.61

            	
              "Interest
                Payment Date"
                means each date for the payment of interest in accordance with
                Clause 6.

            

    

     

    
      	 	
              1.1.62

            	
              "Interest
                Period"
                means each interest period selected by the Borrower or agreed by
                the Banks
                pursuant to Clause 6.

            

    

     

    
      	 	
              1.1.63

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

            

    

     

    
      	 	
              1.1.64

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

            

    

     

    
      	 	
              1.1.65

            	
              "the
                ISPS Code"
                means the International Ship and Port Security Code as adopted by
                the
                Conference of Contracting Governments to the Safety of Life at Sea
                Convention 1974 on 13 December 2002 and incorporated as Chapter XI-2
                of
                the Safety of Life at Sea Convention
                1974.

            

    

     

    
      	 	
              1.1.66

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

            

    

     

    
      	 	
              1.1.67

            	
              "LIBOR"
                means the rate, rounded to the nearest four decimal places downwards
                (if
                the digit displayed in the fifth decimal place is 1,2,3 or 4) or
                upwards
                (if the digit displayed in the fifth decimal place is 5,6,7,8 or 9)
                displayed on Telerate page 3750 (or such other page or pages which
                replace(s) such page for the purposes of displaying offered rates
                of
                leading banks, for deposits in Dollars of amounts equal to the amount
                of
                the relevant Drawing for a period equal in length to the relevant
                Interest
                Period or if there is no such display rate then available for Dollars
                for
                an amount comparable to the Drawing, the arithmetic mean (rounded
                to the
                nearest four decimal places downwards (if the digit displayed in
                the fifth
                decimal place is 1, 2, 3 or 4) or upwards if the digit displayed
                in the
                fifth decimal place is 5, 6, 7, 8 or 9) of the respective rates notified
                to the Agent by each of the Reference Banks as the rate at which
                it is
                offered deposits in Dollars and for the required period by prime
                banks in
                the London Interbank Market.

            

    

     

     

     

     

     

     

     

    
      
        
          \P1\3522333.10

        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    
      	 	
              1.1.68

            	
              "Majority
                Banks"
                means any one or more Banks whose combined Proportionate Shares exceed
                sixty six and two thirds per centum
                (662⁄3%).

            

    

     

    
      	 	
              1.1.69

            	
              "Managers"
                means Teekay Servicios Maritimos S.L. as the technical managers of
                the
                Vessels and Teekay Shipping Limited as the commercial managers of
                the
                Vessel (each a "Manager").

            

    

     

    
      	 	
              1.1.70

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

            

    

     

    
      	 	
              1.1.71 

            	
              "Margin"
                means fifty five basis points
                (55bps).

            

    

     

    
      	 	
              1.1.72

            	
              "Master
                Agreement"
                means any ISDA Master Agreement entered into between a Future Swap
                Provider and the Borrower for the purpose of hedging interest costs
                under
                the Facility (and designated by the Borrower as a Master Agreement
                for the
                purposes of this Facility) and each Confirmation exchanged pursuant
                to
                that Master Agreement.

            

    

     

    
      	 	
              1.1.73

            	
              "Master
                Agreement Liabilities"
                means at any relevant time all liabilities of the Borrower to a Future
                Swap Provider under or pursuant to a Master Agreement, whether actual
                or
                contingent, present or future.

            

    

     

    
      	 	
              1.1.74

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

            

    

     

     

     

     

     

     

     

     

    
      
        
          \P1\3522333.10

        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (d)

            	
              the
                validity, legality or enforceability of any security expressed to
                be
                created pursuant to any Security Document or the priority and ranking
                of
                any such security,

            

    

     

    
      	 	
               

            	
              provided
                that, in determining whether any of the forgoing circumstances shall
                constitute such a material adverse change or material adverse effect
                for
                the purposes of this definition, the Finance Parties shall consider
                such
                circumstance in the context of (x) the Borrower Group taken as a
                whole and
                (y) the ability of the Borrower to perform each of its obligations
                under
                the Security Documents.

            

    

     

     

    
      	 	
              1.1.75

            	
               "Material
                Subsidiary"
                means a Subsidiary of the Borrower
                whose:

            

    

     

    
      	 	
              (a)

            	
              net
                assets exceed 10 per cent. of the consolidated net assets of the
                Borrower
                Group; or

            

    

     

    
      	 	
              (b)

            	
              gross
                assets exceed 10 per cent of the consolidated gross assets of the
                Borrower
                Group;

            

    

     

    
      	 	
              (c)

            	
              current
                revenues exceed 10 percent. of the consolidated revenues of the Borrower
                Group during the two most recent consecutive
                quarters.

            

    

     

    
      	 	
              1.1.76

            	
              "the
                Maximum Facility Amount"
                means an amount not exceeding the three hundred and thirty million
                Dollars
                ($330,000,000) subject to any reductions effected in accordance with
                Clauses 2.4, 15.7 and 15.8.

            

    

     

     

     

     

     

     

     

    
      
        
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        13

        
          

        

      

      
        
        

      

    

     

    
      	 	
              1.1.77

            	
              "Mortgages"
                means together the first priority Spanish ship mortgages over each
                of the
                Vessels made or to be made between the relevant Owner and the Banks
                referred to in Clause 8.1.5 (each a "Mortgage").

            

    

     

    
      	 	
              1.1.78

            	
              "Owner"
                means in respect of Vessel A, Naviera Teekay Gas S.L. (formerly Naviera
                F
                Tapias Gas S.A.) and in respect of Vessel B, Naviera Teekay Gas II
                S.L.
                (formerly Naviera F Tapias Gas II
                S.A.)

            

    

     

    
      	 	
              1.1.79

            	
              "Owners
                Guarantee"
                means the joint and several guarantee and indemnity of each of the
                Owners
                in respect of the Indebtedness referred to in Clause
                8.1.1.

            

    

     

    
      	 	
              1.1.80

            	
              "Party"
                means a party to this Agreement and any Future Swap Provider.
                

            

    

     

    
      	 	
              1.1.81

            	
              "Permitted
                Liens"
                means (i) any Encumbrance which has the prior written approval of
                the
                Agent acting upon the instructions of all the Banks or (ii) any
                Encumbrances that do not exceed ten million Dollars ($10,000,000)
                and
                arise either by operation of law or in the ordinary course of the
                business
                of the relevant Security Party which are discharged in the ordinary
                course
                of business.

            

    

     

    
      	 	
              1.1.82

            	
              "Pledgor"
                means the Corporate Guarantor.

            

    

     

    
      	 	
              1.1.83

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

            

    

     

    
      	 	
              1.1.84

            	
              "Pre-Approved
                Classification Society"
                means any of Det norske Veritas, Lloyds Register of Shipping, American
                Bureau of Shipping (ABS), Germanischer Lloyd or Bureau
                Veritas.

            

    

     

    
      	 	
              1.1.85

            	
              "Pre-Approved
                Flag"
                means Spain, Bahamas, Singapore, the Marshall Islands, Norwegian
                International Ship Registry, Liberia, Isle of Man, Cayman Islands
                and
                Bermuda.

            

    

     

    
      	 	
              1.1.86

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

            

    

     

     

     

     

     

    
      
        
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        14

        
          

        

      

      
        
        

      

    

     

    
      	 	
              1.1.87

            	
              "Proportionate
                Share"
                means, for each Bank, the percentage that its Commitment bears to
                the
                aggregate Commitments of all Banks from time to time, being initially
                the
                percentage indicated against the name of that Bank in Schedule
                1.

            

    

     

    
      	 	
              1.1.88

            	
              "Reference
                Banks"
                means ING Bank N.V., HSBC Bank plc and The Royal Bank of Scotland
                plc.

            

    

     

    
      	 	
              1.1.89

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

            

    

     

    
      	 	
              1.1.90

            	
              "the
                Security Documents"
                means this Agreement, the Assignments, the Owners Guarantee, the
                Shares
                Charges, the Corporate Guarantee, the Mortgages, or (where the context
                permits) any one or more of them, and any other agreement or document
                which may at any time be executed as security for the payment of
                all or
                any part of the Indebtedness.

            

    

     

    
      	 	
              1.1.91

            	
              "Security
                Parties"
                means, at any relevant time, the Borrower, the Owners, the Corporate
                Guarantor, the Pledgor and any other party who may at any time during
                the
                Facility Period be liable for, or provide security for, all or any
                part of
                the Indebtedness, and "Security
                Party"
                means any one of them. 

            

    

     

    
      	 	
              1.1.92

            	
              "Shares
                Charges"
                means the pledges or charges of the shares of each of the Owners
                executed
                by the Pledgor in favour of the Banks referred to in Clause
                8.1.3.

            

    

     

    
      	 	
              1.1.93

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

            

    

     

    
      	 	
              1.1.94

            	
              "SMS"
                means, in relation to each Vessel, a safety management system for
                that
                Vessel developed and implemented in accordance with the ISM Code
                and
                including the functional requirements, duties and obligations required
                by
                the ISM Code.

            

    

     

     

     

     

     

     

    
      
        
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        15

        
          

        

      

      
        
        

      

    

     

    
      	 	
              1.1.95

            	
              "Subordination
                Agreement"
                means a subordination agreement to be entered into between the Borrower,
                the Agent on behalf of the Banks and itself and a Future Swap Provider
                pursuant to which the Future Swap Provider will subordinate its interest
                in the Security Documents to that of the Banks and the Agent in such
                form
                as the Agent (acting on the instructions of all the Lenders, such
                instructions to be obtained by the Agent and given by the Lenders
                as soon
                as possible) shall reasonably
                require.

            

    

     

    
      	 	
              1.1.96

            	
              "Subsequent
                Reduction Dates"
                means each date falling at consecutive six (6) monthly intervals
                after the
                previous Subsequent Reduction Date which in the case of the first
                Subsequent Reduction Date shall be six (6) months after the First
                Reduction Date.

            

    

     

    
      	 	
              1.1.97

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

            

    

     

    
      	 	
              1.1.98

            	
              "Tangible
                Net Worth"
                means the issued and paid up share capital (including share premium
                or
                items of a similar nature (but excluding shares which are expressed
                to be
                redeemable)), loans from shareholders (where subordinated to the
                satisfaction of the Agent), and amounts standing to the credit of
                the
                capital reserves of the Borrower,

            

    

     

    
      	 	
              (a)

            	
              plus
                any credit balance carried forward on the Borrower's consolidated
                profit
                and loss account,

            

    

     

    
      	 	
              (b) 

            	
              less:

            

    

     

    
      	 	
               

            	
              (i) any
                debit balance carried forward on the Borrower's consolidated profit
                and
                loss account;

            

    

     

    
      	 	
               

            	
              (ii) any
                amount shown for goodwill, including on consolidation, or any other
                intangible property (other than intangible property relating to contracts
                as shown in the balance sheet of the Borrower);
                and

            

    

     

     

     

     

     

    
      
        
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        16

        
          

        

      

      
        
        

      

    

     

    
      	 	
               

            	
              (iii) any
                amount attributable to minority interests in
                Subsidiaries.

            

    

     

     

    
      	 	
              1.1.99

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

            

    

     

    
      	 	
              1.1.100

            	
              "the
                Termination Date"
                means the twelfth anniversary of the Execution
                Date.

            

    

     

    
      	 	
              1.1.101

            	
              "Total
                Commitment"
                means at any time the sum of all the
                Commitments.

            

    

     

    
      	 	
              1.1.102

            	
              "Total
                Loss",
                in relation to a Vessel, means:- 

            

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b) 

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

            

    

     

    
      	 	
              (c)

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

            

    

     

     

    
      	 	
              1.1.103

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

            

    

     

    
      	 	
              (a) 

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

            

    

     

     

     

     

     

    
      
        
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        17

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (b) 

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

            

    

     

     

    
      	 	
              1.1.104

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

            

    

     

    
      	 	
              1.1.105 

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

            

    

     

    
      	 	
              1.1.106

            	
               "the
                Trust Property"
                means:-

            

    

     

    
      	 	
              (a) 

            	
              the
                benefit of Clause 8 and the covenants contained in Clause 9.3;
                and

            

    

     

    
      	 	
              (b) 

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

            

    

     

    
      	 	
              1.1.107

            	
              "Valuation"
                means in relation to a Vessel, the written valuation of that Vessel
                expressed in Dollars addressed to all the Banks prepared by one of
                the
                Approved Brokers (or such other firms of reputable independent shipbrokers
                as may be acceptable to the Majority Banks), to be nominated by the
                Borrower. Such valuations shall be prepared at the Borrower's expense,
                without a physical inspection, on the basis of a sale for prompt
                delivery
                for cash at arm's length on a charter free basis between a willing
                buyer
                and a willing seller.

            

    

     

    
      	 	
              1.1.108

            	
              "Vessel
                A"
                means m.v. "HISPANIA SPIRIT" and everything now or in the future
                belonging
                to her on board and
                ashore.

            

    

     

    
      	 	
              1.1.109

            	
              "Vessel
                B"
                means m.v. "GALICIA SPIRIT" and everything now or in the future belonging
                to her on board and
                ashore.

            

     

    
      	 	
              1.1.110

            	
              "the
                Vessels" means
                Vessel A and Vessel B (each a "Vessel").

            

    

     

     

     

     

     

     

     

    
      
        
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    1.2 Interpretation

     

    In
      this
      Agreement:-

     

    
      	 	
              1.2.1

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

            

    

     

    
      	 	
              1.2.2

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

            

    

     

    
      	 	
              1.2.3

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

            

    

     

    
      	 	
              1.2.4

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

            

    

     

    
      	 	
              1.2.5

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

            

    

     

    
      	 	
              1.2.6

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

            

    

     

    
      	 	
              1.2.7

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

            

    

     

    
      	 	
              1.2.8

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

            

    

     

    
      	 	
              1.2.9

            	
              in
                the case of the Borrower, any references to company or body corporate,
                incorporation, shares, officers and directors and shareholders shall
                be
                construed as references to limited partnership, formation, common
                units,
                partners and unitholders as
                appropriate;

            

    

     

    
      	 	
              1.2.10

            	
              references
                to times of day are unless otherwise stated to London time;
                and

            

    

     

     

     

     

     

     

    
      
        
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        19

        
          

        

      

      
        
        

      

    

     

    
      	 	
              1.2.11

            	
              unless
                the contrary intention appears, a reference to a month or months
                is a
                reference to a period starting on one day in a calendar month and
                ending
                on the numerically corresponding day in the next calendar month or
                the
                calendar month in which it is to end, except
                that:

            

    

     

    
      	 	
              (i) 

            	if the numerically corresponding day is not a Business
              Day, the period will end on the next Business Day in that month (if
              there
              is one) or the preceding Business Day (if there is
              not);

    

     

    
      	 	
              (ii) 

            	
              if
                there is no numerically corresponding day in that month, that period
                will
                end on the last Business Day in that month;
                and

            

    

     

    
      	 	
              (iii) 

            	
              notwithstanding
                sub-paragraph (i) above, a
                period which commences on the last Business Day of a month will end
                on the
                last Business Day in the next month or the calendar month in which
                it is
                to end, as appropriate.

            

    

     

     

    
      	2  	
              The
                Facility and its Purpose

            

    

     

    
      	 	
              2.1

            	
              Agreement
                to lend Subject
                to the terms and conditions of this Agreement, and in reliance on
                each of
                the representations and warranties made or to be made in or in accordance
                with each of the Security Documents, each of the Banks agrees to
                advance
                to the Borrower its Commitment of an aggregate principal amount not
                exceeding the Maximum Facility Amount to be used by the Borrower
                for the
                purposes referred to in the Recital provided however that any Drawing
                that
                the Borrower intends to use as a Distribution Drawing shall be designated
                as a Distribution Drawing in the relevant Drawdown Notice completed
                in
                accordance with clause 2.3 and such Distribution Drawing shall be
                subject
                to the repayment terms set forth in Clause
                5.1.

            

    

     

    
      	 	
              2.2

            	
              Drawings
                Subject
                to satisfaction by the Borrower of the conditions set out in
                Clause 3.1 (in respect of the first Drawing), Clause 3.3 (in respect
                of all subsequent Drawings), and subject to Clause 2.3, and provided
                that
                the maximum aggregate amount of the Facility Outstandings at any
                given
                time during the Facility Period shall not exceed the Maximum Facility
                Amount, each Drawing shall be advanced to the Borrower, in each case
                by
                the Agent transferring the amount of the Drawing to such account
                as the
                Borrower shall notify to the Agent in the relevant Drawdown Notice
                by such
                same day method of funds transfer as the Agent shall
                select.

            

    

     

     

     

     

     

     

     

    
      
        
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              2.3

            	
              Advance
                of Drawings
                Each Drawing shall be advanced in Dollars. Each Drawing shall be
                advanced
                on a Business Day, provided that the Borrower shall have given to
                the
                Agent not more than ten and not fewer than three Business Days' notice
                in
                writing (and if such notice is given on the third Business Day prior
                to
                the required Advance Date it shall be given not later than 3:00 pm)
                materially in the form set out in Schedule 5 of the required Advance
                Date of the Drawing in question and provided that the requested Drawing
                would not cause a breach of Clause 2.5. Each Drawdown Notice once
                given
                shall be irrevocable and shall constitute a warranty by the Borrower
                that:- 

            

    

     

    
      	 	
              2.3.1

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

            

    

     

    
      	 	
              2.3.2

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

            

    

     

    
      	 	
              2.3.3

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

            

    

     

    
      	 	
               

            	
              The
                Drawdown Notice shall state that the Drawing shall be designated,
                based on
                its intended use either as a General Revolving Drawing or a Distribution
                Drawing

            

    

     

    
      	 	
               

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

            

    

     

    
      	 	
              2.4 

            	
              Facility
                Reduction

            

    

     

     

    
      	 	
              2.4.1

            	
              The
                aggregate amount of the Facility available to the Borrower for drawing
                under this Agreement shall be three hundred and thirty million Dollars
                ($330,000,000) during the period from the Execution Date until the
                First
                Reduction Date. On the First Reduction Date and on each of the Subsequent
                Reduction Dates the amount of the Facility available for drawing
                shall be
                reduced in accordance with the reduction schedule set out in Schedule
                3.
                On the Termination Date the Facility available shall be reduced to
                zero.
                Subject to the proviso hereto, the mandatory reductions in the amount
                of
                the Facility available for drawing required pursuant to this Clause
                will
                be made in the amounts and at the times specified whether or not
                the
                Maximum Facility Amount is reduced pursuant to Clause 2.4.2, Clause
                2.4.3,
                Clause 2.4.4, Clause 15.7 or Clause 15.8. PROVIDED ALWAYS THAT any
                reductions pursuant to Clause 2.4.2 (voluntary reductions), Clause
                2.4.3
                (sale) or Clause 2.4.4 (Total Loss) shall be applied to the remaining
                mandatory reductions hereunder on a pro rata
                basis.

            

    

     

     

     

     

     

     

     

    
      
        
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              2.4.2

            	
              The
                Borrower may voluntarily cancel the Maximum Facility Amount in whole
                or in
                part in an amount of not less than five million Dollars ($5,000,000)
                such
                amount to be in integral multiples of one million Dollars ($1,000,000),
                provided that it has first given to the Agent not fewer than three
                (3)
                Business Days' prior written notice expiring on a Business Day (the
                "Cancellation
                Date")
                of its desire to reduce the Maximum Facility Amount. Such notice,
                once
                received by the Agent, shall be irrevocable and shall oblige the
                Borrower
                to make payment of all interest and Commitment Commission accrued
                on the
                amount so cancelled up to and including the Cancellation Date together
                with any Break Costs in respect of such cancelled amount if the
                Cancellation Date is not an Interest Payment Date. Any such reduction
                in
                the Maximum Facility Amount shall not be
                reversed.

            

    

     

    
      	 	
              2.4.3

            	
              In
                the event of a sale or disposal of a Vessel, the Maximum Facility
                Amount
                shall be reduced by the greater of (i) an amount equal to the Total
                Commitment multiplied by a fraction the numerator of which is the
                value of
                the relevant Vessel (based on a Valuation) and the denominator of
                which is
                the aggregate value of the Vessels (based on their Valuations) and
                (ii) an
                amount sufficient to ensure that the Total Commitment remaining after
                such
                reduction does not exceed the aggregate of the remaining scheduled
                charterhire payments to be paid to the relevant Owner under the relevant
                Charter for the remaining Vessel during the remaining period of that
                Charter (ignoring any option period which has not been exercised)
                (the
                "Mandatory
                Commitment Reduction").
                Such reduction shall be made on the date of such sale or disposal.
                If, as
                a result of any reduction in the Maximum Facility Amount pursuant
                to this
                Clause, the Facility Outstandings exceed the Maximum Facility Amount,
                the
                Borrower shall, on the date of the sale or disposal, prepay such
                amount of
                the Facility Outstandings as will ensure that the Facility Outstandings
                are not greater than the Maximum Facility Amount. Any such prepayment
                shall oblige the Borrower to make payment of all interest and Commitment
                Commission accrued on the amount so reduced up to and including the
                date
                of reduction together with any Break Costs in respect of such reduced
                amount if the date of such reduction is not an Interest Payment Date.
                Any
                such reduction in the Maximum Facility Amount shall not be
                reversed.

            

    

     

     

     

     

     

     

    
      
        
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              2.4.4

            	
              In
                the event that either Vessel becomes a Total Loss, on the earlier
                to occur
                of (a) the date of receipt of the proceeds of the Total Loss and
                (b) the
                date falling one hundred and eighty (180) days after the occurrence
                of the
                Total Loss (the "Reduction
                Date"),
                the Maximum Facility Amount shall be reduced by the Mandatory Commitment
                Reduction. Any such reductions in the Maximum Facility Amount shall
                not be
                reversed. If, as a result of any reduction in the Maximum Facility
                Amount
                pursuant to this Clause the Facility Outstandings exceed the Maximum
                Facility Amount, the Borrower shall, on the earlier to occur of (i)
                the
                date on which the relevant Owner receives the proceeds of such Total
                Loss
                and (ii) the one hundred and eightieth day after the date of such
                Total
                Loss occurring, prepay such amount of the Facility Outstandings as
                will
                ensure that the Facility Outstandings are not greater than the Maximum
                Facility Amount. Any such prepayment shall not be reborrowed and
                Clause
                5.4 shall apply to any such
                prepayment.

            

    

     

    
      	 	
              2.4.5

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

            

    

     

     

     

     

     

     

     

     

     

    
      
        
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              2.4.6

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

            

    

     

    
      	 	
              2.4.7

            	
              Any
                voluntary reductions of the Facility under Clause 2.4.2 or mandatory
                reductions of the Facility under Clause 2.4.3 or 2.4.4 shall be applied
                pro rata against the scheduled reductions of Commitment set out in
                Schedule 3.

            

    

     

    
      	 	
              2.5

            	
              Restrictions
                on Drawings
                The Borrower shall not be entitled to make more than one Drawing
                on any
                Business Day. Each Drawing shall be of an amount of not less than
                five
                million Dollars ($5,000,000). If at any time during the Facility
                Period
                the Facility Outstandings exceed the Maximum Facility Amount then
                available or if a proposed Drawing added to the Facility Outstandings
                would result in the Maximum Facility Amount being exceeded then the
                Borrower shall immediately pay to the Agent on behalf of the Banks
                such
                amounts as will ensure that the Facility Outstandings are equal to
                or less
                than the Maximum Facility Amount then available.
                

            

    

     

    
      	 	
              2.6

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

            

    

     

    
      	 	
              2.7

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

            

    

     

    
      	 	
              2.8

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

            

    

     

     

     

     

     

    
      
        
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              2.9

            	
              Loan
                facility and control accounts The
                Agent will open and maintain such loan facility account or such other
                control accounts as the Agent shall in its discretion consider necessary
                or desirable in connection with the Facility, and shall debit or
                credit
                such account with the amount of any Drawings hereunder, interest
                accrued,
                commission and expenses payable hereunder, and any amounts paid by
                the
                Borrower in respect of such obligations. Additionally:-
                

            

    

     

    
      	 	
              2.9.1

            	
              The
                balance on that account shall represent the amount of the Borrower's
                debt
                to the Banks from time to time
                hereunder.

            

    

     

    
      	 	
              2.9.2

            	
              Without
                prejudice to that account, each Bank shall open an account in the
                name of
                the Borrower which shall show, according to the Commitments of each
                Bank,
                the amounts owing to it in respect of the liabilities referred to
                above,
                with the effect that the balance on that account shall represent
                the
                amount owed by the Borrower to each Bank from time to
                time.

            

    

     

    
      	 	
              2.9.3

            	
              For
                the purposes of Article 571 et seq. of the Spanish Law on Civil Procedure
                (Ley de Enjuiciamiento Civil), the parties expressly agree that the
                Agent
                (or the Bank in question) may determine the debt due and payable
                which may
                be claimed in enforcement proceedings, by means of a certificate
                showing
                the balance on the Borrower's account or accounts. For the purposes
                of the
                preceding paragraph, it shall be sufficient for the purposes of bringing
                enforcement proceedings to produce an authorised copy of that document
                and
                a notarial instrument incorporating a certificate issued by the Agent
                (or
                by the Bank in question) showing that the debt has been calculated
                in
                accordance with the terms agreed by the parties in this deed and
                that the
                balance in question is the same as that on the account or accounts
                maintained by the Borrower.

            

    

     

    
      	 	
              2.9.4

            	
              It
                is expressly agreed that the balance on the account or accounts in
                question shall be treated as the evidence of the debt owed by the
                Borrower, and that may be claimed in accordance with this Clause
                2.9 and
                the Security Documents.

            

    

     

     

     

     

    
      
        
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      	3  	
              Conditions Precedent and Subsequent 

            

    

     

    
      	 	
              3.1

            	
              Conditions
                Precedent
                -
                First
                Drawing Before
                any Bank shall have any obligation to advance the first Drawing under
                the
                Facility, the Borrower shall deliver or cause to be delivered to
                or to the
                order of the Agent the following documents and
                evidence:-

            

    

     

    
      	 	
              3.1.1

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

            

    

     

    
      	 	
              3.1.2

            	
              Corporate
                authorities A
                copy, certified by a director or any duly authorised officer of the
                Security Party (or its sole member or general partner) in question
                as
                true, complete, accurate and neither amended nor revoked, of a resolution
                of the directors of each Security Party or such Security Party's
                general
                partner (together, where appropriate, with signed waivers of notice
                of any
                directors' meetings) approving, and authorising or ratifying the
                execution
                of, those of the Security Documents and each Drawdown Notice to which
                that
                Security Party is or is intended to be a party and all matters incidental
                thereto. 

            

    

     

    
      	 	
              3.1.3

            	
              Officer's
                certificate A
                certificate (i) signed by a duly authorised officer or representative
                of
                each of the Security Parties (or its sole member or general partner)
                setting out the names of the directors and officers of that Security
                Party
                (or its sole member or general partner) and (ii) issued by each Security
                Party's company registry confirming due incorporation and valid existence
                and (when such information is maintained by the registry) the names
                of its
                directors and shareholders.

            

    

     

    
      	 	
              3.1.4

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

            

    

     

     

     

     

     

     

     

    
      
        
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              3.1.5

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

            

    

     

    
      	 	
              3.1.6

            	
              Drawdown
                Notice A
                Drawdown Notice.

            

    

     

    
      	 	
              3.1.7

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

            

    

     

    
      	 	
              3.1.8

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

            

    

     

    
      	 	
              3.1.9

            	
              Shares
                Charges Documents
                Any documents required by the Shares
                Charges.

            

    

     

    
      	 	
              3.1.10

            	
              Certified
                copies
                Certified copies of the Charters.

            

    

     

    
      	 	
              3.1.11

            	
              Fee
                Letter The
                Fee Letter duly signed and payment of all bank fees that have fallen
                due
                thereunder and hereunder.

            

    

     

    
      	 	
              3.1.12

            	
              Evidence
                of Owners' title
                Confirmation satisfactory to the Agent that (a) the Vessels are
                permanently registered under the Vessels' respective flag states
                in the
                ownership of their respective Owners (b) that the Mortgages will
                be
                registered with first priority against the Vessels and (c) there
                will be
                no further Encumbrances registered against the
                Vessels.

            

    

     

    
      	 	
              3.1.13

            	
              Accounts
                The
                audited consolidated accounts for the Borrower for the year ended
                31
                December 2005.

            

    

     

    
      	 	
              3.1.14

            	
              Evidence
                of insurance Evidence
                that the Vessels are insured in the manner required by the Security
                Documents and that letters of undertaking will be issued in the manner
                required by the Security Documents, together with a written opinion
                on the
                Insurances from an insurance adviser appointed by the
                Agent.

            

    

     

     

     

     

     

    
      
        
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              3.1.15

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

            

    

     

    
      	 	
              3.2

            	
              Conditions
                Subsequent
                The Borrower undertakes to deliver or to cause to be delivered to
                the
                Agent on, or not later than ten (10) days or such other period as
                the
                Agent may have consented to after, the first Advance Date, the following
                additional documents and evidence:-

            

    

     

    
      	 	
              3.2.1

            	
              Legal
                opinions Such
                legal opinions as the Agent on behalf of the Banks shall require
                pursuant
                to Clause 3.1.8.

            

    

     

    
      	 	
              3.2.2

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

            

    

     

    
      	 	
              3.2.3

            	
              Letters
                of undertaking
                Letters of undertaking in respect of the Insurances as required by
                the
                Security Documents together with copies of the relevant policies
                or cover
                notes or entry certificates duly endorsed with the interest of the
                Agent.

            

    

     

    
      	 	
              3.2.4

            	
              Evidence
                of Owners' title
                Certificates of ownership and encumbrance (or equivalent) issued
                by the
                Registrar of Ships and the Registrar of Movable Assets (or equivalent
                officials) of the Vessels' flag state confirming that (a) the Vessels
                are
                permanently registered under that flag in the ownership of their
                respective Owners (b) the Mortgages have been registered with first
                priority against the Vessels and (c) there are no further Encumbrances
                registered against the Vessels.

            

    

     

    
      	 	
              3.3

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

            

    

     

     

     

     

    
      
        
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              3.4

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

            

    

     

    
      	 	
              3.5

            	
              Form
                and content All
                documents and evidence delivered to the Agent pursuant to this Clause
                shall:- 

            

    

     

    
      	 	
              3.5.1

            	
              be
                in form and substance reasonably acceptable to the Agent;
                

            

    

     

    
      	 	
              3.5.2

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

            

    

     

    
      	 	
              3.5.3

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

            

    

     

    
      	 	
              3.6

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

            

    

     

    
      	4  	
              Representations
                and Warranties

            

    

     

    
      	 	
              The
                Borrower represents and warrants to each of the Finance Parties at
                the
                Execution Date and (by reference to the facts and circumstances then
                pertaining) at the date of each Drawdown Notice, at each Advance
                Date and
                at each Interest Payment Date as follows (except that the representation
                and warranty contained at Clause 4.16 shall only be made on the first
                Advance Date and that the representation and warranty contained at
                Clause
                4.9 shall only be made on the Execution Date)
                :-

            

    

     

    
      	 	
              4.1

            	
              Incorporation
                and capacity Each
                of the Security Parties is a body corporate duly constituted, organised
                and validly existing and (where applicable) in good standing under
                the law
                of its country of incorporation, in each case with perpetual
                corporate existence and the power to sue and be sued, to own its
                assets
                and to carry on its business, and all of the corporate shareholders
                (if
                any) of each Security Party are duly constituted and existing under
                the
                laws of their countries of incorporation with perpetual corporate
                existence and the power to sue and be sued, to own their assets and
                to
                carry on their business and are acting on their own
                account.

            

    

     

     

    
      
        
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              4.2

            	
              Solvency
                None
                of the Security Parties is insolvent or in liquidation or administration
                or subject to any other insolvency procedure, and no receiver,
                administrative receiver, administrator, liquidator, trustee or analogous
                officer has been appointed in respect of any of the Security Parties.
                For
                this purpose a Security Party will be deemed insolvent if it is unable
                to
                pay its debts within the meaning of S.123 of the Insolvency Act 1986
                or,
                as the case may be, the Spanish Insolvency Act,
                22/2003.

            

    

     

    
      	 	
              4.3

            	
              Binding
                obligations The
                Security Documents when duly executed and delivered will constitute
                the
                legal, valid and binding obligations of the Security Parties enforceable
                in accordance with their respective terms subject to applicable laws
                regarding creditors' rights in
                general.

            

    

     

    
      	 	
              4.4

            	
              Satisfaction
                of conditions All
                acts, conditions and things required to be done and satisfied and
                to have
                happened prior to the execution and delivery of the Security Documents
                in
                order to constitute the Security Documents the legal, valid and binding
                obligations of the Security Parties in accordance with their respective
                terms have been done, satisfied and have happened in compliance with
                all
                applicable laws.

            

    

     

    
      	 	
              4.5

            	
              Registrations
                and consents With
                the exception only of the registrations referred to in Clauses 3.2.2
                and
                registration in Spain of the relevant Security Documents all (if
                any)
                consents, licences, approvals and authorisations of, or registrations
                with
                or declarations to, any governmental authority, bureau or agency
                which may
                be required in connection with the execution, delivery, performance,
                validity or enforceability of the Security Documents have been obtained
                or
                made and remain in full force and effect and the Borrower is not
                aware of
                any event or circumstance which could reasonably be expected adversely
                to
                affect the right of any of the Security Parties to hold and/or obtain
                renewal of any such consents, licences, approvals or
                authorisations.

            

    

     

     

     

     

     

     

    
      
        
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              4.6

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

            

    

     

    
      	 	
              4.7

            	
              No
                material litigation Except
                for those matters disclosed in writing to the Agent, there is no
                action,
                suit, arbitration or administrative proceeding nor any contemplated
                action, suit, arbitration or administrative proceeding pending or
                to its
                knowledge about to be pursued before any court, tribunal or governmental
                or other authority which is not covered by adequate insurance which
                would,
                or would be likely to, have a materially adverse effect on the business
                or
                financial condition of the Borrower Group taken as a
                whole.

            

    

     

    
      	 	
              4.8

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

            

    

     

    
      	 	
              4.9

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

            

    

     

    
      	 	
              4.10

            	
              Use
                of Facility
                The Facility will be used to refinance the Existing Indebtedness
                and
                thereafter for the general corporate purposes of the Borrower
                Group.

            

    

     

    
      	 	
              4.11

            	
              Material
                Adverse Change
                Since the publication of the Borrower's Accounts for the year ended
                31
                December 2005 there has been no change in the business, assets, operations
                or condition (financial or otherwise) of the Borrower Group taken
                as a
                whole which has had a Material Adverse
                Effect.

            

    

     

     

     

     

    
      
        
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              4.12

            	
              No
                default
                None of the Security Parties is in default of its obligations under
                any
                other financing documents to which it is a party to an extent or
                in a
                manner which might have a Material Adverse Effect on the business
                or
                condition (financial or otherwise) of the Borrower Group taken as
                a whole
                and no Event of Default is continuing or might reasonably be expected
                to
                result from the advance of any
                Drawing.

            

    

     

    
      	 	
              4.13

            	
              Pari
                passu ranking
                The payment obligations of each of the Security Parties under the
                Security
                Documents to which it is a party rank at least pari passu with the
                claims
                of all its other unsecured and unsubordinated creditors, except for
                obligations mandatorily preferred by law applying to companies
                incorporated in the relevant Security Party's country of incorporation
                or
                otherwise applicable to that Security
                Party.

            

    

     

    
      	 	
              4.14

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

            

    

     

    
      	 	
              4.15

            	
              Governing
                Law and Judgments
                In
                any proceedings taken in any of the Security Parties' jurisdiction
                of
                incorporation or organisation in relation to any of the Security
                Documents
                in which there is an express choice of the law, the submission to
                that
                jurisdiction of a particular country as the governing law thereof,
                that
                choice of law and any judgment or (if applicable) arbitral award
                obtained
                in that country will be recognised and
                enforced.

            

    

     

    
      	 	
              4.16

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

            

    

     

     

     

     

    
      
        
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              4.17

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

            

    

     

    
      	 	
              4.18

            	
              Borrower's
                Accounts The
                Borrower's Accounts for the year ending 31 December 2005 and all
                other annual financial statements relating to the Borrower required
                to be
                delivered under Clause 10.2.18 of this Agreement, were each prepared
                in
                accordance with GAAP, give (in conjunction with the notes thereto)
                a true
                and fair view of (in the case of annual financial statements) or
                fairly
                represent (in the case of quarterly accounts) the financial condition
                of
                the Borrower Group at the date as of which they were prepared and
                the
                results of the Borrower Group’s operations during the financial period
                then ended.

            

    

     

    
      	 	
              4.19

            	
              Ownership
                and Security

            

    

     

    
      	 	
              4.19.1

            	
              (i) The
                Corporate Guarantor owns (directly or indirectly) a majority of the
                shares
                in the Owners;

            

    

     

    
      	 	
               

            	
              (ii) the
                Borrower owns (directly or indirectly) a majority of the shares in
                the
                Corporate Guarantor;
                and

            

    

     

    
      	 	
               

            	
              (iii) Teekay
                Shipping Corporation owns (directly or indirectly) a majority of
                the
                limited liability company interests in the General
                Partner.

            

    

     

    
      	 	
              4.19.2

            	
              Each
                of the Security Parties is the legal and beneficial owner of all
                assets
                and other property which it purports to charge, mortgage, pledge,
                assign
                or otherwise secure pursuant to each Security Document and those
                Security
                Documents to which it is a party create and give rise to valid and
                effective Security having the ranking expressed in those Security
                Documents.

            

    

     

     

     

     

    
      
        
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              4.20

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

            

    

     

    
      	 	
              4.21

            	
              Adverse
                consequences To
                the best of the Borrower's knowledge the execution, delivery and
                subsequent performance by each of the Security Parties and Finance
                Parties
                of the Security Documents will not have any adverse consequences
                for the
                Finance Parties.

            

    

     

    
      	 	
              4.22

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

            

    

     

    
      	 	
              4.22.1

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

            

    

     

    
      	 	
              4.22.2

            	
              the
                limitation of enforcement by laws relating to bankruptcy, insolvency,
                liquidation, reorganisation, court schemes, moratoria, administration
                and
                other laws generally affecting or limiting the rights of
                creditors;

            

    

     

    
      	 	
              4.22.3

            	
              the
                time barring of claims under any applicable limitation
                acts;

            

    

     

    
      	 	
              4.22.4 

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

            

    

     

    
      	 	
              4.22.5

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

            

     

     

     

    
      	5  	
              Repayment
                and Prepayment 

            

    

     

    
      	 	
              5.1

            	
              Repayment
                Each
                Drawing shall be repaid by the Borrower to the Agent on behalf of
                the
                Banks on the last day of its Interest Period unless the Borrower
                selects a
                further Interest Period for that Drawing in accordance with Clause
                6,
                provided that the Borrower shall not be permitted to select such
                further
                Interest Period if an Event of Default or Potential Event of Default
                has
                occurred and shall then be obliged to repay such Drawing on the last
                day
                of its then current Interest Period. The Borrower shall on the Termination
                Date repay to the Agent as agent for the Banks all Facility Outstandings.
                The Borrower will cause the aggregate outstanding principal balance
                of
                Distribution Drawings to be zero for a period of at least fifteen
                (15)
                consecutive Business Days during any twelve (12) month
                period.

            

    

     

     

     

     

    
      
        
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              5.2

            	
              Prepayment
                The
                Borrower
                may prepay the Facility Outstandings in whole or in part in integral
                multiples of one million Dollars ($1,000,000) (or as otherwise may
                be
                agreed by the Agent), each such prepayment to be of a minimum amount
                of
                five million Dollars ($5,000,000) on the last day of an Interest
                Period,
                provided that it has first given to the Agent not fewer than five
                (5) days
                prior written notice expiring on the last day of an Interest Period
                of its
                intention to do so. Any notice pursuant to this Clause 5.2 once given
                shall be irrevocable and shall oblige the Borrower to make the prepayment
                referred to in the notice on the last day of the Interest Period
                specified
                in the notice, together with all interest accrued on the amount prepaid
                up
                to and including that last day of the Interest Period in
                question.

            

    

     

    
      	 	
              5.3

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

            

    

     

    
      	 	
              5.4

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

            

    

     

    
      	 	
              5.5

            	
              Application
                of prepayments Any
                prepayment by the Borrower in an amount less than the Indebtedness
                shall
                be applied in satisfaction or reduction first of any costs and other
                expenses outstanding; secondly of all interest accrued with respect
                to the
                outstanding Drawings; and thirdly of the outstanding
                Drawings.

            

    

     

    
      	 	
              5.6

            	
              Reborrowing
                of prepayments Any
                amount prepaid pursuant to this Agreement may be reborrowed in accordance
                with Clause 2.2.

            

    

     

     

     

     

     

    
      
        
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      	6  	
              Interest

            

    

     

    
      	 	
              6.1

            	
              Interest
                Periods
                The period during which any Drawing shall be outstanding pursuant
                to this
                Agreement shall be divided into consecutive Interest Periods of one,
                three, six or twelve months' duration, as selected by the Borrower
                by
                written notice to the Agent not later than 3:00 p.m. on the fourth
                Business Day before the beginning of the Interest Period in question,
                or
                such other duration as may be agreed by the Banks in their discretion.
                No
                more than three one (1) month Interest Periods may be selected by
                the
                Borrower in each twelve (12) month period during the Facility
                Period.

            

    

     

    
      	 	
              6.2

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

            

    

     

    
      	 	
              6.3

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

            

    

     

    
      	 	
              6.4

            	
              Accrual
                and payment of interest During
                the Facility Period, interest
                shall accrue from day to day, shall be calculated on the basis of
                a 360
                day year and the actual number of days elapsed (or, in any circumstance
                where market practice differs, in accordance with the prevailing
                market
                practice) and shall be paid by the Borrower to the Agent on behalf
                of the
                Banks on the last day of each Interest Period and additionally, during
                any
                Interest Period exceeding three months, on the last day of each
                successive three month period after the beginning of that Interest
                Period.

            

    

     

    
      	 	
              6.5

            	
              Ending
                of Interest Periods If
                any Interest Period would end on a day which is not a Business Day,
                that
                Interest Period shall end on the next succeeding Business Day (unless
                the
                next succeeding Business Day falls in the next calendar month, in
                which
                event the Interest Period in question shall end on the immediately
                preceding Business Day).

            

    

     

     

     

     

    
      
        
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              6.6

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

            

    

     

    
      	 	
              6.7

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

            

    

     

    
      	7  	
              Fees

            

    

     

    
      	 	
              7.1

            	
              The
                Borrower shall pay to the Agent for distribution to the Banks Commitment
                Commission at the rate of seventeen point five basis points (17.5bps)
                per
                annum on any undrawn and uncancelled part of the Facility. The Commitment
                Commission will accrue from day to day on the basis of a 360 day
                year and
                the actual number of days elapsed and shall be paid quarterly in
                arrears
                from the Execution Date until the Commitment Termination Date with
                a pro
                rata payment being due and payable on the Commitment Termination
                Date.

            

    

     

    
      	 	
              7.2

            	
              The
                Borrower shall pay to the Agent the fees detailed in a fee letter
                dated on
                or about the date hereof made between the Borrower and the
                Agent.

            

    

     

    
      	8  	
              Security
                Documents

            

    

     

    
      	 	
              8.1

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

            

    

     

    
      	 	
              8.1.1

            	
              the
                Owners Guarantee
                the joint and several guarantee and indemnity of each of the Owners
                in
                respect of the Borrower's
                Obligations;

            

    

     

     

     

     

    
      
        
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              8.1.2

            	
              the
                Corporate Guarantee the
                guarantee and indemnity of the Corporate Guarantor in respect of
                the
                Borrower's Obligations;

            

    

     

    
      	 	
              8.1.3

            	
              Shares
                Charges
                a
                pledge of the shares of each of the Owners entered into by the Pledgor
                in
                favour of the Banks; 

            

    

     

    
      	 	
              8.1.4

            	
              the
                Assignments
                deeds of assignment of the Earnings, Insurances, Requisition Compensation
                and Charter Rights executed by the Owners as security for the Owners
                Guarantee; 

            

    

     

    
      	 	
              8.1.5

            	
              the
                Mortgages
                the first priority statutory ship mortgages over each of the Vessels
                executed by the relevant Owner and the Borrower in favour of the
                Banks as
                security for the Owners Guarantee.

            

    

     

    
      	9  	
              Agency
                and Trust

            

    

     

    
      	 	
              9.1

            	
              Appointment
                Each
                of the Finance Parties appoints the Agent its agent for the purpose
                of
                administering the Facility and the Security Documents and authorises
                the
                Agent and its directors, officers, employees and agents acting on
                the
                instructions from time to time of the Majority Banks, and subject
                to
                Clauses 9.4 and 9.19, to execute the Security Documents (other than
                the
                Mortgages and the Shares Charges) on its behalf and to exercise all
                rights, powers, discretions and remedies vested in the Banks under
                or
                pursuant to the Security Documents, together with all powers reasonably
                incidental to them. 

            

    

     

    
      	 	
              9.2

            	
              Authority
                Each
                of the Finance Parties irrevocably authorises the Agent, acting on
                the
                instructions from time to time of the Majority Banks (save where
                the terms
                of any Security Document expressly require the instructions of all
                of the
                Banks):- 

            

    

     

    
      	 	
              9.2.1

            	
              to
                give or withhold any consents or approvals; and

            

    

     

    
      	 	
              9.2.2

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

            

    

     

    
      	 	
              9.2.3

            	
              to
                collect, receive, release or pay any
                money;

            

    

     

    
      	 	
               

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

            

    

     

     

     

     

    
      
        
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              9.3

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

            

    

     

    
      	 	
              9.3.1

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

            

    

     

    
      	 	
              9.3.2

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

            

    

     

    
      	 	
              9.3.3

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

            

    

     

     

     

     

    
      
        
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              9.4

            	
              Limitations
                on authority Except
                with the prior written consent of each of the Banks, the Agent shall
                not
                be entitled to :-

            

    

     

    
      	 	
              9.4.1

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

            

    

     

    
      	 	
              9.4.2

            	
              agree
                to waive the payment of any sum of money payable by any of the Security
                Parties under the Security Documents;
                nor

            

    

     

    
      	 	
              9.4.3

            	
              change
                the meaning of the expression "Majority
                Banks";
                nor

            

    

     

    
      	 	
              9.4.4

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

            

    

     

    
      	 	
              9.4.5

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

            

    

     

    
      	 	
              9.4.6

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

            

    

     

    
      	 	
              9.4.7

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

            

    

     

    
      	 	
              9.4.8

            	
              agree
                to amend this Clause 9.4; nor

            

    

     

    
      	 	
              9.4.9

            	
              agree
                to reduce the rate under the definitions of "Margin"
                "Commitment
                Commission"
                or "Default
                Rate".

            

    

     

    
      	 	
              9.5

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

            

    

     

    
      	 	
              9.6

            	
              Acknowledgement
                Each
                of the Finance Parties (other than the Agent) acknowledges that:-
                

            

    

     

    
      	 	
              9.6.1

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

            

    

     

     

     

    
      
        
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              9.6.2

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

            

    

     

    
      	 	
              9.6.3

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

            

    

     

    
      	 	
              9.6.4

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

            

    

     

    
      	 	
               

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

            

    

     

     

    
      	 	
              9.7

            	
              Limitations
                on responsibility The
                Agent shall have no responsibility to any of the Security Parties
                or to
                any of the other Finance Parties on account of:-
                

            

    

     

    
      	 	
              9.7.1

            	
              the
                failure of any of the Finance Parties or of any of the Security Parties
                to
                perform any of their respective obligations under the Security Documents;
                

            

    

     

    
      	 	
              9.7.2

            	
              the
                financial condition of any of the Security Parties;
                

            

    

     

    
      	 	
              9.7.3

            	
              the
                completeness or accuracy of any statements, representations or warranties
                made in or pursuant to any of the Security Documents, or in or pursuant
                to
                any document delivered pursuant to or in connection with any of the
                Security Documents; 

            

    

     

    
      	 	
              9.7.4

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

            

    

     

     

     

     

    
      
        
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              9.8

            	
              The
                Agent's rights The
                Agent may:-

            

    

     

    
      	 	
              9.8.1

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

            

    

     

    
      	 	
              9.8.2

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

            

    

     

    
      	 	
              9.8.3

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

            

    

     

    
      	 	
              9.8.4

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

            

    

     

    
      	 	
              9.8.5

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

            

    

     

    
      	 	
              9.8.6

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

            

    

     

    
      	 	
              9.9

            	
              The
                Agent's duties The
                Agent shall:-

            

    

     

    
      	 	
              9.9.1

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

            

    

     

     

     

     

    
      
        
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              9.9.2

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

            

    

     

    
      	 	
              9.10

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

            

    

     

    
      	 	
              9.11

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

            

    

     

    
      	 	
              9.12

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

            

    

     

    
      	 	
              9.12.1

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

            

    

     

    
      	 	
              9.12.2

            	
              all
                liabilities, damages, costs and claims sustained or incurred by the
                Agent
                in connection with the Security Documents, or the performance of
                its
                duties and obligations, or the exercise of its rights, powers, discretions
                or remedies under or pursuant to any of the Security Documents; or
                in
                connection with any action taken or omitted by the Agent under or
                pursuant
                to any of the Security Documents, unless in any case those liabilities,
                damages, costs or claims arise solely from the Agent's wilful misconduct
                or gross negligence.

            

    

     

    
      	 	
              9.13

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

            

    

     

     

     

     

    
      
        
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              9.14

            	
              Distribution
                of payments The
                Agent shall pay promptly to the order of each of the Banks that Bank's
                Proportionate Share and provided that a Future Swap Provider had
                entered
                into a Subordination Agreement to a Future Swap Provider its share
                of
                every sum of money received by the Agent pursuant to the Security
                Documents (with the exception of any amounts payable pursuant to
                Clause 7
                and any amounts which, by the terms of the Security Documents, are
                paid to
                the Agent for the account of the Agent alone or specifically for
                the
                account of one or more of the Finance Parties) and until so paid
                such
                amount shall be held by the Agent on trust absolutely for that Finance
                Party.

            

    

     

    
      	 	
              9.15

            	
              Reimbursement
                The
                Agent shall have no liability to pay any sum to another Party until
                it has
                itself received payment of that sum. If, however, the Agent does
                pay any
                sum to a Party on account of any amount prospectively due to it pursuant
                to Clause 9.14 or otherwise before it has itself received payment of
                that amount, and the Agent does not in fact receive payment within
                five
                Business Days after the date on which that payment was required to
                be made
                by the terms of the Security Documents, the recipient will, on demand
                by
                the Agent, refund to the Agent an amount equal to the amount received
                by
                it, together with an amount sufficient to reimburse the Agent for
                the cost
                of money for funding the amount in question during the period beginning
                on
                the date on which that amount was required to be paid by the terms
                of the
                Security Documents and ending on the date on which the Agent receives
                reimbursement.

            

    

     

    
      	 	
              9.16

            	
              Redistribution
                of payments Unless
                otherwise agreed between the Finance Parties, if at any time a Finance
                Party receives or recovers by way of set-off, the exercise of any
                lien or
                otherwise other than from any assignee or transferee of or sub-participant
                in that Bank's Commitment, an amount greater than that Bank's
                Proportionate Share of any sum due from any of the Security Parties
                under
                the Security Documents or in the case of a Future Swap Provider (provided
                that such Future Swap Provider has entered into a Subordination Agreement)
                an amount greater than the amount outstanding and due to any Future
                Swap
                Provider under a Master Agreement (the amount of the excess being
                referred
                to in this Clause as the "Excess
                Amount")
                then:-

            

    

     

     

     

     

    
      
        
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              9.16.1

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

            

    

     

    
      	 	
              9.16.2

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

            

    

     

    
      	 	
              9.16.3

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

            

    

     

    
      	 	
               

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

            

    

     

     

    
      	 	
              9.17

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

            

    

     

    
      
        
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              9.18

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

            

    

     

    
      	 	
              9.19

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

            

    

     

    
      	 	
              9.20

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

            

    

     

    
      	 	
              9.21

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

            

    

     

    
      	 	
              9.22

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

            

    

     

     

     

     

    
      
        
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              9.22.1

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

            

    

     

    
      	 	
              9.22.2

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

            

    

     

    
      	 	
              9.22.3

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

            

    

     

    
      	 	
              9.22.4

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

            

    

     

    
      	 	
              9.23

            	
              No
                fiduciary relationship Except
                as provided in Clauses 9.3 and 9.14, the Agent shall not have any
                fiduciary relationship with or be deemed to be a trustee of or for
                any
                other Finance Party and nothing contained in any of the Security
                Documents
                shall constitute a partnership between any two or more Banks or between
                the Agent and any other Finance
                Party.

            

    

     

    
      	 	
              9.24

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

            

    

     

    
      	 	
              9.25

            	
              The
                Agent as security trustee
                Unless the context otherwise requires, the expression "the
                Agent"
                when used in the Security Documents includes the Agent acting in
                its
                capacities both as agent and security
                trustee.

            

    

     

    
      	 	
              9.26

            	
              Notwithstanding
                the provisions of Clauses 9.1 and 9.2 the Agent shall not carry out
                any
                action or execute any document on behalf of the Banks pursuant to
                its
                rights and powers under the Security Documents until such time as
                the
                Majority Banks have authorised it to do so and each Bank has
                either:

            

    

     

     

     

     

    
      
        
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              (i)

            	
              authorised
                the Agent to take such action or execute such document on its behalf
                or
                

            

    

     

    
      	 	
              (ii)

            	
              taken
                such action as is necessary to execute any such document.
                

            

    

     

    
      	 	
               

            	
              Each
                of the Banks undertakes to the Agent that it will either grant such
                authority or execute such documents within three (3) Business Days
                of the
                Agent notifying the Banks that the Majority Banks have given such
                authority to the Agent. If such authorisation or execution have not
                been
                carried out within such three (3) Banking Days period the Agent shall
                be
                entitled to carry out any action or execute any document on behalf
                of
                those of the Banks that have complied with the provisions of (i)
                or (ii)
                above only, pursuant to its rights and powers under the Security
                Documents. For the avoidance of doubt as between the Borrower, the
                Agent
                and the Banks the Borrower shall not be concerned with the Agent's
                authority to act under the provisions of this Clause
                9

            

    

     

    

    
      	10  	
              Covenants

            

    

     

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

     

    
      	 	
              10.1

            	
              Negative
                covenants 

            

    

     

    The
      Borrower will not:-

     

    
      	 	
              10.1.1

            	
              no
                third party rights without
                the Majority Banks' prior written consent, create or permit to arise
                or
                continue and procure that the Owners do not consent, create, or permit
                to
                arise or continue any Encumbrance on or over all or any part of the
                Vessels or their Earnings or Insurances or the Charters except for
                Permitted Liens; nor

            

    

     

    
      	 	
              10.1.2

            	
              no
                other business
                materially change the nature of its business as carried on at the
                Execution Date and shall procure that there is no material change
                in the
                nature of the business of the Borrower Group as a whole from that
                advised
                to the Agent of the date of this Agreement;
                nor

            

    

     

     

     

     

    
      
        
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              10.1.3

            	
              merger
                or amalgamation
                without the prior written consent of the Majority Banks, permit any
                merger
                or amalgamation, save with another member of the Borrower Group where
                the
                Borrower is to be the only surviving entity;
                nor

            

    

     

    
      	 	
              10.1.4

            	
              no
                change in management
                permit anyone other than the Managers or a subsidiary of Teekay Shipping
                Corporation, the Borrower or a Subsidiary of the Borrower to be appointed
                as commercial or technical managers of the Vessels;
                nor

            

    

     

    
      	 	
              10.1.5

            	
              no
                dealings with a Master Agreement
                assign, novate or encumber or in any other way transfer any of its
                rights
                or obligations under a Master
                Agreement.

            

    

     

    
      	 	
              10.2

            	
              Positive
                covenants

            

     

    
      	 	
              10.2.1

            	
              Other
                information The
                Borrower will promptly supply to the Agent such information and
                explanations as the Majority Banks may from time to time reasonably
                require in connection with the operation of the
                Vessels.

            

    

     

    
      	 	
              10.2.2

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

            

    

     

    
      	 	
              10.2.3 

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

            

    

     

     

     

     

    
      
        
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              10.2.4 

            	
              Corporate
                Existence
                Save as permitted by Clause 10.1.3, the Borrower shall ensure that
                throughout the Facility Period each of the Security Parties shall
                (i)
                remain duly formed and validly existing under the laws of its respective
                jurisdiction of incorporation (ii) remain authorised to do business
                in the
                jurisdiction in which it transacts its business (iii) continue to
                have the
                power to carry on its business as it is now being conducted and to
                enter
                into and perform its obligations under the Security Documents to
                which it
                is a party and (iv) continue to comply with all applicable laws,
                statutory, regulatory and other requirements relative to its business,
                where a failure so to comply could reasonably be expected to have
                a
                Material Adverse Effect.

            

    

      

    
      	 	
              10.2.5

            	
              Registration
                of Vessels
                The Borrower undertakes to procure that the Owners shall maintain
                the
                registration of the Vessels under the flag indicated in Schedule
                2 (or a
                Pre-Approved Flag or such other flag as the Majority Banks may approve
                in
                writing) for the duration of the Facility Period.
                

            

    

     

    
      	 	
              10.2.6 

            	
              Evidence
                of current COFR
                The Borrower will from time to time on the request of the Agent provide
                the Agent with such evidence as the Agent may reasonably require
                that each
                Vessel has a valid and current Certificate of Financial Responsibility
                pursuant to the United States Oil Pollution Act
                1990.

            

    

     

    
      	 	
              10.2.7

            	
              ISM
                Code compliance
                The Borrower will and will procure that the relevant Owner
                will:-

            

    

     

    
      	 	
              (a) 

            	
              procure
                that each of the Vessels remains for the duration of the Facility
                Period
                subject to a SMS;

            

    

     

    
      	 	
              (b) 

            	
              maintain
                a valid and current SMC for each of the Vessels throughout the Facility
                Period;

            

    

     

    
      	 	
              (c) 

            	
              procure
                that each Company maintains a valid and current DOC throughout the
                Facility Period;

            

    

     

     

     

     

    
      
        
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              (d) 

            	
              immediately
                notify the Agent in writing of any withdrawal, suspension, cancellation
                or
                modification of the SMC of any Vessel or of the DOC of any Company;
                and

            

    

     

    
      	 	
              (e) 

            	
              not
                without the prior written consent of the Agent (which will not be
                unreasonably withheld) change the identity of any Company to any
                company
                which is not a Subsidiary of either the Borrower or Teekay Shipping
                Corporation.

            

    

     

    
      	 	
              10.2.8 

            	
              ISPS
                Code compliance
                The Borrower will and will procure that the relevant Owner
                will:-

            

    

     

    
      	 	
              (a) 

            	
              procure
                that each of the Vessels maintains for the duration of the Facility
                Period
                a valid International Ship Security
                Certificate;

            

    

     

    
      	 	
              (b) 

            	
              procure
                that each of the Vessels' security system and associated security
                equipment complies in all material respects with the applicable
                requirements of Chapter XI-2 of SOLAS and Part A of the ISPS Code;
                and

            

    

     

    
      	 	
              (c) 

            	
              procure
                that an approved ship security plan is in
                place.

            

    

     

    
      	 	
              10.2.9 

            	
              Classification
                The Borrower shall procure that the Owners shall ensure that each
                Vessel
                maintains the highest classification required for the purpose of
                the
                relevant trade of such Vessel which shall be with a Pre-Approved
                Classification Society or such other society as may be acceptable
                to the
                Agent, in each case, free from any overdue recommendations and conditions
                affecting that Vessel’s
                class.

            

    

     

    
      	 	
              10.2.10 

            	
              Master
                Agreements The
                Borrower or any of its Subsidiaries may enter into an ISDA Master
                Agreement or similar arrangement for a notional amount not exceeding
                the
                Facility Outstandings as applicable from time to time and that ISDA
                Master
                Agreement may be designated by the Borrower as a Master Agreement
                for the
                purposes of this Facility and secured by the Security Documents provided
                that the relevant Future Swap Provider enters into a Subordination
                Agreement.

            

    

     

     

     

     

    
      
        
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              10.2.11

            	
              Compliance
                with Applicable Laws
                The Borrower shall comply with all applicable laws to which it may
                be
                subject if a failure to do the same may have a Material Adverse
                Effect.

            

    

     

    
      	 	
              10.2.12

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

            

    

     

    
      	 	
              10.2.13 

            	
              Information
                re Charters
                The Borrower will promptly notify the Agent
                of:

            

    

     

    
      	 	
              (i) 

            	
              any
                termination, purported termination or threat by the Charterers to
                terminate either of the Charters;
                or

            

    

     

    
      	 	
              (ii) 

            	
              any
                circumstances where a Vessel is off-hire for a period in excess of
                45
                consecutive days; or

            

    

     

    
      	 	
              (iii) 

            	
              any
                failure of a Charterer to pay hire when due or within 10 Business
                Days of
                the due date; or

            

    

     

    
      	 	
              (iv) 

            	
              if
                a Charterer shall, on three (3) consecutive occasions, pay hire at
                a rate
                that represents a reduction of twenty five per centum (25%) or more
                on the
                full rate of hire.

            

    

     

    
      	 	
              10.2.14 

            	
              Financial
                covenants of the Borrower
                Throughout the Facility Period the Borrower
                shall:-

            

     

    
      	 	
              (i) 

            	
              maintain
                an aggregate to Free Liquidity and undrawn committed revolving credit
                lines available to the Borrower and/or its Subsidiaries (excluding
                undrawn
                committed revolving credit lines with less than six (6) months to
                maturity) of not less than thirty five million Dollars ($35,000,000);
                and

            

    

     

    
      	 	
              (ii) 

            	
              maintain
                a Tangible Net Worth of at least four hundred million Dollars
                ($400,000,000).

            

    

     

     

    
      	 	
              10.2.15

            	
              Financial
                statements The
                Borrower will (i) deliver to the Agent without request copies of
                its
                accounts for each financial period ending during the Facility Period,
                containing (amongst other things) the Borrower's consolidated profit
                and
                loss account for, and balance sheet at the end of, each such financial
                period, prepared in accordance with GAAP and, in the case of the
                annual
                financial statements, audited by a firm of chartered accountants
                (or
                equivalent) acceptable to the
                Agent:

            

    

     

     

     

     

    
      
        
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              (a)

            	
              in
                the case of annual financial statements within one hundred and twenty
                (120) days of the end of the financial year to which they relate
                together
                with a compliance certificate in the form set out in Schedule 7;
                and

            

    

     

    
      	 	
              (b)

            	
              in
                the case of quarterly financial statements within ninety (90) days
                of the
                end of the financial quarter to which they relate
                

            

    

     

    
      	 	
               

            	
              
                together
                  with a compliance certificate in the form set out in Schedule 7
                  and such
                  financial statements shall accurately and fairly represent the
                  financial
                  condition of the Borrower Group. Such financial statements may
                  be provided
                  in electronic form at the Borrower's
                  option.

              

            

    

     

    
      	 	
              10.2.16

            	
              Further
                financial information
                The Borrower shall provide such further financial or other information
                as
                the Agent may reasonably request.

            

    

     

    
      	 	
              10.2.17

            	
              Inspection
                of Property
                The Borrower will, after the occurrence and during the continuance
                of an
                Event of Default or a Potential Event of Default, permit the Agent
                to
                inspect any property owned by it on reasonable notice from the
                Agent.

            

    

     

    
      	 	
              10.2.18

            	
              Notification
                The Borrower will notify the Agent in writing of any Proceedings
                brought
                against it or its Subsidiaries where the same may, if adversely
                determined, have a Material Adverse
                Effect.

            

    

     

    
      	 	
              10.2.19

            	
              Environmental
                Laws The
                Borrower shall ensure that the Owners comply in all material respects
                with
                any applicable Environmental Laws.

            

    

     

     

     

     

    
      
        
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              10.2.20

            	
              Borrower
                Listing The
                Borrower shall remain listed on a recognised stock exchange throughout
                the
                Facility Period.

            

    

     

    
      	 	
              10.2.21

            	
              Insurances
                The
                Borrower shall procure that the Owners comply with the requirements
                to
                insure and maintain the Vessels set out in the respective Deeds of
                Assignment.

            

    

     

    
      	 	
              10.2.22

            	
              Payment
                of Taxes
                The Borrower shall pay, or shall procure that the Owners shall pay,
                all
                Taxes and other obligations due in respect of the Vessels or the
                Indebtedness.

            

    

     

    
      	11  	
              Earnings

            

    

     

    
      	 	
              11.1

            	
              Remittance
                of Earnings Immediately
                upon the occurrence of an Event of Default which is continued unremedied
                or unwaived, the Borrower shall procure that all Earnings and any
                Requisition Compensation are paid to the Earnings Account (to be
                opened in
                the joint names of the Owners with the Account Holder following the
                occurrence of an Event of Default) or to such other account(s) as
                the
                Agent shall from time to time specify by notice in writing to the
                Borrower.

            

    

     

    
      	 	
              11.2

            	
              Earnings
                Account The
                Borrower shall procure that following the occurrence of an Event
                of
                Default which is continued unremedied or unwaived, the Owners shall
                maintain the Earnings Account with the Earnings Account Holder for
                the
                duration of the remainder of the Facility Period free of Encumbrances
                and
                rights of set off other than those created by or under the Finance
                Documents. 

            

    

     

    
      	12  	
              Events Of Default

            

    

     

    
      	 	
              12.1

            	
              The
                Agent's rights If
                any of the events set out in Clause 12.2 occurs, the Agent may at
                its
                discretion (and, on the instructions of the Majority Banks,
                will):

            

    

     

    
      	 	
              12.1.1

            	
              by
                notice to the Borrower declare the Banks to be under no further obligation
                to the Borrower under or pursuant to this Agreement and may (and,
                on the
                instructions of the Majority Banks, will) declare all or any part
                of the
                Indebtedness (including such unpaid interest as shall have accrued
                and any
                Break Costs incurred by the Finance Parties) to be immediately payable,
                whereupon the Indebtedness (or the part of the Indebtedness referred
                to in
                the Agent's notice) shall immediately become due and payable without
                any
                further demand or notice of any kind;
                and/or

            

    

     

     

     

     

    
      
        
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              12.1.2

            	
              declare
                that any undrawn portion of the Facility shall be cancelled, whereupon
                the
                same shall be cancelled and the corresponding Commitment of each
                Bank
                shall be reduced to zero; and/or

            

    

     

    
      	 	
              
                12.1.3

              

            	
              
                exercise
                  any rights and remedies in existence or arising under the Security
                  Documents.

              

            

    

     

    
      	 	
              12.2

            	
              Events
                of Default The
                events referred to in Clause 12.1
                are:-

            

    

     

    
      	 	
              12.2.1

            	
              payment
                default if
                

            

    

     

    
      	 	
              (a)

            	
              the
                Borrower defaults in the payment of any
                part of the Indebtedness when due PROVIDED ALWAYS that if the Borrower
                can
                demonstrate to the reasonable satisfaction of the Agent that they
                have
                given all necessary instructions to effect payment and the non-receipt
                thereof is attributable to an error in the banking system, such Event
                of
                Default shall only occur five (5) Business Days after such payment
                fell
                due; or

            

    

     

    
      	 	
              (b)

            	
              A
                Security Party fails to pay any other amount due from it under a
                Security
                Document and such failure continues unremedied for five (5) Business
                Days or, in the case of sums payable on demand, eight (8) Business
                Days,
                after such demand has been duly made on the relevant Security Party;
                or

            

    

     

     

    
      	 	
              12.2.2

            	
              other
                default if
                any of the Security Parties fails to observe or perform any of the
                covenants, conditions, undertakings, agreements or obligations on
                its part
                contained in any of the Security Documents or shall in any other
                way be in
                breach of or do or cause to be done any act repudiating or evidencing
                an
                intention to repudiate any of the Security Documents and such default
                (if
                in the reasonable opinion of the Majority Banks capable of remedy)
                is not
                remedied within twenty one (21) days after notice of the default
                has been
                given to the Borrower PROVIDED
                ALWAYS
                that any breach of (i) a financial covenant set out in Clause 10.2.17
                or
                (ii) the change of management covenant set out in Clause 10.1.4 shall
                constitute an immediate Event of Default; or

            

    

     

     

     

     

    
      
        
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              12.2.3

            	
              misrepresentation
                or breach of warranty if
                any representation, warranty or statement made, deemed to be made,
                or
                repeated under any of the Security Documents or in any accounts,
                certificate, notice instrument, written statement or opinion delivered
                by
                a Security Party under or in connection with any Security Document
                is
                incorrect or misleading in any material respect when made, deemed
                to be
                made or repeated and gives rise to a Material Adverse Effect;
                or

            

    

     

    
      	 	
              12.2.4

            	
              execution
                if
                a distress or execution or other process of a court or authority
                is levied
                on any of the property of any of the Security Parties before or after
                final judgment or by order of any competent court or authority for
                an
                amount in excess of ten million Dollars ($10,000,000) (in the case
                of the
                Owners), twenty five million Dollars ($25,000,000) (in the case of
                the
                Corporate Guarantor) or fifty million Dollars ($50,000,000) (in the
                case
                of the Borrower) or its equivalent in any other currency and is not
                satisfied or stayed (with a view to being contested in good faith)
                within
                thirty days of levy or any other applicable cure period (if longer);
                or

            

    

     

    
      	 	
              12.2.5

            	
              insolvency
                events if
                any of the Security Parties or their
                Subsidiaries:-

            

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

            	
              makes
                a general assignment for the benefit of creditors;
                or

            

    

     

    
      	 	
              (d)

            	
              ceases
                trading or threatens to cease trading;
                or

            

    

     

     

     

     

    
      
        
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              (e)

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

            

    

     

    
      	 	
              12.2.6

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

            

    

     

    
      	 	
              12.2.7

            	
              impossibility
                or illegality unless
                covered by Clause 15.7, if any event occurs which would, or would
                with the
                passage of time, render performance of any of the Security Documents
                impossible, unlawful or unenforceable by the Banks or the Agent and
                such
                illegality is not remedied or mitigated to the satisfaction of the
                Agent
                within 30 days after it has given notice thereof to the relevant
                Security
                Party; or

            

    

     

    
      	 	
              12.2.8

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

            

    

     

    
      	 	
              12.2.9

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

            

    

     

     

     

     

     

    
      
        
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              12.2.10

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

            

    

     

    
      	 	
              12.2.11

            	
              acceleration
                of other indebtedness if
                any other indebtedness or obligation for borrowed money of any of
                the
                Security Parties becomes due prior to its stated maturity by reason
                of
                default on the part of that Security Party, or is not repaid or satisfied
                on the due date for its repayment (or within any applicable grace
                period)
                or any such other loan, guarantee or indebtedness becomes enforceable
                save
                for amounts of less than ten million Dollars ($10,000,000) (in the
                case of
                the Owners), twenty five million Dollars ($25,000,000) (in the case
                of the
                Corporate Guarantor) or fifty million Dollars ($50,000,000) (in the
                case
                of the Borrower) in aggregate, or its equivalent in any other currency;
                or

            

    

     

    
      	 	
              12.2.12

            	
              reduction
                of capital If
                any of the Security Parties reduces its authorised or issued or subscribed
                capital; or

            

    

     

    
      	 	
              12.2.13

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

            

    

     

    
      	 	
              12.2.14

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

            

    

     

    
      	 	
              12.2.15

            	
              notice
                of termination if
                the Corporate Guarantor gives notice to the Agent to determine its
                obligations under its Corporate Guarantee or either Owner gives notice
                to
                the Agent to determine its obligations under the Owners Guarantee;
                or

            

    

     

     

     

     

     

    
      
        
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              12.2.16

            	
              material
                adverse change etc. if
                at any time there shall occur a change in the business or operations
                of a
                Security Party or a change in the financial condition of any Security
                Party which, in the reasonable opinion of the Majority Banks, materially
                impairs such Security Party's ability to discharge its obligations
                under
                the Security Documents to which it is a party in the manner provided
                therein and such change, if capable of remedy, is not so remedied
                within
                15 Business Days of the delivery of a notice confirming such change
                by the
                Agent to the relevant Security Party; or

            

    

     

     

    
      	 	
              12.2.17

            	
              final
                judgements
                if
                any of the Security Parties fails to comply with any non appealable
                court
                order or fails to pay a final unappealable judgment against it, in
                either
                case, in excess of ten million Dollars ($10,000,000) (in the case
                of the
                Owners), twenty five million Dollars ($25,000,000) in the case of
                the
                Corporate Guarantor or fifty million Dollars ($50,000,000) (in the
                case of
                the Borrower) which remains unsettled for fourteen (14) days;
                or

            

    

     

    
      	 	
              12.2.18

            	
              loss
                of stock market listing
                if
                the Borrower ceases to be listed on a recognised stock exchange;
                or

            

    

     

    
      	 	
              12.2.19

            	
              similar
                event any
                event occurs which, under the laws of any jurisdiction, has a similar
                or
                analogous effect to any of those events mentioned in Clauses 12.2.4,
                12.2.5 and 12.2.6; or

            

    

     

    
      	 	
              12.2.20

            	
              environmental
                matters

            

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

     

     

     

     

    
      
        
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              12.2.21

            	
              repudiation
                any Security Party repudiates any Security Document to which it is
                a party
                or does or causes to be done any act or thing evidencing an intention
                to
                repudiate any such Security Documents;
                or

            

    

     

    
      	 	
              12.2.22

            	
              Change
                of Control a
                Change of Control occurs in relation to any of the Owners, the Corporate
                Guarantor or the General Partner;
                or

            

     

    
      	 	
              12.2.23

            	
              termination
                of a Charter
                if
                (a) either of the Owners is in material breach of the Charter relative
                to
                its Vessel such that a right of the Charterer to terminate or treat
                as
                repudiated that Charter has arisen or (b) either of the Charters
                is
                terminated by the Charterers (save where a Charterer has exercised
                its
                contractual rights to early termination under a Charter and made
                any
                corresponding payments); or

            

    

     

    
      	 	
              12.2.24

            	
              insurances
                and class
                if
                the Owners fail to comply with the Insurance obligations outlined
                in the
                relevant Deed of Assignment or a Vessel has its classification withdrawn
                by the relevant Classification Society PROVIDED THAT if such breach
                is (in
                the opinion of the Agent in its absolute discretion) capable of remedy
                such Event of Default shall only occur if the breach is not remedied
                to
                the satisfaction of the Agent within twenty one (21)
                days.

            

    

     

    
      	 	
              12.3

            	
              Events
                of Default in the Mortgage
                In
                the event of there being any conflict between the Events of Default
                listed
                in this Clause 12 and the events listed in Clause 5.1.1 of the Mortgages
                the Events of Default listed in this Clause 12 shall
                prevail.

            

    

     

     

    
      	13  	
              Application
                of Monies

            

    

     

    
      	 	
              13.1

            	
              Master
                Agreement rights The
                rights conferred on a Future Swap Provider by this Clause 13 shall
                be in
                addition to, and without prejudice to or limitation of, the rights
                of
                netting and set off conferred on such Future Swap Provider by the
                relevant
                Master Agreement. 

            

    

     

    
      	 	
              13.2

            	
              Application
                Whilst
                an Event of Default is continuing unremedied or unwaived, the Borrower
                irrevocably authorises the Agent to apply all sums which the Agent
                may
                receive:-

            

    

     

    
      
        
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              13.2.1 

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

            

    

     

    
      	 	
              13.2.2

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

            

    

     

    
      	 	
              13.2.3

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

            

    

     

    
      	 	
               

            	
              in
                or towards satisfaction, or by way of retention on account, of the
                Indebtedness, in such manner as the Agent may in its discretion determine
                PROVIDED THAT any part of the Indebtedness arising out of a Master
                Agreement shall be satisfied only after every other part of the
                Indebtedness for the time being due and payable has been satisfied
                in
                full.

            

    

     

     

    
      	14  	
              Assignment and
                Sub-Participation

            

    

     

    
      	 	
              14.1

            	
              Right
                to assign Subject
                always to the provisions of clause 14.7 each of the Banks may assign
                or
                transfer to any other bank or financial institution all or any of
                its
                rights under or pursuant to the Security Documents or assign or grant
                sub-participations in all or any part of its Commitment provided
                that each
                such assignment, transfer or sub-participation shall (unless the
                assignment transfer or sub-participation is to another Bank or an
                affiliate of a Bank) be in a minimum amount of five million Dollars
                ($5,000,000) and with the prior written consent of the Borrower (which
                shall not be unreasonably withheld and which shall be deemed given
                if no
                response shall be received within ten (10) Business Days of a request
                or
                at any time whilst an Event of Default is in
                existence).

            

    

     

    
      	 	
              14.2

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

            

    

     

    
      
        
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              14.3

            	
              Rights
                of assignee Any
                assignee or transferee of a Bank shall (unless limited by the express
                terms of the assignment or transfer) take the full benefit of every
                provision of the Security Documents benefiting that Bank.
                

            

    

     

    
      	 	
              14.4

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

            

    

     

    
      	 	
              14.4.1

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

            

    

     

    
      	 	
              14.4.2

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

            

    

     

    
      	 	
              14.4.3

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

            

    

     

    
      	 	
              14.4.4

            	
              the
                Transferee shall pay to the Agent a transfer fee of four thousand
                Dollars
                ($4,000). Subject to the provision of Clause 17.3, any expense incurred
                in
                connection with any Spanish registration requirements resulting from
                any
                such assignment or transfer, including but not limited to any registration
                requirements in respect of the Mortgages and any legal fees, notarial
                fees
                and other registration taxes and fees) shall be for the cost of the
                Transferee.

            

    

     

    
      
        
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              14.5

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

            

    

     

    
      	 	
              14.6

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

            

    

     

    
      	 	
              14.7

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

            

     

    
      	 	
              14.7.1

            	
              Deductions
                and Increased costs. If,
                by reason of circumstances already existing at the transfer date,
                the
                Borrower would be obliged to make a payment to the KfW Subsidiary
                under
                Clauses 15.2, 15.3 or 15.6, it need pay the KfW Subsidary only such
                an
                amount as it would have been obliged to pay KfW if the transfer had
                not
                occurred.

            

    

     

    
      
        
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              14.7.2

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

            

    

     

    
      	 	
               

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

            

    

     

    
      	 	
              14.8

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

            

    

     

    
      	 	
              14.9

            	
              Mitigation
                If
                a transfer is to take place under Clause 14.7 then, without in any
                way
                limiting the rights of KfW under Clauses 15.2, 15.3 or 15.6, KfW
                shall
                take reasonable steps to mitigate any circumstances which arise and
                which
                would result in any amount becoming payable under or pursuant to
                Clauses
                15.2, 15.3 or 15.6 and it shall co-operate in completing any procedural
                formalities necessary for the Borrower to obtain authorisation to
                make any
                payment under Clauses 15.2, 15.3 and 15.6 without a deduction or
                withholding.

            

    

     

    
      	15  	
              Payments,
                Mandatory Prepayment, Reserve Requirements and
                Illegality

            

    

     

    
      	 	
              15.1

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

            

    

     

    
      
        
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              15.2

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

            

    

     

    
      	 	
              15.3

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

            

    

     

    
      	 	
              15.4

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

            

    

     

    
      
        
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              15.5

            	
              Adjustment
                of due dates If
                any payment to be made under any of the Security Documents, other
                than a
                payment of interest on the Facility (to which Clause 6.5 applies),
                shall
                be due on a day which is not a Business Day, that payment shall be
                made on
                the next succeeding Business Day (unless the next succeeding Business
                Day
                falls in the next calendar month in which event the payment shall
                be made
                on the next preceding Business Day). Any such variation of time shall
                be
                taken into account in computing any interest in respect of that
                payment.

            

    

     

    
      	 	
              15.6

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

            

    

     

    
      	 	
              15.6.1

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

            

    

     

    
      	 	
              15.6.2

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

            

    

     

    
      	 	
              15.6.3

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

            

    

     

    
      	 	
              15.6.4

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

            

    

     

    
      
        
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              15.6.5

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

            

    

     

    
      	 	
               

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

            

    

     

     

    
      	 	
              15.7

            	
              Illegality
                and impracticality Notwithstanding
                anything contained in the Security Documents, the obligations of
                a Bank to
                advance or maintain its Commitment shall terminate in the event that
                a
                change in any law or in the interpretation of any law by any authority
                charged with its administration shall make it unlawful for that Bank
                to
                advance or maintain its Commitment. In such event the Bank affected
                shall
                notify the Agent and the Agent shall, by written notice to the Borrower,
                declare that Bank's obligations to be immediately terminated. If
                all or
                any part of the Facility shall have been advanced by the Banks to
                the
                Borrower the portion of the Indebtedness (including all accrued interest)
                advanced by the Bank so affected shall be prepaid within thirty days
                from
                the date of such notice, or sooner if illegality is determined. Clause
                5.4
                shall apply to that prepayment if it is made on a day other than
                the last
                day of an Interest Period. During that period, the affected Bank
                shall
                negotiate in good faith with the Borrower to find an alternative
                method or
                lending base in order to maintain the
                Facility.

            

    

     

    
      
        
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              15.8

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

            

    

     

    
      	 	
              15.8.1

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

            

    

     

    
      	 	
              15.8.2

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

            

    

     

    
      	 	
              15.8.3

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

            

    

     

    
      	 	
               

            	
              If,
                within thirty days of the giving of the notice referred to in
                Clause 15.8.1, the Borrower and the Agent fail to agree in writing on
                a substitute basis for such Bank’s Commitment the Borrower will
                immediately prepay the amount of such Bank’s Commitment and the Maximum
                Facility Amount will automatically decrease by the amount of such
                Commitment and such decrease shall not be reversed. Clause 5.4 shall
                apply
                to that prepayment if it is made on a day other than the last day
                of an
                Interest Period.

            

    

     

     

    
      	 	
              15.9

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

            

    

     

    
      
        
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      	16  	
              Communications

            

    

     

    
      	 	
              16.1

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

            

    

     

    
      	 	
              16.1.1

            	
              in
                the case of any of the Finance Parties to the Agent at its address
                at the
                head of this Agreement (fax no:+44 20 7767 7324) marked for the attention
                of: the Agency Department; and 

            

    

     

    
      	 	
              16.1.2

            	
              in
                the case of the Borrower to the Communications
                Address;

            

    

     

    
      	 	
               

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

            

    

     

    
      	 	
              16.2

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

            

    

     

    
      	 	
              16.2.1

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

            

    

     

    
      
        
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              16.2.2

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

            

    

     

    
      	 	
              16.2.3

            	
              if
                posted, at 9.00 a.m. on the fifth Business Day after posting by prepaid
                first class post. PROVIDED ALWAYS that Communications to the Agent
                and (to
                the extent that they relate to the matters specified in Clause 9.4
                only)
                the Banks shall be effective only upon
                receipt.

            

    

     

    
      	 	
               

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

            

    

     

    
      	17  	
              General
                Indemnities

            

    

     

    
      	 	
              17.1

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

            

    

     

    
      	 	
              17.2

            	
              Costs
                and expenses The
                Borrower will, within fourteen (14) days of the Agent's written demand,
                reimburse the Agent (on behalf of each of the Finance Parties) for
                all
                reasonable out of pocket expenses including internal and external
                legal
                costs (including stamp duty, Value Added Tax or any similar or replacement
                tax if applicable) of and incidental to:-

            

    

     

    
      	 	
              17.2.1

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

            

    

     

    
      	 	
              17.2.2

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

            

    

     

    
      
        
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              17.2.3

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

            

    

     

    
      	 	
              17.2.4

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

            

    

     

    
      	 	
              17.3

            	
              Events
                of Default The
                Borrower shall indemnify the Finance Parties from time to time on
                demand
                against all losses and costs incurred or sustained by any Finance
                Party as
                a consequence of any Event of Default, including (without limitation)
                any
                Break Costs and any costs of assignment of transfer (as envisaged
                by
                Clause 14.4.4) following and during the continuance of an Event of
                Default. 

            

    

     

    
      	 	
              17.4

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

            

    

     

    
      	 	
              17.5

            	
              Protection
                and enforcement The
                Borrower shall indemnify the Finance Parties from time to time on
                demand
                against all losses, costs and liabilities which any Finance Party
                may from
                time to time sustain, incur or become liable for in or about the
                protection, maintenance or enforcement of the rights conferred on
                the
                Finance Parties by the Security Documents or in or about the exercise
                or
                purported exercise by the Finance Parties of any of the rights, powers,
                discretions or remedies vested in them under or arising out of the
                Security Documents, including (without limitation) any losses, costs
                and
                liabilities which any Finance Party may from time to time sustain,
                incur
                or become liable for by reason of any Finance Party being mortgagees
                of
                any Vessel, assignees of any Mortgage and/or a lender to the Borrower,
                or
                by reason of any Finance Party being deemed by any court or authority
                to
                be an operator or controller, or in any way concerned in the operation
                or
                control, of any Vessel. No such indemnity will be given to a Finance
                Party
                where any such loss, cost or liability has occurred due to gross
                negligence or wilful misconduct on the part of that Finance Party;
                however
                this shall not affect the right of any other Finance Party to receive
                any
                such indemnity.

            

    

     

    
      
        
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              17.6

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

            

    

     

    
      	 	
              17.7

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

            

    

     

    
      	18  	
              Miscellaneous

            

    

     

    
      	 	
              18.1

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

            

    

     

    
      	 	
              18.2

            	
              No
                oral variations No
                variation or amendment of any of the Security Documents shall be
                valid
                unless in writing and signed on behalf of the Agent and the relevant
                Security Party.

            

    

     

    
      	 	
              18.3

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

            

    

     

    
      
        
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              18.4

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

            

    

     

    
      	 	
              18.5

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

            

    

     

    
      	 	
              18.6

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

            

    

     

    
      	 	
              18.7

            	
              Advisers
                The Borrower irrevocably authorises the Agent, at any time and from
                time
                to time during the Facility Period, to consult insurance advisers
                on any
                matters relating to the Insurances, including, without limitation,
                the
                collection of insurance claims, and from time to time to consult
                or retain
                advisers or consultants to monitor or advise on any other claims
                relating
                to the Vessels. The Borrower will provide such advisers and consultants
                with all information and documents which they may from time to time
                reasonably require and will reimburse the Agent on demand for all
                reasonable costs and expenses incurred by the Agent in connection
                with the
                consultation or retention of such advisers or
                consultants.

            

    

     

    
      
        
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              18.8

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

            

    

     

    
      	 	
              18.9

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

            

    

     

    
      	 	
              18.10

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

            

    

     

    
      	 	
              18.11

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

            

    

     

    
      	 	
              18.12

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

            

    

     

    
      
        
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              18.13

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

            

    

     

    
      	 	
              18.14

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

            

    

     

    
      	 	
              18.15

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

            

    

     

    
      	 	
              18.16

            	
              Subsequent
                Encumbrances If
                the Agent receives notice of any subsequent Encumbrance (other than
                any
                Encumbrance permitted by the terms of this Agreement) affecting any
                Vessel
                or all or any part of the Insurances, Earnings, Requisition Compensation
                or Charter Rights, the Agent may open a new account in its books
                for the
                Borrower. If the Agent does not open a new account, then (unless
                the
                Encumbrance is permitted by the terms of this Agreement or the Agent
                gives
                written notice to the contrary to the Borrower) as from the time
                of
                receipt by the Agent of notice of such subsequent Encumbrance, all
                payments made to the Agent shall be treated as having been credited
                to a
                new account of the Borrower and not as having been applied in reduction
                of
                the Indebtedness.

            

    

     

    
      
        
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              18.17

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

            

    

     

    
      	 	
              18.18

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

            

    

     

    
      	 	
              18.19

            	
              Survival
                of representations and warranties The
                representations and warranties on the part of the Borrower contained
                in
                this Agreement shall survive the execution of this Agreement and
                the
                advance of the Facility or any part thereof.

            

    

     

    
      	 	
              18.20

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

            

    

     

    
      	 	
              18.21

            	
              Third
                Party Rights
                Notwithstanding the provisions of the Contracts (Rights of Third
                Parties)
                Act 1999, no term of this Agreement is enforceable by a person who
                is not
                a party to it other than any Future Swap
                Provider.

            

    

     

    
      	19  	
              Law and Jurisdiction

            

    

     

    
      	 	
              19.1

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

            

    

     

    
      	 	
              19.2

            	
              Jurisdiction
                For
                the exclusive benefit of the Finance Parties, the parties to this
                Agreement irrevocably agree that the courts of England are to have
                jurisdiction to settle any disputes which may arise out of or in
                connection with this Agreement and that any Proceedings may be brought
                in
                those courts. The Borrower irrevocably waives any objection which
                it may
                now or in the future have to the laying of the venue of any Proceedings
                in
                any court referred to in this Clause, and any claim that those Proceedings
                have been brought in an inconvenient or inappropriate
                forum.

            

    

     

    
      
        
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              19.3

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

            

    

     

    
      	 	
              19.4

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

            

    

     

    
      	 	
              19.4.1

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

            

    

     

    
      	 	
              19.4.2 

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

            

    

     

     

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

     

     

     

     

     

    
      
        
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    SCHEDULE
      1

     

    The
      Banks, the Commitments and the Proportionate Shares

     

    
      	
              The
                Banks

            	
              The
                Commitments ($)

            	
              The
                Proportionate Shares (%)

            
	 	 	 
	
              ING
                Bank N.V., 

              London
                Branch 

              60
                London Wall

              London

              EC2M
                5TQ

              Fax
                no: +44 207 767 7252

              Attention:
                David Rolls

               

            	
              70,000,000

            	
              21.212%

            
	
              Alliance
                & Leicester

              Commercial
                Finance plc

              120
                New Cavendish Street

              London

              W1W
                6XX

              Fax
                no: + 44 (0) 161 953 3517 

              Attention:
                Head of Corporate

              Administration
                

               

            	
              30,000,000

            	
              9.091%

            
	
              Banco
                Bilbao Vizcaya 

              Argentaria
                S.A.

              Via
                de los Poblados s/n

              28033
                Madrid

              Spain

              Fax
                no: +34 91 374 4140

              Attention:
                Trinidad Bernad Oritz

               

            	
              30,000,000

            	
              9.091%

            
	
              Caja
                de Ahorros Y Monte de 

              Piedad
                de Madrid

              Paseo
                de la Castellana

              180
                4°
                Planta

              Madrid

              Spain

              Fax
                no: +3491 423 9727/28

              Attention:
                Martin Alonso Ana 

              Marie
                del Pozo

               

            	
              50,000,000

            	
              15.152%

            
	
              KfW
                

              Palmengartenstr.
                5-9

              D
                -
                60325 Frankfurt am Main

              Fax:
                +49-69 7431-3768

              Attention:
                Dr Marco Albers

               

            	
              50,000,000

            	
              15.152%

            

    

     

     

    
      
        
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              Landesbank
                Hessen-Thüringen Girozentrale (Helaba)

              420
                Fifth Avenue, 24th Fl.

              New
                York, NY 10018-2729

              Fax:
                +1 212 703 - 5256

              Attention:
                Ralf Goebel

              Gerhard
                Winklmeier

               

            	
              50,000,000

            	
              15.152%

            
	
              Lloyds
                TSB Bank plc

              25
                Gresham Street

              London

              EC2V
                7HN

              Fax
                no: +44 0207 356 2396

              Attention:
                Head of Portfolio

              Management

            	
              50,000,000

            	
              15.152%

            

    
      
        
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        79

        
          

        

      

      
        
        

      

    

    SCHEDULE
      2

     

    The
      Vessels

     

      

     

    

    
      	
              Owner 

            	
               Country of
                Incorporation

            	
               Vessel 

            	
               Flag

            
	
              Naviera Teekay

              Gas II S.L.

            	 Spain	 GALICIA SPIRIT	 Spain
	
              Naviera Teekay 

              Gas S.L. 

            	 Spain	 HISPANIA SPIRIT	 Spain

    

       

     

     

     

     

     

     

     

     

     

    
 

    
      
        
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    SCHEDULE
      3

     

    Reduction
      Schedule

     

    
      	
              Months
                after Execution Date

            	
              Scheduled
                Commitment 

              Reduction

            	
              Maximum
                Facility Amount

            
	
              0

            	 	
              US$330,000,000

            
	
              6

            	
              US$4,328,000

            	
              US$325,672,000

            
	
              12

            	
              US$4,459,000

            	
              US$321,213,000

            
	
              18

            	
              US$4,595,000

            	
              US$316,618,000

            
	
              24

            	
              US$4,735,000

            	
              US$311,883,000

            
	
              30

            	
              US$4,880,000

            	
              US$307,003,000

            
	
              36

            	
              US$5,029,000

            	
              US$301,974,000

            
	
              42

            	
              US$5,182,000

            	
              US$296,792,000

            
	
              48

            	
              US$5,340,000

            	
              US$291,452,000

            
	
              54

            	
              US$5,503,000

            	
              US$285,949,000

            
	
              60

            	
              US$5,670,000

            	
              US$280,279,000

            
	
              66

            	
              US$5,844,000

            	
              US$274,435,000

            
	
              72

            	
              US$6,022,000

            	
              US$268,413,000

            
	
              78

            	
              US$6,206,000

            	
              US$262,207,000

            
	
              84

            	
              US$6,395,000

            	
              US$255,812,000

            
	
              90

            	
              US$6,589,000

            	
              US$249,223,000

            
	
              96

            	
              US$6,791,000

            	
              US$242,432,000

            
	
              102

            	
              US$6,998,000

            	
              US$235,434,000

            
	
              108

            	
              US$7,212,000

            	
              US$228,222,000

            
	
              114

            	
              US$7,431,000

            	
              US$220,791,000

            
	
              120

            	
              US$7,658,000

            	
              US$213,133,000

            
	
              126

            	
              US$7,892,000

            	
              US$205,241,000

            
	
              132

            	
              US$8,132,000

            	
              US$197,109,000

            
	
              138

            	
              US$8,381,000

            	
              US$188,728,000

            
	
              144

            	
              US$8,636,000

            	
              US$180,092,000

            

    

     

     

     

    
 

    
      
        
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    SCHEDULE
      4

     

    Form
      of Transfer Certificate
      English Version

     

    To:
       ING
      Bank
      N.V. as agent (the "Agent")

    

    TRANSFER
      CERTIFICATE

     

    
      	This transfer certificate relates to
              a
              facility agreement (as the same may be from time to time amended, varied,
              novated or supplemented, the "Facility
              Agreement")
              dated 2006 whereby an initial reducing revolving credit facility of
              up to $330,000,000 was made available to Teekay LNG Partners L.P. as
              borrower by a group of banks on whose behalf the Agent acts as agent
              and
              security trustee.

    

     

    

    
      	1  	
              Terms
                defined in the Facility Agreement shall, subject to any contrary
                indication, have the same meanings herein. The terms "Bank" and
                "Transferee" are defined in the schedule to this transfer certificate
                .

            

    

    

    
      	2  	
              The
                Bank (i) confirms that the details in the Schedule hereto under the
                heading "Bank's
                Commitment"
                accurately summarises its Commitment in the Facility Agreement and
                (ii)
                requests the Transferee to accept and procure the transfer to the
                Transferee of the portion of such Commitment specified in the Schedule
                hereto by counter-signing and delivering the Transfer Certificate
                to the
                Agent at its address for the service of Communications specified
                in the
                Facility Agreement.

            

    

    

    
      	3  	
              The
                Transferee requests the Agent to accept this Transfer Certificate
                as being
                delivered to the Agent pursuant to and for the purposes of clause
                14.4 of
                the Facility Agreement so as to take effect in accordance with the
                terms
                thereof on the Transfer Date or on such later date as may be determined
                in
                accordance with the terms thereof.

            

    

    

    
      	4  	
              The
                Transferee confirms that it has received a copy of the Facility Agreement
                together with such other information as it has required in connection
                with
                this transaction and that it has not relied and will not in the future
                rely on the Bank or any other party to the Facility Agreement to
                check or
                enquire on its behalf into the legality, validity, effectiveness,
                adequacy, accuracy or completeness of any such information and further
                agrees that it has not relied and will not rely on the Bank or any
                other
                party to the Facility Agreement to access or keep under review on
                its
                behalf the financial condition, creditworthiness, condition, affairs,
                status or nature of the Borrower or any other party to the Facility
                Agreement.

            

    

     

     

     

     

     

     

    
      
        
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      	5  	
              Execution
                of this Transfer Certificate by the Transferee constitutes its
                representation to the Transferor and all other parties to the Facility
                Agreement that it has power to become a party to the Facility Agreement
                as
                a Bank on the terms herein and therein set out and has taken all
                steps to
                authorise execution and delivery of this Transfer Certificate.
                

            

    

    

    
      	6  	
              The
                Transferee undertakes with the Bank and each of the other parties
                to the
                Facility Agreement that it will perform in accordance with their
                terms all
                those obligations which by the terms of the Facility Agreement will
                be
                assumed by it after delivery of this Transfer Certificate to the
                Agent and
                satisfaction of the conditions (if any) subject to which the Transfer
                Certificate is expressed to take
                effect.

            

    

    

    
      	7  	
              The
                Bank makes no representation or warranty and assumes no responsibility
                with respect to the legality, validity, effectiveness, adequacy or
                enforceability of the Facility Agreement or any document relating
                thereto
                and assumes no responsibility for the financial condition of the
                Borrower
                or for the performance and observance by the Borrower of any of its
                obligations under the Facility Agreement or any document relating
                thereto
                and any and all such conditions and warranties, whether express or
                implied
                by law or otherwise, are hereby
                excluded.

            

    

    

    
      	8  	
              The
                Bank gives notice that nothing in this transfer certificate or in
                the
                Facility Agreement (or any document relating thereto) shall oblige
                the
                Bank to (i) accept a re-transfer from the Transferee of the whole
                or any
                part of its rights, benefits and/or obligations under the Facility
                Agreement transferred pursuant hereto or (ii) support any losses
                directly
                or indirectly sustained or incurred by the Transferee for any reason
                whatsoever including, without limitation, the non-performance by
                the
                Borrower or any other party to the Facility Agreement (or any document
                relating thereto) of its obligations under any such document. The
                Transferee acknowledges the absence of any such obligation as is
                referred
                to in (i) or (ii) above.

            

    

    

    
      	9  	
              This
                Transfer Certificate and the rights and obligations of the parties
                hereunder shall be governed by and interpreted in accordance with
                English
                law.

            

    

     

    
      
        
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    THE SCHEDULE

    

    
      	1  	
              Bank:

            

    

    

    
      	2  	
              Transferee:

            

    

    

    
      	3  	
              Transfer
                Date:

            

    

    

    
      	4  	
              Commitment1:                                            Portion
                Transferred

            

    

    

     

    
 

    
      	 [Transferor Bank]	  [Transferee
              Bank]
	 By:	  By:
	 Date:	  Date:
	 ING Bank N.V.	 

    

       

    As
      agent
      for and on behalf of itself,

    the
      Borrower and the other Finance Parties:-

    

    By:
      ..........................................

    

    Date:
      [    ]

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
          1
            Details
            of the Bank's Commitment should not be completed after the Termination
            Date.

           

          
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    Form
      of Transfer Certificate Spanish Version

     

    

    A:     ING
      Bank
      N. V. como agente (el “Agente”).

    

    Este
      certificado de cesión se refiere a un acuerdo de financiación (según éste pueda
      ser de tanto en vez modificado, variado, novado o complementado, el
“Acuerdo
      de Financiación”)
      de
      fecha (...) de 2006 por el cual se puso a disposición de Teekay LNG Partners, L.
      P., como prestatario, una facilidad crediticia inicial tipo “revolving”
      sobre
      una
      base de reducción progresiva de hasta US$ 330.000.000 por un grupo de bancos en
      nombre de los cuáles actúa el Agente como agente y agente de
      garantías.

     

    
      	1.  	
              Los
                términos definidos en el Acuerdo de Financiación tendrán, salvo indicación
                en contrario, los mismos significados que en aquél. Los términos “Banco” y
                “Cesionario” se definen en el anexo a este certificado de
                cesión.

            

    

     

     

    
      	2.  	
              El
                Banco (i) confirma que los particulares recogidos en el Anexo a la
                presente bajo el encabezamiento “Compromiso
                del Banco”
                resume de forma ajustada su Compromiso bajo el Acuerdo de Financiación y
                (ii) requiere al Cesionario para que acepte y procure la cesión al
                Cesionario de la parte de tal Compromiso que se especifica en el
                Anexo
                mediante la firma y entrega del Certificado de Cesión al Agente en la
                dirección para el servicio de Comunicaciones especificado en el Acuerdo de
                Financiación.

            

    

     

    
      	3.  	
              El
                Cesionario requiere al Agente para que acepte este Certificado de
                Cesión
                como entregado al Agente para y a los efectos de la cláusula 14.4 del
                Acuerdo de Financiación para que despliegue los efectos de conformidad con
                los términos allí referidos en la Fecha de Cesión o en aquella fecha
                posterior según ésta pueda ser fijada de conformidad con los términos allá
                recogidos.

            

    

     

    
      	4.  	
              El
                Cesionario confirma que ha recibido una copia del Acuerdo de Financiación
                junto con cualquier otra información que ha requerido en relación con esta
                transacción y que no se ha basado ni se basará en ningún momento en el
                futuro en el Banco o en cualquier otra parte en el Acuerdo de Financiación
                para verificar o requerir en su nombre sobre la legalidad, validez,
                efectividad, adecuación, exactitud o integridad de cualquiera de dicha
                información y además acuerda que no se ha basado y no se basará en el
                Banco o en ninguna otra parte en el Contrato de Financiación para acceder
                o mantener bajo revisión en su nombre la condición financiera, capacidad
                crediticia, condición, asuntos, estatus o naturaleza del Prestatario o de
                cualquier otra parte en el Acuerdo de
                Financiación.

            

    

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
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      	5.  	
              La
                ejecución de este Certificado de Cesión por el Cesionario constituye su
                manifestación al Cedente y a todas las partes en el Contrato de
                Financiación de que tiene el poder de constituirse en parte del Acuerdo de
                Financiación como un Banco en los términos aquí y allí recogidos y de que
                ha adoptado todos los pasos necesarios para la firma y entrega de
                este
                Certificado de Cesión.

            

    

     

    
      	6.  	
              El
                Cesionario se compromete con el Banco y con cada una de las otras
                partes
                en el Contrato de Financiación a que cumplirá de conformidad con sus
                términos todas aquellas obligaciones que de conformidad con el Acuerdo
                de
                Financiación serán asumidas por aquél tras la entrega de este Certificado
                de Cesión al Agente y que cumplirá todas las condiciones (si las hubiere)
                sujetas a las cuales se exprese que este Certificado de Cesión tendrá
                efecto.

            

    

     

    
      	7.  	
              El
                Banco no presta representación ni garantía alguna y no asume ninguna
                responsabilidad con relación a la legalidad, validez, efectividad,
                adecuación o ejecutabilidad del Acuerdo de Financiación o de cualquier
                documento con él relacionado y no asume responsabilidad alguna en relación
                a la situación financiera del Prestatario o por el cumplimiento y
                observancia por el Prestatario de cualquiera de sus obligaciones
                bajo el
                Acuerdo de Financiación o bajo cualquier documento relacionado con el
                mismo y todas y cada una de las condiciones o garantías, ya sean expresas
                o implícitas por ley o de cualquier otra forma, se excluyen por la
                presente.

            

    

     

    
      	8.  	
              El
                Banco notifica que nada en este certificado de cesión o en el Acuerdo de
                Financiación (o en cualquier otro documento referente al mismo) obligará
                al Banco a (i) aceptar una retrocesión por parte del Cesionario de todos o
                parte de sus derechos, beneficios y/o obligaciones bajo el Acuerdo
                de
                Financiación cedidos por la presente o (ii) a soportar ninguna pérdida
                sufrida o incurrida directa o indirectamente por el Cesionario por
                cualquier razón incluida, sin limitación, la falta de cumplimiento por el
                Prestatario o por cualquier otra parte en el Acuerdo de Financiación (o de
                cualquier otro documento relacionado con éste) bajo cualquiera de dichos
                documentos. El Cesionario reconoce la ausencia de cualquiera de dichas
                obligaciones referidas en los apartados (i) o (ii)
                precedentes.

            

    

     

    
      	9.  	
              Este
                Certificado de Cesión y los derechos y obligaciones de las partes bajo el
                mismo se regirán e interpretarán de conformidad con la ley
                inglesa.

            

    

     

     

     

     

     

     

     

     

     

    
      
        
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    EL
      ANEXO

    

     

    
      	1.  	
              Banco:

            

    

     

     

    
      	2.  	
              Cesionario:

            

    

     

     

    
      	3.  	
              Fecha
                de la Cesión:

            

    

     

     

    
      	4.  	
              Compromiso2:Parte
                Cedida:

            

    

     

     

    
      
        	(Banco Cedente)	(Banco Cesionario)
	Por:	Por:
	Fecha:	Fecha:

     

    

    

    ING
      Bank
      N. V.

    Como
      agente en su propio nombre y en el del 

    Prestatario
      y las otras Partes Financieras:-

    

    Por:...................................

    Fecha:(
      )

     

     

     

     

     

     

     

     

     

     

    
      
        
          2
            Los
            detalles del Compromiso del Banco no deben cumplimentarse tras la Fecha
            de
            Terminación.

           

          
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    SCHEDULE
      5

     

    Form
      of Drawdown Notice

     

    

    
      	
              To:

            	
              ING
                BANK N.V. 

            

    

    

    
      	
              From:

            	
              TEEKAY
                LNG PARTNERS L.P. 

            

     

    
      	
                                                                                                                      [Date]

            

    

     

    

    Dear
      Sirs,

    Drawdown
      Notice

    

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

    

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

    

    Pursuant
      to Clause 2.3 of the Agreement, we irrevocably request that the Banks
      advance a Drawing of
      [           ] to us on
   
             
20[ ], which is a Business Day, by paying the amount of the Drawing to
      [     ].

     

    We
      hereby
      specify that the Drawing shall be designated as a [General Revolving Drawing]
      [Distribution Drawing].

     

    We
      warrant that the representations and warranties contained in Clause 4 of the
      Agreement (except those contained in Clause 4.9 and Clause 4.16) are true and
      correct at the date of this Drawdown Notice and (except those contained in
      Clause 4.9 [and Clause 4.16]3 )
      will be
      true and correct on
             
20[ ]; that no Event of Default nor Potential Event of Default has occurred
      and is continuing, and that no Event of Default or Potential Event of Default
      will result from the advance of the Drawing requested in this Drawdown Notice.
      

     

     

     

     

     

     

     

     

     

     

     

    
      
        
          3
            Not to
            be in first Drawdown Notice, only to include in subsequent Drawdown
            Notices

           

          
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    [We
      further confirm and certify that no material adverse change has occurred since
      the Execution Date in the business, assets, operations, condition (financial
      or
      otherwise) or prospects of the Guarantors or their subsidiaries or in the facts
      and information regarding such entities as represented to date4 ].

    

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

    

    Yours
      faithfully

    

    

    TEEKAY
      LNG PARTNERS L.P.

    By:
      TEEKAY GP L.L.C., its General Partner

    

    By:
                                                                            

    Name:
                                                                       

    Title:
                                                                         

    

     

     

     

     

     

     

     

     

     

    
      
        
          4
            To be in
            first Drawdown Notice only.

           

          
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    SCHEDULE
      6

     

    Calculation
      of the Mandatory Cost

     

    
      	
              1

            	
              The
                Mandatory Cost is an addition to the interest rate to compensate
                the Banks
                for the cost of compliance with (a) the requirements of the Bank
                of
                England and/or the Financial Services Authority (or, in either case,
                any
                other authority which replaces all or any of its functions) or (b)
                the
                requirements of the European Central
                Bank.

            

    

     

    
      	
              2

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

            

    

     

    
      	
              3

            	
              The
                Additional Cost Rate for any Bank lending from a Facility Office
                in a
                Participating Member State will be the percentage notified by that
                Bank to
                the Agent. This percentage will be certified by that Bank in its
                notice to
                the Agent to be its reasonable determination of the cost (expressed
                as a
                percentage of that Bank's participation in all loans made from that
                Facility Office) of complying with the minimum reserve requirements
                of the
                European Central Bank in respect of loans made from that Facility
                Office.

            

    

     

    
      	
              4

            	
              The
                Additional Cost Rate for any Bank lending from a Facility Office
                in the
                United Kingdom will be calculated by the Agent as
                follows:

            

    

     

     

    
      	
               E
                x 0.01 

            	 
	
               300      
per
                cent. per
                annum.

            

    

     

    
       

    

    
      	 	
              Where
                E is the rate of charge payable by a Bank to the Financial Services
                Authority under the Fees Rules in respect of the relevant financial
                year
                of the Financial Services Authority (calculated for this purpose
                by the
                Agent as being the average of the Fee Tariffs applicable to that
                Bank for
                that financial year).

            

    

     

    
      	
              5

            	
              For
                the purposes of this Schedule:

            

    

     

    
      	 	
              (a)

            	
              "Eligible
                Liabilities and
                "Special
                Deposits"
                have the meanings given to them from time to time under or pursuant
                to the
                Bank of England Act 1998 or (as may be appropriate) by the Bank of
                England;

            

    

     

     

     

     

     

     

     

    
      
        
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              (b)

            	
              "Facility
                Office"
                means the office notified by a Bank to the Agent in writing on or
                before
                the date it becomes a Bank as the office through which it will perform
                its
                obligations under the Agreement;

            

    

     

    
      	 	
              (c)

            	
              "Fee
                Rules"
                means the rules on periodic fees contained in the FSA Supervision
                Manual
                or such other law or regulation as may be in force from time to time
                in
                respect of the payment of fees for the acceptance of
                deposits;

            

    

     

    
      	 	
              (d)

            	
              "Fee
                Tariffs"
                means the fee tariffs specified in the Fees Rules under the activity
                group
                A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee
                required
                pursuant to the Fee Rules but taking into account any applicable
                discount
                rate); and

            

    

     

    
      	 	
              (e)

            	
              "Participating
                Member State"
                means any member state of the European Communities that adopts or
                has
                adopted the euro as its lawful currency in accordance with legislation
                of
                the European Union relating to European Monetary
                Union;

            

    

     

    
      	 	
              (f)

            	
              "Parties"
                means any party to the Agreement, including its successors in title
                permitted assigns and permitted transferees;
                and

            

    

     

    
      	 	
              (g)

            	
              "Tariff
                Base"
                has the meaning given to it in, and will be calculated in accordance
                with,
                the Fees Rules.

            

    

     

    
      	
              6

            	
              If
                requested by the Agent, each Bank shall, as soon as practicable after
                publication by the Financial Services Authority, supply to the Agent,
                the
                rate of charge payable by that Bank to the Financial Services Authority
                pursuant to the Fees Rules in respect of the relevant financial year
                of
                the Financial Services Authority (calculated for this purpose by
                that Bank
                as being the average of the Fee Tariffs applicable to that Bank for
                that
                financial year).

            

    

     

    
      	
              7

            	
              Each
                Bank shall supply any information required by the Agent for the purpose
                of
                calculating its Additional Cost Rate. In particular, but without
                limitation, each Bank Shall supply the following information on or
                prior
                to the date on which it becomes a
                Bank:

            

    

     

    
      	 	
              (a)

            	
              the
                jurisdiction of its Facility Office;
                and

            

    

     

    
      	 	
              (b)

            	
              any
                other information that the Agent may reasonably require for such
                purpose.

            

    

     

    
      	
               

            	
              Each
                Bank shall promptly notify the Agent of any change to the information
                provided by it pursuant to this
                paragraph.

            

    

     

     

     

     

     

    
      
        
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              8

            	
              The
                percentages of each Bank for the purpose of E above shall be determined
                by
                the Agent based upon the information supplied to it pursuant to paragraphs
                6 and 7 above and on the assumption that, unless the Bank notifies
                the
                Agent to the contrary, each Bank's obligations in relation to cash
                ratio
                deposits and Special Deposits are the same as those of a typical
                bank from
                its jurisdiction of incorporation with a Facility Office in the same
                jurisdiction as in its Facility
                Office.

            

    

     

    
      	
              9

            	
              The
                Agent shall have no liability to any person if such determination
                results
                in an Additional Cost Rate which over or under compensates any Bank
                and
                shall be entitled to assume that the information provided by any
                Bank
                pursuant to paragraphs 3, 6 and 7 above is true and correct in all
                respects.

            

    

     

    
      	
              10

            	
              The
                Agent shall distribute the additional amounts received as a result
                of the
                Mandatory Cost to the Banks on the basis of the Additional Cost Rate
                for
                each Bank based on the information provided by each Bank pursuant
                to
                paragraphs 3, 6 and 7 above.

            

    

     

    
      	
              11

            	
              Any
                determination by the Agent pursuant to this Schedule in relation
                to a
                formula, the Mandatory Cost, an Additional Cost Rate or any amount
                payable
                to a Bank shall, in the absence of manifest error, be conclusive
                and
                binding on all Parties.

            

    

     

    
      	
              12

            	
              The
                Agent may from time to time, after consultation with the Borrower
                and the
                Banks determine and notify to all Parties any amendments which are
                required to be made to this Schedule in order to comply with any
                change in
                law, regulation or any requirements from time to time imposed by
                the Bank
                of England, the Financial Services Authority or the European Central
                Bank
                (or, in any case, any other authority which replaces all or any of
                its
                functions) and any such determination shall, in the absence of manifest
                error, be conclusive and binding on all Parties.

               

               

               

            

    

     

     

     

     

     

    
      
        
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    SCHEDULE
      7

     

    Form
      of Compliance Certificate
      : Teekay LNG Partners L.P.

     

    To:   
       ING
      Bank
      N.V. (the "Agent")

    From: Teekay
      LNG Partners L.P. (the "Borrower")

    Date:
      [Ÿ]

     

    Dear
      Sirs,

    

    We
      refer
      to an agreement (the "Agreement")
      dated
      [                        ]
      2006 and made between (inter alia) (1) ourselves as borrower (2) the banks
      and
      financial institutions listed in Schedule 1 of the Agreement as banks and (3)
      the Agent as the agent and security trustee (as from time to time amended,
      varied, novated or supplemented).

    

    Terms
      defined or construed in the Agreement have the same meanings and constructions
      in this Certificate.

    

    We
      attach
      the relevant calculation details applicable on the last day of our financial
      [year][quarter] ending [Ÿ]
      (the
      "Relevant
      Period")
      which
      confirm that:-

    

    
      	
              1

            	
              the
                aggregate of Free Liquidity and undrawn committed revolving credit
                lines
                available to be drawn by the Borrower and/or its Subsidiaries (but
                excluding undrawn committed revolving credit lines with less than
                six (6)
                months to maturity) was at all times equal to or greater than/fell
                below
                $35,000,000. Therefore the condition contained in Clause 10.2.15(i)
                of the
                Loan Agreement [has/has not] been complied with in respect of the
                Relevant
                Period.

               

               

               

               

               

               

               

               

               

            

    

     

    
      
        
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              2

            	
              The
                Tangible Net Worth of the Borrower [was at all times equal to or
                greater
                than/fell below] $400,000,000. Therefore the condition contained
                in Clause
                10.2.15(ii) of the Loan Agreement [has/has not] been complied
                with.

            

    

    

    TEEKAY
      LNG PARTNERS L.P.

    By:
      TEEKAY GP L.L.C., its General Partner

    By:
                                                                            

    Name:
                                                                       

    Title:
                                                                         

     

     

     

     

     

     

     

     

     

     

     

    
 

    

    
      
        
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      	 SIGNED
              by	  )
	 duly authorised for and on behalf
              	  )
	 of TEEKAY
              GP L.L.C.
              as General Partner	  )
	 for and on behalf of 	  )
	 TEEKAY LNG PARTNERS
              L.P.	  )
	 in the presence of:- 	  )

    

     

    

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

      

       

    

      

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

      

       

    
      
        	 SIGNED
                by
                	  )
	 duly authorised for and on behalf
                	  )
	 of
                ING BANK
                N.V.	  )
	 (as Bank)	  )

      

       

    

     

    
      
        	 SIGNED
                by
                	  )
	 duly authorised for and on behalf
                	  )
	 of ALLIANCE
                & LEICESTER	  )
	 COMMERICAL FINANCE
                PLC 	  )
	 (as Bank) 	  )

      

       

       

       

       

      
        
          
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        	 SIGNED
                by  	  )
	 duly authorised for and on behalf
                	  )
	 of BANCO
                BILBAO	  )
	 VIZCAYA ARGENTARIA
                S.A. 	  )
	 (as Bank) 	  )

      

       

       

    

    
      
        	 SIGNED
                by  	  )
	 duly authorised for and on behalf
                	  )
	 of CAJA
                DE AHORROS Y MONTE DE 	  )
	 PIEDAD DE
                MADRID	  )
	 (as Bank) 	  )

      

       

    

    
      
        	 SIGNED
                by  	  )
	duly authorised for and on
                behalf  	  )
	 of KfW	  
	 (as Bank)	  )

      

       

    

    
      
        	 SIGNED
                by  	  )
	 duly authorised for and on behalf
                	  )
	 of LANDESBANK
                HESSEN-	  )
	 THURINGEN
                GIROZENTRALE 	  )
	 (as Bank) 	  )

      

       

    

    
      
        	 SIGNED
                by
                	  )
	 duly authorised for and on behalf
                	  )
	 of LLOYDS
                TSB BANK PLC	  )
	 (as Bank)	  )

      

       

    

     

     

     

    
      
        
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    Executed
      Version

    

    DATED
                                                 2006

    

    

    TEEKAY
      LNG PARTNERS L.P.

    (as
      borrower)

    

    -
      and -

    

    ING
      BANK N.V.

    and
      others

    (as
      banks)

    

    -
      and -

    

    ING
      BANK N.V.

    (as
      arranger)

    

    -
      and -

    

    ING
      BANK N.V.

    (as
      agent and security trustee)

    

    

    

    _________________________________________

    

    US$330,000,000
      SECURED

    REDUCING
      REVOLVING LOAN

    FACILITY
      AGREEMENT

    _________________________________________

    
 

    

    STEPHENSON
      HARWOOD

    One,
      St. Paul's Churchyard

    London
      EC4M 8SH

    Tel:
      020 7329 4422

    Fax:
      020 7329 7100

    Ref:
      1138/819

     

    
      
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               CONTENTS

            	
               Page

            
	 	 	 
	 1	 Definitions
              and Interpretation	 1
	 2	 The
              Facility and its Purpose	 20
	 3	 Conditions Precedent and Subsequent	 26
	 4	 Representations
              and Warranties	 29
	 5	 Repayment
              and Prepayment	 34
	 6	 Interest	 36
	 7	 Fees	 37
	 8	 Security
              Documents	 37
	 9	 Agency
              and Trust	 38
	 10	 Covenants	 48
	 11	 Earnings	 54
	 12	 Events Of Default	 54
	 13	 Application
              of Monies	 60
	 14	 Assignment and
              Sub-Participation	 61
	 15	 Payments,
              Mandatory Prepayment, Reserve Requirements and Illegality	 64
	 16	 Communications	 69
	 17	 General
              Indemnities	 70
	 18	 Miscellaneous	 72
	 19	 Law and Jurisdiction	 76
	
               

              SCHEDULE 1

            	 	 78
	
               The
                Banks, the Commitments and the Proportionate Shares

            	 78
	
               

              SCHEDULE
                2

            	 	 80
	
               The
                Vessels

            	 80
	
               

              SCHEDULE
                3

            	 	 81
	
               Reduction
                Schedule

            	 81
	
               

              SCHEDULE
                4

            	 	 82
	
               Form
                of Transfer Certificate English Version

            	 82
	
               Form
                of Transfer Certificate Spanish Version

            	 85
	
               

              SCHEDULE
                5

            	 	 89
	
               Form
                of Drawdown Notice

            	 89
	
               

              SCHEDULE
                6

            	 	 91
	
               Calculation
                of the Mandatory Cost

            	 91
	
               

              SCHEDULE
                7

            	 	 94
	
               Form
                of Compliance Certificate : Teekay LNG Partners L.P.

            	 94

    

     

    
      \P1\3522333.10Form 6k 4.13 Loan Agreement

    

    CONFORMED
      COPY

    

    

    DATED
      2nd
      October 2006

    

    TEEKAY
      OFFSHORE OPERATING L.P.

    (as
      Borrower)

    

    -
      and -

    

    DNB
      NOR BANK ASA

    NORDEA
      BANK NORGE ASA

    FORTIS
      CAPITAL CORP.

     

    and
      others

    (as
      Lenders)

    

    -
      and -

    

    DNB
      NOR BANK ASA

    (as
      Agent)

    

    -
      and -

    

    DEUTSCHE
      SCHIFFSBANK AKTIENGESELLSCHAFT

    (as
      Security Agent)

    

    -
      and -

    

    DNB
      NOR BANK ASA

    NORDEA
      BANK NORGE ASA

    FORTIS
      CAPITAL CORP.

    (as
      Mandated Lead Arrangers)

    

      -
        and -

    

    DNB
      NOR BANK ASA

    NORDEA
      BANK NORGE ASA

    (as
      Bookrunners)

    

     

    ___________________________________

    

    US$940,000,000
      SECURED

    LOAN
      AGREEMENT

    ___________________________________

    

     

    STEPHENSON
      HARWOOD

    One
      St. Paul's Churchyard

    London
      EC4M 8SH

    Tel:
      020 7329 4422 

    Fax:
      020 7329 7100

    Ref:
      819/1138

     

     

    
      
        
          \P1\3549672.7

        

      

      
        1

        
          

        

      

      
        
        

      

       

      
         

        
          	 	
                  CONTENTS

                   

                	
                  Page

                   

                
	
                  1

                   

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

                   

                	
                   

                
	
                  2

                   

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

                   

                	
                  21

                   

                
	
                  3

                   

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

                   

                	
                  21

                   

                
	
                  4

                   

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

                   

                	
                  26

                   

                
	
                  5

                   

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

                   

                	
                  26

                   

                
	
                  6

                   

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

                   

                	
                  26

                   

                
	
                  7

                   

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

                   

                	
                  28

                   

                
	
                  8

                   

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

                   

                	
                  30

                   

                
	
                  9

                   

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

                   

                	
                  34

                   

                
	
                  10

                   

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

                   

                	
                  35

                   

                
	
                  11

                   

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

                   

                	
                  36

                   

                
	
                  12

                   

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

                   

                	
                  41

                   

                
	
                  13

                   

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

                   

                	
                  47

                   

                
	
                  14

                   

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

                   

                	
                  53

                   

                
	
                  15

                   

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

                   

                	
                  56

                   

                
	
                  16

                   

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

                   

                	
                  65

                   

                
	
                  17

                   

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

                   

                	
                  65

                   

                
	
                  18

                   

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

                   

                	
                  67

                   

                
	
                  19

                   

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

                   

                	
                  70

                   

                
	
                  20

                   

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

                   

                	
                  70

                

        

      

    

    

    
      
        
          \P1\3549672.7

        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    
      	
              21

               

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

               

            	
              70

               

            
	
              22

               

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

               

            	
              71

               

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

               

            	
              73

               

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

            	
              74

               

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

               

            	
              74

               

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

               

            	
              77

               

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

               

            	
              78

               

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

               

            	
              80

               

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

               

            	
              81

               

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

               

            	
              83

               

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

               

            	
              84

               

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

               

            	
              87

               

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

               

            	
              88

               

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

               

            	
              88

               

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

               

            	
              89

               

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

               

            	
              90

            

    

     

    

    
      
        
          
            \P1\3549672.7

          

        

        
          3

          
            

          

        

        
          
          

        

      

    

    

    LOAN
      AGREEMENT

     

    Dated:  2nd
      October 2006

     

    BETWEEN:

     

    
      	
              (1)

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

            

    

     

    
      	
              (2)

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

            

    

     

    
      	
              (3)

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

            

    

     

    
      	
              (4)

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

            

    

     

    
      	
              (5)

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

            

    

     

    
      	
              (6)

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

            

    

     

    WHEREAS:

     

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

     

    IT
      IS AGREED
      as
      follows:

    
       

      
        	
                1

              	
                
                  Definitions
                    and Interpretation

                

              

      

       

    

    
      
        
          	 	
                  1.1  

                	
                   In
                    this Agreement:  

                

        

         

        
          
            
              \P1\3549672.7

            

          

          
            4

            
              

            

          

          
            
            

          

        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        5

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        6

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        7

        
          

        

      

      
        
        

      

    

    "Environmental
      Claim"
      means
      any and all enforcement, clean-up, removal, administrative, governmental,
      regulatory or judicial actions, orders, demands or investigations instituted
      or
      completed pursuant to any Environmental Laws or Environmental Approvals together
      with any claims made by any third person relating to damage, contribution,
      loss
      or injury resulting from any Environmental Incident.

     

    "Environmental
      Incident"
      means:

     

    
      	 	
              (a)

            	
              any
                release of Environmentally Sensitive Material from a Vessel;
                or

            

    

     

    
      	 	
              (b)

            	
              any
                incident in which Environmentally Sensitive Material is released
                from a
                vessel other than a Vessel and which involves a collision between
                a Vessel
                and such other vessel or some other incident of navigation or operation,
                in either case, in connection with which the relevant Vessel is actually
                or potentially liable to be arrested, attached, detained or injuncted
                and/or where any guarantor, any manager (or any sub-manager of such
                Vessel) or any of its officers, employees or other persons retained
                or
                instructed by it (or such sub-manager) are at fault or allegedly
                at fault
                or otherwise liable to any legal or administrative action;
                or

            

    

     

    
      	 	
              (c)

            	
              any
                other incident in which Environmentally Sensitive Material is released
                otherwise than from such Vessel and in connection with which that
                Vessel
                is actually or potentially liable to be arrested and/or where any
                guarantor, any manager (or any sub-manager of the relevant Vessel)
                or any
                of its officers, employees or other persons retained or instructed
                by it
                (or such sub-manager) are at fault or allegedly at fault or otherwise
                liable to any legal or administrative
                action.

            

    

     

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

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (d)

            	
              relate
                to Environmentally Sensitive Materials or health or safety
                matters.

            

    

     

    "Environmentally
      Sensitive Material"
      means
      (i) oil and oil products and (ii) any other waste, pollutant, contaminant or
      other substance (including any liquid, solid, gas, ion, living organism or
      noise) that may be harmful to human health or other life or the environment
      or a
      nuisance to any person or that may make the enjoyment, ownership or other
      territorial control of any affected land, property or waters more costly for
      such person to a material degree.

     

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

            

    

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        9

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        10

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    "LIBOR"
      means:

     

    
      
        
          \P1\3549672.7

        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      
        	 	
                (a)

              	
                the
                  applicable Screen Rate; or

              

      

       

    

     

    
      	 	
              (b)

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

            

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        12

        
          

        

      

      
        
        

      

    

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (d)

            	
              the
                validity, legality or enforceability of any security expressed to
                be
                created pursuant to any Security Document or the priority and ranking
                of
                any such security,

            

    

     

    provided
      that, in determining whether any of the forgoing circumstances shall constitute
      such a material adverse change or material adverse effect for the purposes
      of
      this definition, the Finance Parties shall consider such circumstance in the
      context of (x) the Group taken as a whole and (y) the ability of the Borrower
      and the Guarantor to perform each of their obligations under the Security
      Documents.

     

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

     

    "Material
      Subsidiary"
      means:

     

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

     

    provided
      that:

    
       

      
        	 	
                (i)

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

              

      

       

      
        
          
            \P1\3549672.7

          

        

        
          13

          
            

          

        

        
          
          

        

      

      
         

        
          	 	
                  (ii)

                	
                   a
                    statement by the auditors of the Borrower to the effect that,
                    in their
                    opinion, a Subsidiary of the Borrower is or is not or was or
                    was not at
                    any particular time a Material
                    Subsidiary shall, in the absence of manifest error, be conclusive
                    and
                    binding on each of the parties to this Agreement.
                    

                

        

         

      

    

    "Maximum
      Amount"
      means

     

    
      	 	
              (i)

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

            

    

     

    
      	 	
              (ii)

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

            

    

     

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

     

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

     

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

     

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

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

            	
              carry
                on its business from time to time.

            

    

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        14

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        15

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        16

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        17

        
          

        

      

      
        
        

      

    

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

     

    "Total
      Debt"
      means
      the aggregate of:-

     

    
      
        	 	
                
                  (a)

                

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

              

      

       

    

    
      	 	
              (b)

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

            

    

     

    "Total
      Loss"
      in
      relation to a Vessel means: 

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

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

     

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

     

    
      
        
          \P1\3549672.7

        

      

      
        18

        
          

        

      

      
        
        

      

    

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

     

    "Trust
      Property"
      means:

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

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

     

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

     

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

     

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

     

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

     

    
      
        	 	
                1.2 

              	
                 In
                  this Agreement: 

              

      

       

    

    
      	 	
              1.2.1

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        19

        
          

        

      

      
        
        

      

    

    
      	 	
              1.2.2

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

            

    

     

    
      	 	
              1.2.3

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

            

    

     

    
      	 	
              1.2.4

            	
              references
                to this Agreement include the Recitals and the
                Schedules;

            

    

     

    
      	 	
              1.2.5

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

            

    

     

    
      	 	
              1.2.6

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

            

    

     

    
      	 	
              1.2.7

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

            

    

     

    
      	 	
              1.2.8

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

            

    

     

    
      	 	
              1.2.9

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

            

    

     

    
      
        	 	
                1.3

              	
                Offer
                  letter 

              

      

       

    

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

     

    
      
        
          \P1\3549672.7

        

      

      
        20

        
          

        

      

      
        
        

      

    

    
      
        
          	
                  2

                	
                  
                    
                      The
                        Loan
                        and its
                        Purposes

                    

                  

                

        

         

      

    

      
        	 	
                2.1

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

              

      

     

    
      	 	
              2.2

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

            

    

     

      
        	 	
                2.3

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

              

      

     

    
      	 	
              2.4

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

            

    

     

    
      
        
          
            	
                    3

                  	
                    
                      
                        Conditions
                          of Utilisation

                      

                    

                  

          

           

        

      

    

    
      	 	
              3.1

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

            

    

     

      
        	 	
                3.2

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

              

      

     

      
        	 	
                3.2.1

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

              

      

     

    
      	 	
              3.2.2

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

            

    

     

    
      	
            	
              3.3

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

            

    

     
    

        
          	 	
                  3.3.1 

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

        

       

      
        
          
            \P1\3549672.7

          

        

        
          21

          
            

          

        

        
          
          

        

      

    

      
        	 	
                3.3.2

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

              

      

    
       

        
          	 	
                  3.3.3

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

                

        

      
         

          
            	 	
                    3.3.4

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

                  

          

          

      

    

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

     

    
      
        	 	
                3.4

              	
                Facility
                  Reduction 

              

      

       

      
        
          	 	
                  3.4.1

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

                

        

         

        
          
            
              	 	
                      3.4.2

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

                    

            

             

            
              
                
                  \P1\3549672.7

                

              

              
                22

                
                  

                

              

              
                
                

              

            

            
              
                
                  	 	
                          3.4.3

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

                        

                

                
                  
                     

                    
                      
                        
                          \P1\3549672.7

                        

                      

                      
                        23

                        
                          

                        

                      

                      
                        
                        

                      

                    

                    
                      	 	
                              3.4.4

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

                            

                    

                    
                      
                         

                        
                          	 	
                                  3.4.5

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

                                

                        

                        
                          
                             

                            
                              
                                
                                  \P1\3549672.7

                                

                              

                              
                                24

                                
                                  

                                

                              

                              
                                
                                

                              

                            

                            
                              	 	
                                      3.4.6

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

                                    

                            

                            
                               

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          	 	
                  3.5 

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

                

        

         

      

    

      
        	 	
                3.6

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

              

      

     

      
        	 	
                3.6.1

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

              

      

     

    
      	 	
              3.6.2

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

            

    

     

      
        	 	
                3.7

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

              

      

     

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

     

      
        	 	
                3.8

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

              

      

     

    

        
          	 	
                  3.8.1

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

                

        

       

    

      
        	 	
                3.8.2

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

              

      

    
      
         

        
          
            
              \P1\3549672.7

            

          

          
            25

            
              

            

          

          
            
            

          

        

        
          
            
              
                	
                        4

                      	
                        
                          
                            Advance 

                          

                        

                      

              

               

            

          

        

      

    

      
        	 	
                4.1

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

              

      

     

      
        	 	
                4.2

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

              

      

    
      
         

        
          
            
              
                	
                        5

                      	
                        
                          
                            Repayment 

                          

                        

                      

              

               

            

          

        

      

    

      
        	 	
                5.1

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

              

      

     

      
        	 	
                5.2

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

              

      

    
       

      
        
          
            
              
                	
                        6

                      	
                        
                          
                            
                              Prepayment

                            

                          

                        

                      

              

               

            

          

        

      

    

    
      	 	
              6.1

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

            

    

     

    
      	 	
              6.1.1

            	
              that
                Lender shall promptly notify the Agent of that event;
                

            

    

     

      
        	 	
                6.1.2

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

              

      

     

    
      
        
          \P1\3549672.7

        

      

      
        26

        
          

        

      

      
        
        

      

    

      
        	 	
                6.1.3

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

              

      

     

      
        	 	
                6.2

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

              

      

     

      
        	 	
                6.3

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

              

      

     

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

     

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

     

    
      	 	
              6.4

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

            

    

    
      
         

        
          
            
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            27

            
              

            

          

          
            
            

          

        

        
          
            
              
                	
                        7

                      	
                        
                          
                            Interest 

                          

                        

                      

              

               

            

          

        

      

    

      
        	 	
                7.1

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

              

      

     

      
        	 	
                7.2

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

              

      

     

      
        	 	
                7.3

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

              

      

     

      
        	 	
                7.4

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

              

      

     

      
        	 	
                7.5

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

              

      

     

    
      
        	 	
                (i)

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

              

      

      
         

        
          	 	
                  (ii) 

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

                

        

         

      

    

      
        	 	
                7.6

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

              

      

     

    
      
        
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        28

        
          

        

      

      
        
        

      

    

      
        	 	
                7.7

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

              

      

     

    
      
        
          
            	 	
                    7.8 

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

          

           

        

      

    

      
        	 	
                7.9

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

              

      

     

      
        	 	
                7.9.1

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

              

      

     

      
        	 	
                7.9.2

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

              

      

     

    
      	 	
              (a)

            	
              the
                Margin; and

            

    

     

      
        	 	
                (b)

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

              

      

     

    
      
        
          \P1\3549672.7

        

      

      
        29

        
          

        

      

      
        
        

      

    

      
        	 	
                (c)

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

              

      

     

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

     

      
        	 	
                7.9.3

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

              

      

     

      
        	 	
                7.9.4

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

              

      

     

      
        	 	
                7.9.5

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

              

      

     

      
        	 	
                7.10

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

              

      

     

    
      
        
          
            
              
                
                  
                    	
                            8

                          	
                            
                              
                                
                                  Indemnities

                                

                              

                            

                          

                  

                   

                

              

            

          

        

      

    

    
      	 	
              8.1

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        30

        
          

        

      

      
        
        

      

    

      
        	 	
                8.1.1

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

              

      

     

    
      	 	
              8.1.2

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

            

    

     

    
      	 	
              8.1.3

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

            

    

     

      
        	 	
                8.2

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

              

      

     

      
        	 	
                8.3

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

              

      

     

    
      
        
          \P1\3549672.7

        

      

      
        31

        
          

        

      

      
        
        

      

    

    
      	 	
              8.4

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

            

    

     

    
      	 	
              8.5

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

            

    

     

    
      	 	
              8.5.1

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

            

    

     

    
      	 	
              8.5.2

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

            

    

     

    
      	 	
              8.5.3

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

            

    

     

    
      	 	
              8.5.4

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

            

    

     

    
      	 	
              8.5.5

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        32

        
          

        

      

      
        
        

      

    

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

     

    
      	 	
              8.6

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

            

    

     

    
      
        	 	
                8.6.1

              	compensated for by a payment made under Clause
                8.10;
                or

      

       

      
        
          
            	 	
                    8.6.2 

                  	compensated for by a payment made under Clause
                    17.3;
                    or 

          

           

          
            
              
                	 	
                        8.6.3

                      	compensated for by the payment of the
                        Mandatory Cost;
                        or 

              

              
                 

              

            

          

        

      

    

    
      	 	
              8.6.4

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

            

    

     

    
      	 	
              8.7

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

            

    

     

    
      	 	
              8.8

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        33

        
          

        

      

      
        
        

      

    

    
      	 	
              8.9

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

            

    

     

    
      	 	
              8.10

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

            

    

     

    
      
        
          
            
              
                
                  
                    
                      	
                              9

                            	
                              
                                
                                  
                                    
                                      Fees

                                    

                                  

                                

                              

                            

                    

                     

                  

                

              

            

          

        

      

    

      
        	 	
                9.1

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

              

      

     

      
        	 	
                9.2

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

              

      

     

    
      
        
          \P1\3549672.7

        

      

      
        34

        
          

        

      

      
        
        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                10

                              	
                                
                                  
                                    
                                      
                                        
                                          Security
                                            and Application of
                                            Moneys

                                        

                                      

                                    

                                  

                                

                              

                      

                       

                    

                  

                

              

            

          

        

      

    

    
      	 	
              10.1

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

            

    

     

    
      	 	
              10.1.1

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

            

    

     

    
      	 	
              10.1.2

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

            

    

     

    
      	 	
              10.1.3

            	
              an
                on demand guarantee and indemnity from the
                Guarantor;

            

    

     

    
      	 	
              10.2

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

            

    

     

    
      	 	
              10.3

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

            

    

     

    
      	 	
              10.3.1

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

            

    

     

    
      	 	
              10.3.2

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

            

    

     

    
      	 	
              10.3.3

            	
              otherwise
                arising under or in connection with any Security
                Document,

            

    

     

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

    
       

      
        	 	
                (i)

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

      

       

      
        
          
            \P1\3549672.7

          

        

        
          35

          
            

          

        

        
          
          

        

      

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

        

        
           

          
            
              	 	
                      
                        (iii)

                      

                    	
                      thirdly
                        in or towards payment of all outstanding principal
                        hereunder;

                    

            

            
               

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

                      

              

               

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

                          

                  

                              

                

              

            

          

        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  11

                                	
                                  
                                    
                                      
                                        
                                          
                                            
                                              Representations
                                                and
                                                Warranties

                                            

                                          

                                        

                                      

                                    

                                  

                                

                        

                         

                      

                    

                  

                

              

            

          

        

      

    

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

     

    
      	 	
              11.1

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

            

    

     

    
      	 	
              11.2

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

            

    

     

    
      	 	
              11.3

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        36

        
          

        

      

      
        
        

      

    

    
      	 	
              11.4

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

            

    

     

    
      	 	
              11.5

            	
              Governing
                Law and Judgments
                In
                any proceedings taken in any of the Security Parties' jurisdiction
                of
                incorporation or formation in relation to any of the Security Documents
                in
                which there is an express choice of the law of a particular country
                as the
                governing law thereof, that choice of law and any judgment or (if
                applicable) arbitral award obtained in that country will be recognised
                and
                enforced.

            

    

     

    
      	 	
              11.6

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

            

    

     

    
      	 	
              11.7

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

            

    

     

    
      	 	
              11.8

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        37

        
          

        

      

      
        
        

      

    

    
      	 	
              11.9

            	
              No
                Winding-up Neither
                the Borrower, the Guarantor nor any Material Subsidiary have taken
                any
                corporate or limited partnership action nor have any other steps
                been
                taken or legal proceedings been started or (to the best of the Borrower's
                knowledge and belief) threatened against the Borrower, the Guarantor
                or
                any Material Subsidiary for its winding-up, dissolution, administration
                or
                reorganisation or for the appointment of a receiver, administrator,
                administrative receiver, trustee or similar officer of it or of any
                or all
                of its assets or revenues which might have a material adverse effect
                on
                the business or financial condition of the Group taken as a
                whole.

            

    

     

    
      	 	
              11.10

            	
              Solvency

            

    

     

    
      
        
          	 	
                  
                    11.10.1

                  

                	
                  Neither
                    the Borrower, the Guarantor nor the Group taken as a whole is
                    unable, or
                    admits or has admitted its inability, to pay its debts or has
                    suspended
                    making payments
                    in respect of any of its debts.

                

        

         

      

      
        	 	
                11.10.2

              	Neither the Borrower, the Guarantor nor any Material
                Subsidiary by reason of actual or anticipated financial difficulties,
                has
                commenced, or intends to commence, negotiations with one or more
                of its
                creditors with a view to rescheduling any of its
                indebtedness.

      

       

      
        
          	 	
                  11.10.3

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

        

        
           

          
            
              	 	
                      11.10.4

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

            

             

          

        

      

    

    
      	 	
              11.11

            	
              No
                Material Defaults

            

    

     

    
      
        
          	 	
                  11.11.1

                	Without prejudice to Clause 11.11.2, neither
                  the
                  Borrower, the Guarantor nor any Material Subsidiary is in breach
                  of or in
                  default under any agreement to which it is a party or which is
                  binding on
                  it or any of its assets to an extent or in a manner which might
                  have a
                  material adverse effect on the business or financial condition
                  of the
                  Group taken as a whole.

        

        
          
             

            
              
                
                  \P1\3549672.7

                

              

              
                38

                
                  

                

              

              
                
                

              

            

            
              
                
                  	 	
                          11.11.2

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

                

                
                   

                

              

            

          

        

      

    

    
      	 	
              11.12

            	
              No
                Material Proceedings
                No
                action or administrative proceeding of or before any court, arbitral
                body
                or agency which is not covered by adequate insurance or which might
                have a
                material adverse effect on the business or financial condition of
                the
                Group taken as a whole has been started or is reasonably likely to
                be
                started.

            

    

     

    
      	 	
              11.13

            	
              Borrower's
                Accounts All
                financial statements relating to the Group required to be delivered
                under
                Clause 12.1, were each prepared in accordance with GAAP, give (in
                conjunction with the notes thereto) a true and fair view of (in the
                case
                of annual financial statements) or fairly represent (in the case
                of
                quarterly accounts) the financial condition of the Group at the date
                as of
                which they were prepared and the results of the Group’s operations during
                the financial period then ended.

            

    

     

    
      
        	 	
                11.14 

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

              

      

       

    

    
      	 	
              11.15

            	
              No
                Undisclosed Liabilities
                As
                at the date to which the Borrower's Accounts were prepared neither
                the
                Borrower, the Guarantor nor any Material Subsidiary had any material
                liabilities (contingent or otherwise) which were not disclosed thereby
                (or
                by the notes thereto) or reserved against therein nor any unrealised
                or
                anticipated losses arising from commitments entered into by it which
                were
                not so disclosed or reserved against
                therein.

            

    

     

    
      	 	
              11.16

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

            

    

     

    
      	 	
              11.17

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        39

        
          

        

      

      
        
        

      

    

    
      	 	
              11.18

            	
              Security
                Each of the Security Parties is the legal and beneficial owner of
                all
                assets and other property which it purports to charge, mortgage,
                pledge,
                assign or otherwise secure pursuant to each Security Document and
                those
                Security Documents to which it is a party create and give rise to
                valid
                and effective security having the ranking expressed in those Security
                Documents.

            

    

     

    
      	 	
              11.19

            	
              Necessary
                Authorisations
                The Necessary Authorisations required by each Security Party, are
                in full
                force and effect, and each Security Party is in compliance with the
                material provisions of each such Necessary Authorisation relating
                to it
                and, to the best of its knowledge, none of the Necessary Authorisations
                relating to it are the subject of any pending or threatened proceedings
                or
                revocation.

            

    

     

    
      
        
          	 	
                  11.20 

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

                

        

         

      

    

    
      	 	
              11.21

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

            

    

     

    
      	 	
              11.22

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

            

    

     

    
      	 	
              11.23

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

            

    

     

    
      
        	 	
                11.23.1

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

      

      
         

        
          	 	
                  11.23.2

                	the limitation of enforcement by laws relating
                  to
                  bankruptcy, insolvency, liquidation, reorganisation, court schemes,
                  moratoria, administration and other laws generally affecting or
                  limiting
                  the rights of creditors;

        

        
           

          
            
              
                \P1\3549672.7

              

            

            
              40

              
                

              

            

            
              
              

            

          

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

          

          
             

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

            

            
               

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

              

               

            

          

        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    12

                                  	
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  Undertakings
                                                    and
                                                    Covenants

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                          

                           

                        

                      

                    

                  

                

              

            

          

        

      

    

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

    
       

      
        	 	
                12.1

              	
                General
                  Undertakings 

              

      

       

    

    
      	 	
              12.1.1

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

            

    

     

    
      	 	
              12.1.2

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

            

    

     

    
      	 	
              (a)

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

            

    

    
       

      
        	 	
                (b)

              	
                shall
                  be prepared in accordance with
                  GAAP.

              

      

       

    

    
      	 	
              12.1.3

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        41

        
          

        

      

      
        
        

      

    

    
      	 	
              12.1.4

            	
              Maintenance
                of Legal Validity
                The Borrower shall obtain, comply with the terms of and do all that
                is
                necessary to maintain in full force and effect all authorisations,
                approvals, licences and consents required in or by the laws and
                regulations of its jurisdiction of formation and all other applicable
                jurisdictions, to enable it lawfully to enter into and perform its
                obligations under the Security Documents and to ensure the legality,
                validity, enforceability or admissibility in evidence of the Security
                Documents in its jurisdiction of incorporation or organisation and
                all
                other applicable jurisdictions.

            

    

     

    
      	 	
              12.1.5

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

            

    

     

    
      	 	
              12.1.6

            	
              Claims
                Pari Passu
                The Borrower shall ensure that at all times the claims of the Finance
                Parties against it under the Security Documents rank at least pari
                passu
                with the claims of all its other unsecured creditors save those whose
                claims are preferred by any bankruptcy, insolvency, liquidation,
                winding-up or other similar laws of general
                application.

            

    

     

    
      	 	
              12.1.7

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

            

    

     

    
      	 	
              12.1.8

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

            

    

     

    
      
        
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        42

        
          

        

      

      
        
        

      

    

    
      	 	
              12.1.9

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

            

    

     

    
      
        	 	
                12.1.10

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

      

       

    

    
      	 	
              12.1.11

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

            

    

     

    
      	 	
              12.1.12

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

            

    

     

    
      	 	
              12.1.13

            	
              Necessary
                Authorisations
                Without prejudice to Clause 12.1.12 or any other specific provision
                of the
                Security Documents relating to an Authorisation, the Borrower shall
                (i)
                obtain, comply with and do all that is necessary to maintain in full
                force
                and effect all Necessary Authorisations if a failure to do the same
                may
                cause a Material Adverse Effect; and (ii) promptly upon request,
                supply
                certified copies to the Agent of all Necessary Authorisations.
                

            

    

     

    
      
        
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        43

        
          

        

      

      
        
        

      

    

    
      	 	
              12.1.14

            	
              Compliance
                with Applicable Laws
                The Borrower shall comply with all applicable laws to which it may
                be
                subject if a failure to do the same may have a Material Adverse
                Effect.

            

    

     

    
      
        
          	 	
                  12.1.15

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

                

        

         

      

    

    
      	 	
              12.1.16

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

            

    

     

    
      	 	
              12.1.17

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

            

    

     

    
      	 	
              12.1.18

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

            

    

     

    
      	 	
              12.1.19

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        44

        
          

        

      

      
        
        

      

    

    
      	 	
              12.1.20

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

            

    

     

    
      	 	
              12.1.21

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

            

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

    
       

      
        	 	
                12.1.22

              	
                "Know
                  your customer" checks If:

              

      

       

    

    
      	 	
              (a)

            	
              the
                introduction of or any change in (or in the interpretation, administration
                or application of) any law or regulation made after the date of this
                Agreement;

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        45

        
          

        

      

      
        
        

      

    

    
      	 	
              (c)

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

            

    

     

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

     

    
      	 	
              12.1.23

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

            

    

     

    
      	 	
              12.2

            	
              Financial
                covenants

            

    

     

    Throughout
      the Facility Period the Group shall:-

    
       

      
        	 	
                12.2.1

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

      

      
         

        
          	 	
                  12.2.2

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

        

         

        
          
            
              \P1\3549672.7

            

          

          
            46

            
              

            

          

          
            
            

          

        

      

    

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      13

                                    	
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      Events
                                                        of
                                                        Default

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                            

                             

                            
                              
                                
                                  	 	
                                          
                                            13.1

                                          

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

                                          

                                        

                                

                                 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        	 	
                
                  13.1.1

                

              	
                Borrower's Failure
                  to Pay under this Agreement The
                  Borrower fails to pay any amount of principal due from it under
                  this
                  Agreement at the time, in the currency and otherwise in the manner
                  specified herein provided that, if the Borrower can demonstrate
                  to the
                  reasonable satisfaction of the Agent that all necessary instructions
                  were
                  given to effect such payment and the non-receipt thereof is attributable
                  solely to an error in the banking system, such payment shall instead
                  be
                  deemed to be due, solely for the purposes of this paragraph, within
                  three
                  (3) Business Days of the date on which it actually fell due under
                  this
                  Agreement (if a payment of principal), five (5) Business Days (if
                  a
                  payment of interest) or ten (10) Business Days (if a sum payable
                  on
                  demand); or

              

      

      
         

        
          	 	
                  13.1.2

                	
                  Misrepresentation
                    Any
                    representation or statement made by any Security Party in any
                    Security
                    Document to which it is a party or in any notice or other document,
                    certificate or statement delivered by it pursuant thereto or
                    in connection
                    therewith is or proves to have been incorrect or misleading in
                    any
                    material respect, where the circumstances causing the same give
                    rise to a
                    Material Adverse Effect; or 

                

        

        
           

          
            	 	
                    13.1.3

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

                    

                  

          

          
             

            
              
                
                  \P1\3549672.7

                

              

              
                47

                
                  

                

              

              
                
                

              

            

            
              	 	
                      13.1.4

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

                      

                    

            

            
               

              
                	 	
                        13.1.5

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

                        

                      

              

              
                
                   

                  
                    	 	
                            13.1.6

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

                          

                  

                  
                    
                       

                      
                        	 	
                                13.1.7

                              	
                                Insolvency
                                  and Rescheduling A
                                  Security Party or a Material Subsidiary is unable
                                  to pay its debts as they
                                  fall due, commences negotiations with any one or
                                  more of its creditors
                                  with a view to the general readjustment or rescheduling
                                  of its
                                  indebtedness or makes a general assignment for
                                  the benefit of its
                                  creditors or a composition with its creditors;
                                  or

                              

                      

                      
                        
                           

                          
                            	 	
                                    13.1.8

                                  	
                                    
                                      Winding-up
                                        A
                                        Security Party or a Material Subsidiary takes
                                        any corporate action or
                                        other steps are taken or legal proceedings
                                        are started for its winding-up,
                                        dissolution, administration or re-organisation
                                        or for the appointment of a
                                        liquidator, receiver, administrator, administrative
                                        receiver, conservator,
                                        custodian, trustee or similar officer of
                                        it or of any or all of its
                                        revenues or assets or any moratorium is declared
                                        or sought in respect of
                                        any of its indebtedness; or

                                    

                                  

                          

                          
                            
                              
                                 

                                
                                  
                                    
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                                    48

                                    
                                      

                                    

                                  

                                  
                                    
                                    

                                  

                                

                                
                                  	 	
                                          13.1.9

                                        	
                                          
                                            Execution
                                              or Distress

                                          

                                        

                                

                                 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        	 	
                (a)

              	
                Any
                  Security Party or a Material Subsidiary fails to comply with or
                  pay any
                  sum due from it (within 30 days of such amount falling due) under
                  any
                  final judgment or any final order made or given by any court or
                  other
                  official body of a competent jurisdiction in an aggregate (i) in
                  respect
                  of the Borrower equal to or greater than fifty million Dollars
                  ($50,000,000) or its equivalent in any other currency; or (ii)
                  in respect
                  of the Guarantor or a Material Subsidiary equal to or greater than
                  twenty
                  five million Dollars ($25,000,000) or its equivalent in any other
                  currency, being a judgment or order against which there is no right
                  of
                  appeal or if a right of appeal exists, where the time limit for
                  making
                  such appeal has expired. 

              

      

      
         

        
          
            	 	
                    (b)

                  	
                    Any
                      execution or distress is levied against, or an encumbrancer
                      takes
                      possession of, the whole or any part of, the property, undertaking
                      or
                      assets of a Security Party or a Material Subsidiary in an aggregate
                      amount
                      (i) in respect of the Borrower equal to or greater than fifty
                      million
                      Dollars ($50,000,000) or its equivalent in any other currency;
                      or (ii) in
                      respect of the Guarantor or a Material Subsidiary equal to
                      or greater than
                      twenty five million Dollars ($25,000,000) or its equivalent
                      in any other
                      currency, other than any execution or distress which is being
                      contested in
                      good faith and which is either discharged within 30 days or
                      in respect of
                      which adequate security has been provided within 30 days to
                      the relevant
                      court or other authority to enable the relevant execution or
                      distress to
                      be lifted or released.

                  

          

          
             

            
              
                	 	
                        (c)

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

                      

              

               

              
                
                  
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                  49

                  
                    

                  

                

                
                  
                  

                

              

              
                
                  
                    	 	
                            13.1.10

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

                              

                            

                          

                  

                   

                  
                    
                      
                        	 	
                                13.1.11

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

                                

                              

                      

                      
                        
                           

                          
                            	 	
                                    13.1.12

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

                                      

                                    

                                  

                          

                          
                            
                               

                              
                                	 	
                                        13.1.13

                                      	
                                        
                                          Environmental
                                            Matters

                                        

                                      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          	 	
                  (a)

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

                

        

        
           

          
            
              	 	
                      (b)

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

                    

            

             

            
              
                
                  
                    	 	
                            13.1.14

                          	
                            
                              Repudiation
                                Any
                                Security Party repudiates any Security Document to
                                which it is a party or
                                does or causes to be done any act or thing evidencing
                                an intention to
                                repudiate any such Security Document;
                                or

                            

                          

                  

                

              

               

              
                
                  
                    
                      	 	
                              13.1.15

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

                                

                              

                            

                    

                  

                

              

            

          

        

      

    

    
       

      
        
          
            	 	
                    (a)

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

                  

          

          
            
               

              
                
                  
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                  50

                  
                    

                  

                

                
                  
                  

                

              

              
                
                  
                    	 	
                            (b)

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

                          

                  

                  
                    
                       

                      
                        
                          
                            	 	
                                    (c)

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

                                  

                          

                           

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

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              	 	
                      
                        13.1.16

                      

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

                        

                      

                    

            

          

        

      

      
        
          
             

            
              
                
                  
                    
                      
                        
                          	 	
                                  13.1.17

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

                                    

                                  

                                

                        

                      

                    

                  

                  
                    
                       

                      
                        
                          
                            
                              	 	
                                      13.1.18

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

                                      

                                    

                            

                          

                        

                      

                      
                        
                           

                          
                            
                              
                                
                                  	 	
                                          13.1.19

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

                                            

                                          

                                        

                                

                              

                            

                          

                          
                            
                               

                              
                                
                                  
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                                  51

                                  
                                    

                                  

                                

                                
                                  
                                  

                                

                              

                              
                                
                                  
                                    
                                      	 	
                                              13.1.20

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

                                                

                                              

                                            

                                    

                                  

                                

                              

                              
                                
                                   

                                  
                                    
                                      
                                        
                                          	 	
                                                  13.1.21

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

                                                    

                                                  

                                                

                                        

                                      

                                    

                                  

                                  
                                    
                                      
                                         

                                        
                                          
                                            
                                              
                                                	 	
                                                        13.1.22

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

                                                          

                                                        

                                                      

                                              

                                            

                                          

                                        

                                        
                                          
                                            
                                               

                                              
                                                
                                                  
                                                    
                                                      	 	
                                                              13.1.23

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

                                                            

                                                    

                                                  

                                                

                                              

                                              
                                                 

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                        
                          
                            
                              
                                
                                  
                                    	 	
                                            13.1.24

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

                                          

                                  

                                

                              

                            

                            
                              
                                
                                   

                                  
                                    
                                      
                                        
                                          	 	
                                                  13.1.25

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

                                                    

                                                  

                                                

                                        

                                      

                                    

                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

      
        	 	
                13.2

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

              

      

     

    
      
        
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        52

        
          

        

      

      
        
        

      

    

    
      	 	
              13.2.1

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

            

    

     

      
        	 	
                13.2.2

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

              

      

     

    
      	 	
              13.2.3

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

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        14

                                      	
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          Assignment
                                                            and
                                                            Sub-Participation

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                              

                               

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

      
        	 	
                14.1

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

              

      

     

    
      	 	
              14.2

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

            

    

     

    
      
        
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              14.3

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

            

    

     

    
      	 	
              14.4

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

            

    

     

    
      	 	
              14.4.1

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

            

    

     

    
      	 	
              14.4.2

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

            

    

     

    
      	 	
              14.4.3

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

            

    

     

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

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

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

     

    
      
        
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        54

        
          

        

      

      
        
        

      

    

    
      	 	
              14.5

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

            

    

     

    
      	 	
              14.6

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

            

    

     

    
      	 	
              14.7

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

            

    

     

    
      	 	
              14.7.1

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

            

    

     

    
      	 	
              14.7.2

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

            

    

     

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

     

    
      	 	
              14.8

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

            

    

     

    
      
        
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        55

        
          

        

      

      
        
        

      

    

    
      	 	
              14.9

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

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  	
                                          15

                                        	
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              The
                                                                Agent, the Security
                                                                Agent and the
                                                                Lenders

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                

                                 

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              15.1

            	
              Appointment

            

    

     

    
      	 	
              15.1.1

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

            

    

     

    
      	 	
              15.1.2

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

            

    

     

    
      	 	
              15.1.3

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

            

    

     

    
      	 	
              15.2

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

            

    

     

    
      	 	
              15.2.1

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

            

    

     

    
      	 	
              15.2.2

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

            

    

     

    
      	 	
              15.2.3

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

            

    

     

    
      
        
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        56

        
          

        

      

      
        
        

      

       

    

    
      
        	 	
                15.2.4

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

              

      

       

    

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

     

    
      	 	
              15.3

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

            

    

     

    
      	 	
              15.3.1

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

            

    

     

    
      
        
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        57

        
          

        

      

      
        
        

      

    

    
      	 	
              15.3.2

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

            

    

     

    
      	 	
              15.3.3

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

            

    

     

    
      
        
          	 	
                  15.4 

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

                

        

         

      

    

    
      	 	
              15.4.1

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

            

    

     

    
      	 	
              15.4.2

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

            

    

     

    
      	 	
              15.4.3

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

            

    

     

    
      	 	
              15.4.4

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

            

    

     

    
      	 	
              15.4.5

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

            

    

     

    
      	 	
              15.4.6

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

            

    

     

    
      	 	
              15.4.7

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

            

    

     

    
      	 	
              15.4.8

            	
              agree
                to amend this Clause 15.4.

            

    

     

    
      
        
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        58

        
          

        

      

      
        
        

      

    

    
      	 	
              15.5

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

            

    

     

    
      	 	
              15.6

            	
              Acknowledgement
                Each
                Lender acknowledges that: 

            

    

     

    
      	 	
              15.6.1

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

            

    

     

    
      	 	
              15.6.2

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

            

    

     

    
      	 	
              15.6.3

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

            

    

     

    
      	 	
              15.6.4

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

            

    

     

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

     

    
      	 	
              15.7

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

            

    

     

    
      	 	
              15.7.1

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

            

    

     

    
      	 	
              15.7.2

            	
              the
                financial condition of any Security Party;
                nor

            

    

     

    
      
        
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        59

        
          

        

      

      
        
        

      

    

    
      	 	
              15.7.3

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

            

    

     

    
      	 	
              15.7.4

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

            

    

     

    
      
        
          
            	 	
                    15.8 

                  	
                    The
                      Agent's rights The
                      Agent
                      may:  

                  

          

           

        

      

    

    
      	 	
              15.8.1

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

            

    

     

    
      	 	
              15.8.2

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

            

    

     

    
      	 	
              15.8.3

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

            

    

     

    
      	 	
              15.8.4

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

            

    

     

    
      	 	
              15.8.5

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

            

    

     

    
      	 	
              15.8.6

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

            

    

     

    
      
        
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                      15.9

                    	
                      The
                        Agent's duties The
                        Agent shall:   

                    

            

             

          

        

      

    

    
      	 	
              15.9.1

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

            

    

     

    
      	 	
              15.9.2

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

            

    

     

    
      	 	
              15.10

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

            

    

     

    
      	 	
              15.11

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

            

    

     

    
      	 	
              15.12

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

            

    

     

    
      	 	
              15.13

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

            

    

     

    
      
        
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              15.14

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

            

    

     

    
      	 	
              15.15

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

            

    

     

    
      	 	
              15.16

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

            

    

     

    
      
        	 	
                15.16.1

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

              

      

       

      
        
          
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          62

          
            

          

        

        
          
          

        

      

    

    
      	 	
              15.16.2

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

            

    

     

    
      	 	
              15.16.3

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

            

    

     

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

     

    
      
        
          
            
              
                	 	
                        15.17

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

                      

              

               

            

          

        

      

    

     

    
      	 	
              15.18

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

            

    

     

    
      
        
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              15.19

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

            

    

     

    
      	 	
              15.20

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

            

    

     

    
      	 	
              15.21

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

            

    

     

    
      	 	
              15.21.1

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

            

    

     

    
      	 	
              15.21.2

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

            

    

     

    
      
        
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              15.21.3

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

            

    

     

    
      	 	
              15.21.4

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

            

    

     

    
      	 	
              15.22

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

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            16

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Set-Off

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            17

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Payments 

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              17.1

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

            

    

     

    
      
        
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              17.2

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

            

    

     

    
      	 	
              17.3

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

            

    

     

    
      	 	
              17.4

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

            

    

     

    
      
        
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              17.5

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

            

    

     

      
        	 	
                17.6

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

              

      

     

    
      	 	
              17.7

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

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            18

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Notices

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              18.1

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

            

    

     

    
      	 	
              18.2

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

            

    

     

    
      
        
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        67

        
          

        

      

      
        
        

      

    

    
      	 	
              18.2.1

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

            

    

     

    
      	 	
              18.2.2

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

            

    

     

    
      	 	
              18.2.3

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

            

    

     

    
      	 	
              18.2.4

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

            

    

     

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

     

    
      	 	
              18.3

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

            

    

     

    
      
        	 	
                18.3.1

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

              

      

       

    

    
      	 	
              18.3.2

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

            

    

     

    
      	 	
              18.3.3

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

            

    

     

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

     

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

     

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

     

    
      
        
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        68

        
          

        

      

      
        
        

      

       

    

    
      	 	
              18.4

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

            

    

     

    
      	 	
              18.5

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

            

    

     

    
      	 	
              18.5.1

            	
              in
                English; or

            

    

     

    
      	 	
              18.5.2

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

            

    

     

    
      
        	 	
                18.6

              	
                Electronic
                  communication 

              

      

       

      
        
          	 	
                  (a) 

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

        

        
           

          
            	 	
                    (i)

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

          

          
             

            
              	 	
                      (ii)

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

                    

            

            
               

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

              

               

              
                
                  
                    	 	
                            (b)

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

                  

                  
                     

                    
                      
                        
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                        69

                        
                          

                        

                      

                      
                        
                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            19

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Partial
                                                                    Invalidity

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

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

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            20

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Remedies
                                                                    and
                                                                    Waivers

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    No
      failure to exercise, nor any delay in exercising, on the part of any Finance
      Party, any right or remedy under a Finance Document shall operate as a waiver,
      nor shall any single or partial exercise of any right or remedy prevent any
      further or other exercise or the exercise of any other right or remedy. The
      rights and remedies provided in this Agreement are cumulative and not exclusive
      of any rights or remedies provided by law.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            21

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Miscellaneous

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              21.1

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

            

    

     

    
      	 	
              21.2

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

            

    

     

    
      	 	
              21.3

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

            

    

     

    
      
        
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              21.4

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

            

    

     

    
      	 	
              21.5

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

            

    

     

    
      	 	
              21.6

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

            

    

     

    
      	 	
              21.7

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

            

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    	
                                            22

                                          	
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  Law
                                                                    and
                                                                    Jurisdiction

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                  

                                   

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              22.1

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

            

    

     

    
      	 	
              22.2

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

            

    

     

    
      	 	
              22.3

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

            

    

     

    
      
        
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        71

        
          

        

      

      
        
        

      

       

    

    
      	 	
              22.4

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

            

    

     

    
      	 	
              22.5

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

            

    

     

    
      	 	
              22.5.1

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

            

    

     

    
      	 	
              22.5.2

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

            

    

     

     

    

    
      
        
          
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    SCHEDULE
      1: The Lenders and the Commitments

     

    The
      Lenders                     The
      Commitments         The
      Proportionate Share

     
                  (US$)                               (%)

     

    
      
        	
                 

                DnB NOR Bank ASA

                
                  200
                    Park Avenue

                  31st
                    Floor

                  New
                    York, NY10166

                  United
                    States of America

                  Fax
                    no. +1 212 681 4123

                  Attn:
                    Teresa Rosu

                

              	
                 230,000,000

                 

                 

                 

                 

                 

                 

                 

              	
                 24.5

                 

                 

                 

                 

                 

                 

                 

              
	
                 

                 

                Fortis
                  Capital Corp.

                
                  520
                    Madison Avenue

                  New
                    York

                  NY
                    10022 USA

                  Fax
                    no: +1 212 340 5370

                  Attn:
                    Global Shipping Group

                

              	
                 230,000,000

                 

                 

                 

              	
                 24.5

                 

                 

                 

              
	
                 

                 

                Nordea
                  Bank Finland PLC, 

                
                  New
                    York Branch 

                  437
                    Madison Avenue

                  New
                    York

                  NY
                    10022

                  Fax
                    no: +1 212 421 4420

                  Attention:
                    Shipping, Offshore and 

                  Oil
                    Services Group

                

              	
                 230,000,000

                 

                 

                 

                 

                 

                 

              	
                 
24.5

                 

                 

                 

                 

                 

                 

              
	
                 

                 

                Deutsche
                  Schiffsbank 

                Aktiengesellschaft 
                  Domshof
                    17 

                  28195
                    Bremen

                  Federal
                    Republic of Germany

                  Fax
                    no: +49 421 3609 329

                  Attn:
                    Credit Department

                

              	
                 

                125,000,000

                 

                 

                 

                 

                 

              	
                    
13.25

                 

                 

                 

                 

              
	
                 

                 

                Landesbank
                  Hessen-Thuringen

                
                  
                    Girozentrale
                      

                  New
                    York Branch 

                  420
                    Fifth Avenue, 25th
                    Floor

                  New
                    York 

                  
                    NY
                      10018-2729

                  

                  U.S.A.

                  Fax
                    no: +1212 703 5256

                  Attn:
                    Shipping Finance

                

              	
                 

                125,000,000

                 

                 

                 

                 

                 

                 

                 

                 

              	
                 13.25

                 

                 

                 

                 

                 

                 

                 

              

      

    

                                                                                                                           

                                                                                                                                   

                                                                                                                              
      

     

    

    
      
        
          
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    SCHEDULE
      2: Conditions Precedent and Subsequent

     

    Part
      I: Conditions precedent
      to the First Drawdown Date

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      	
                                              1

                                            	
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      Security
                                                                        Parties

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                    

                                     

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (i)

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

            

    

     

    
      	 	
              (ii)

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

            

    

     

    
      	 	
              (d)

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

            

    

     

    
      	 	
              (e)

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

            

    

     

    
       

      
        
          
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                                                2

                                              	
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          Security
                                                                            and related
                                                                            documents

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                      

                                       

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (d)

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

            

    

     

    
      	 	
              (e)

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

            

    

     

    
      	
              3

            	
              Legal
                opinions

            

    

     

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

     

    
      	
              4

            	
              Other
                documents and evidence

            

    

     

    
      	 	
              (a)

            	
              Drawdown
                Notice A
                duly completed Drawdown Notice.

            

    

     

    
      
        
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              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (d)

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

            

    

     

    
      	 	
              (e)

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

            

    

     

     

    

    
      
        
          
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    Part
      II: Conditions subsequent
      to the First Drawdown Date

    
       

      
        	
                1

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

                

              

      

      
         

        
          	
                  2

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

                

        

      

    

     

    
      
        
          	
                  3

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

                

        

      

      
         

        
          
            
              	
                      4

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

                    

            

          

          
             

            
              
                
                  	
                          5

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

                        

                

              

              
                 

                
                  
                    
                      	
                              6

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

                            

                    

                  

                  
                     

                    
                      
                        
                          	
                                  7

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

                                

                        

                      

                       

                    

                  

                

              

            

          

        

      

    

    

    
      
        
          
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    Part
      III: Conditions precedent to the Step-up Date

     

    
      	
              1

            	
              Security
                Parties

            

    

     

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

            

    

     

    
      	
              2

            	
              Security
                and related documents

            

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (i)

            	
              the
                Bareboat Charters and any relevant Head Charters;
                

            

    

     

    
      	 	
              (ii)

            	
              any
                relevant Management Agreement 

            

    

     

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

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    
      	 	
              (d)

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

            

    

     

    
      	 	
              (e)

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

            

    

     

    
      
        
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              (f)

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

            

    

     

    
      	 	
              (g)

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

            

    

     

    
      	
              3

            	
              Legal
                opinions

            

    

     

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

     

    
      	
              4

            	
              Other
                documents and evidence

            

    

     

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      	 	
              (c)

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

            

    

     

    

    
      
        
          
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    Part
      IV: Conditions subsequent to the Step-up Date

    
       

      
        	
                1

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

              

      

      
         

        
          	
                  2

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

                

        

        
           

          
            	
                    3

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

                  

          

          
             

            
              	
                      4

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

                    

            

            
               

              
                	
                        5

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

                      

              

              
                 

                
                  	
                          6

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

                        

                

                 

              

            

          

        

      

    

     

    

    
      
        
          
            \P1\3549672.7

          

        

        
          80

          
            

          

        

        
          
          

        

      

    

    

    SCHEDULE
      3: Calculation of Mandatory Cost

     

    
      
        
          
            
              	
                      
                        1

                      

                    	
                      
                        
                          The
                            Mandatory Cost is an addition to the interest rate to
                            compensate the Lenders for the cost of compliance with
                            (a) the
                            requirements of the Bank of England and/or the Financial
                            Services
                            Authority (or, in either case, any other authority which
                            replaces all or
                            any of its functions) or (b) the requirements of the
                            European Central
                            Bank.

                        

                      

                    

            

            
              
                 

              

            

          

          
            	
                    
                      (a)

                    

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

                    

                  

          

          
            
               

              
                	
                        
                          (b)

                        

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

                            

                          

                        

                      

              

              
                 

              

            

            
              
                	
                        (c)

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

                        

                      

              

               

              
                             
F x 0.01
                  per cent
                  per annum

              

            

          

        

      

    

      300

     

    
      
        
          
            	
                     

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

                      

                    

                  

          

        

      

    

     

    
      
        
          
            
              
                	
                        
                          2

                        

                      	
                        
                          
                            For
                              the purpose of this
                              Schedule:

                          

                        

                      

              

              
                
                   

                

              

            

          

        

      

    

    
      	 	
              (a)

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

            

    

     

    
      	 	
              (b)

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        81

        
          

        

      

      
        
        

      

       

    

    
      	 	
              (c)

            	
              "Fees
                Regulations"
                means the regulations governing periodic fees contained in the FSA
                Supervision Manual or such other law or regulation as may be in force
                from
                time to time in respect of the payment of fees for the acceptance
                of
                deposits.

            

    

     

    
      	
              3

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

            

    

     

    
      	
              4

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

            

    

     

    

     

    

    
      
        
          
            \P1\3549672.7

          

        

        
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    SCHEDULE
      4: Form of Drawdown Notice

     

    
      	
              To:

            	
              DnB
                NOR Bank ASA

            

    

    

    

    From: Teekay
      Offshore Operating L.P.

                                                                                                            [Date]

    

    Dear
      Sirs,

     

    Drawdown
      Notice

     

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

     

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

       

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

     

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

       

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

     

    Yours
      faithfully

    

    

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

    For
      and
      on behalf of

    Teekay
      Offshore Operating L.P.

     

    

    
      
        
          
            \P1\3549672.7

          

        

        
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    SCHEDULE
      5: Form of Transfer Certificate

     

    To:
       DnB
      NOR
      Bank ASA

    TRANSFER
      CERTIFICATE

     

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

     

    
       

      
        	
                1

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

              

      

      
         

        
          	
                  2

                	
                  
                    The
                      Transferor:

                  

                

        

         

      

    

    
      	 	
              2.1

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

            

    

     

    
      	 	
              2.2

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

            

    

     

    
      
        	
                3

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

                

              

      

      
         

        
          	
                  4

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

                  

                

        

        
           

          
            	
                    5

                  	
                    
                      The
                        Transferee confirms that:

                    

                  

          

           

          
            
              	 	
                      5.1 

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

                    

            

            
               

              
                
                  
                    \P1\3549672.7

                  

                

                
                  84

                  
                    

                  

                

                
                  
                  

                

                 

              

              
                	 	
                        5.2 

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

                      

              

              
                 

                
                  	 	
                          5.3 

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

                        

                

              

            

          

        

      

    

    
       

      
        	
                6

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

              

      

      
         

        
          	
                  7

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

                

        

        
           

          
            	
                    8

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

                  

          

          
             

            
              	
                      9

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

                    

            

             

          

        

      

    

    
      	 	
              9.1

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

            

    

     

    
      	 	
              9.2

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

            

    

     

    
      
        
          \P1\3549672.7

        

      

      
        85

        
          

        

      

      
        
        

      

       

    

    
      	
              10

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

            

    

     

    
      
        	
                11

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

              

      

      
         

        
          	
                  12

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

                

        

         

         

      

    

    THE SCHEDULE

    
       

      
        	
                1

              	
                Transferor:

              

      

      
         

        
          	
                  2

                	
                  Transferee:

                

        

        
           

          
            	
                    3

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

                    

                  

          

          
             

            
              	
                      4

                    	
                      Transferor’s
                        Commitment:

                    

            

            
               

              
                	
                        5

                      	
                        
                          Amount
                            transferred:

                        

                      

              

              
                 

                
                  	
                          6

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

                          

                        

                

                 

              

            

          

        

      

    

    [name
      of Transferor]    [name
      of Transferee]

    

    By:                                                                        
      By:

    

    Date:                                                                     
      Date:

    

    

    

    DnB
      NOR Bank ASA
      as
      Agent

    

    By:
      

    

    Date:
      

    

     

    

    
      
        
          
            \P1\3549672.7

          

        

        
          86

          
            

          

        

        
          
          

        

      

    

    

    SCHEDULE
      6: Form of Compliance Certificate 

     

    To: DnB
      NOR Bank ASA

    

    From: Teekay
      Offshore Operating L.P.

    

    Dated: 

    

    Dear
      Sirs

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

     

    
      	
              1.

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

            

    

     

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

    

    
      	 	
              2.1

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

            

    

    

    
      	 	
              2.2

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

            

    

     

    3. We
      confirm that no Default is continuing.* 

    

    
      	
              Signed:

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

            
	 	
              Duly
                authorised representative

            
	 	
              of

            
	 	
              Teekay
                Offshore Operating L.P.

            

    

     

     

    
      

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

      

    

     

    

    
      
        
          
            \P1\3549672.7

          

        

        
          87

          
            

          

        

        
          
          

        

      

    

    

    SCHEDULE
      7: The Vessels

     

    Part
      I: The Initial Vessels 

     

    
      	
              Vessel

            	
              Flag

            	
              Bareboat
                Charter (where relevant)

               

            
	
              Fuji
                Spirit

            	
              Bahamas

            	 
	
              Gotland
                Spirit

            	
              Bahamas

            	 
	
              Hamane
                Spirit

            	
              Bahamas

            	 
	
              Kilimanjaro
                Spirit

            	
              Bahamas

            	 
	
              Leyte
                Spirit

            	
              Bahamas

            	 
	
              Luzon
                Spirit

            	
              Bahamas

            	 
	
              Navion
                Fennia

            	
              Bahamas

            	 
	
              Navion
                Torinita

            	
              Bahamas

            	 
	
              Nordic
                Marita 

            	
              Bahamas

            	 
	
              Navion
                Svenita

            	
              Bahamas

            	 
	
              Poul
                Spirit

            	
              Bahamas

            	 
	
              Torben
                Spirit

            	
              Bahamas

            	 

    

    

    

    
      
        
          
            \P1\3549672.7

          

        

        
          88

          
            

          

        

        
          
          

        

      

    

    

    Part
      II: The Step-up Vessels

     

    
      	
              Vessel

            	
              Flag

            	
              Bareboat
                Charter (where relevant)

               

            
	
              Basker
                Spirit

            	
              Bahamas

            	 
	
              Navion
                Stavanger 

            	
              Bahamas

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

            
	
              Nordic
                Brasilia

            	
              Bahamas

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

            
	
              Nordic
                Savonita

            	
              NIS

            	 
	
              Nordic
                Spirit

            	
              Bahamas

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

            
	
              Petroatlantic

            	
              Bahamas

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

            
	
              Petronordic

            	
              Bahamas

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

            

    

    

    

    
      
        
          
            \P1\3549672.7

          

        

        
          89

          
            

          

        

        
          
          

        

      

    

    

    SCHEDULE
      8: Reductions

     

    
      	
              Reduction
                Dates

              (months
                after the earlier to occur of (i) the First Drawdown Date and
                (ii)

              31
                October 2006)

            	
              Reductions

            	
              Committed
                amount

            	
              Initial
                Reduction Amounts

            
	
              0

            	 	
              $940,000,000

            	
              0

            
	
              6

            	
              1st
                reduction

            	
              $910,902,375

            	
              $29,097,625

            
	
              12

            	
              2nd
                reduction

            	
              $880,909,998

            	
              $29,992,377

            
	
              18

            	
              3rd
                reduction

            	
              $849,995,355

            	
              $30,914,643

            
	
              24

            	
              4th
                reduction

            	
              $818,130,088

            	
              $31,865,267

            
	
              30

            	
              5th
                reduction

            	
              $785,284,963

            	
              $32,845,125

            
	
              36

            	
              6th
                reduction

            	
              $751,429,850

            	
              $33,855,113

            
	
              42

            	
              7th
                reduction

            	
              $716,533,693

            	
              $34,896,157

            
	
              48

            	
              8th
                reduction

            	
              $680,564,479

            	
              $35,969,214

            
	
              54

            	
              9th
                reduction

            	
              $643,489,212

            	
              $37,075,267

            
	
              60

            	
              10th
                reduction

            	
              $605,273,880

            	
              $38,215,332

            
	
              66

            	
              11th
                reduction

            	
              $565,883,427

            	
              $39,390,453

            
	
              72

            	
              12th
                reduction

            	
              $525,281,718

            	
              $40,601,709

            
	
              78

            	
              13th
                reduction

            	
              $483,431,505

            	
              $41,850,213

            
	
              84

            	
              14th
                reduction

            	
              $440,294,399

            	
              $43,137,106

            
	
              90

            	
              15th
                reduction

            	
              $395,830,827

            	
              $44,463,572

            
	
              96

            	
              16th
                reduction

            	
              $350,000,000

            	
              $45,830,827

            

    

    

    

    
      
        
          
            \P1\3549672.7

          

        

        
          90

          
            

          

        

        
          
          

        

      

    

    

    IN
      WITNESS
      of which
      the parties to this Agreement have executed this Agreement the day and year
      first before written.

     

    
      
        
          
            
              
                	SIGNED
                        by                       	 )	
                            

                      

              

              
                	duly
                        authorised for and on
                        behalf                                	 )	
                        [signed]    

                      

              

              
                	of
                        TEEKAY
                        OFFSHORE                                              	 )	
                            

                      

              

              
                	OPERATING
                        L.P.                         	 )	
                            

                      

              

            

             

             

          

        

      

    

    
      	SIGNED
              by                       	 )	
                  

            

    

    
      	duly
              authorised for and on
              behalf                                	 )	
              [signed]    

            

    

    
      	of
              DNB
              NOR BANK ASA
              (as a
              Lender)                        	 )	
                  

            

    

     

    
       

      
        
          
            
              
                
                  	SIGNED
                          by                       	 )	
                              

                        

                

                
                  	duly
                          authorised for and on
                          behalf                                	 )	
                          [signed]    

                        

                

                
                  	
                          of
                            NORDEA
                            BANK NORGE ASA 

                        	 )	
                              

                        

                

                
                  	(as
                          a
                          Lender)        	 )	
                              

                        

                

              

               

               

              
                
                  
                    
                      
                        
                          	SIGNED
                                  by        	 )	
                                      

                                

                        

                        
                          	duly
                                  authorised for and on behalf	 )	
                                  [signed]    

                                

                        

                        
                          	
                                  of
FORTIS
                                    CAPITAL CORP. 

                                	 )	
                                      

                                

                        

                        
                          	(as
                                  a Lender)    	 )	
                                      

                                

                        

                      

                       

                    

                  

                

              

            

          

        

      

    

    
       

      
        
          
            
              
                
                  	SIGNED
                          by        	 )	
                              

                        

                

                
                  	
                          duly
                            authorised for and on behalf  

                        	 )	
                          [signed]    

                        

                

                
                  	
                          of
DEUTSCHE
                            SCHIFFSBANK 

                        	 )	
                              

                        

                

                
                  	
                          AKTIENGESELLSCHAFT     

                        	 )	
                              

                        

                

              

              
                	
                        (as
                          a Lender) 

                      	 )	
                            

                      

            

          

        

      

    

     

    
      
        
          \P1\3549672.7

        

      

      
        91

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              
                
                  	
                          SIGNED
                            by       

                        	 )	
                              

                        

                

                
                  	
                          duly
                            authorised for and on behalf   

                        	 )	
                          [signed]    

                        

                

                
                  	
                          
                            of
                              LANDESBANK HESSEN-THURINGEN 

                          

                        	 )	
                              

                        

                

                
                  	GIROZENTRALE     	 )	
                              

                        

                

              

              
                	
                        (as
                          a Lender) 

                      	 )	
                            

                      

              

            

          

        

      

    

     

    
       

      
        	SIGNED
                by                       	 )	
                    

              

      

      
        	duly
                authorised for and on
                behalf                                	 )	
                [signed]    

              

      

      
        	of
                DNB
                NOR BANK ASA
                (as a
                Agent)                        	 )	
                    

              

      

       

    

     

    
      
        
          
            
              
                	SIGNED
                        by       	 )	
                            

                      

              

              
                	duly authorised for
                        and on
                        behalf   	 )	
                        [signed]    

                      

              

              
                	
                        of
DEUTSCHE
                          SCHIFFSBANK  

                      	 )	
                            

                      

              

              
                	 AKTIENGESELLSCHAFT     	 )	
                            

                      

              

            

            
              	 (as
                      the Security Agent)   	 )	
                          

                    

            

          

        

      

    

     

    
      
         

        
          	SIGNED
                  by                       	 )	
                      

                

        

        
          	duly
                  authorised for and on
                  behalf                                	 )	
                  [signed]    

                

        

        
          	of
                  DNB
                  NOR BANK ASA
                  (as an
                  MLA)                        	 )	
                      

                

        

         

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	SIGNED
                                by       	 )	
                                    

                              

                      

                      
                        	duly authorised
                                for and on
                                behalf   	 )	
                                [signed]    

                              

                      

                      
                        	
                                of
NORDEA
                                  BANK NORGE ASA 

                              	 )	
                                    

                              

                      

                      
                        	(as
                                an MLA)     	 )	
                                    

                              

                      

                    

                     

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	SIGNED
                          by    	 )	
                              

                        

                

                
                  	duly authorised
                          for and on
                          behalf 	 )	
                          [signed]    

                        

                

                
                  	
                          of
FORTIS
                            CAPITAL CORP. 

                        	 )	
                              

                        

                

                
                  	(as
                          an MLA)     	 )	
                              

                        

                

              

               

              
                
                  
                    \P1\3549672.7

                  

                

                
                  92

                  
                    

                  

                

                
                  
                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	SIGNED
                          by       	 )	
                              

                        

                

                
                  	duly authorised
                          for and on
                          behalf  	 )	
                          [signed]    

                        

                

                
                  	
                          of
DNB
                            NOR BANK ASA 

                        	 )	
                              

                        

                

                
                  	(as
                          a bookrunner)     	 )	
                              

                        

                

              

               

            

          

        

      

    

     

    
      
        
          
            
              
                
                  	SIGNED
                          by       	 )	
                              

                        

                

                
                  	duly authorised
                          for and on
                          behalf   	 )	
                          [signed]    

                        

                

                
                  	
                          of
NORDEA
                            BANK NORGE ASA 

                        	 )	
                              

                        

                

                
                  	(as
                          a bookrunner)     	 )	
                              

                        

                

              

               

            

          

        

      
 

    
      
        
          
            \P1\3549672.7

          

        

        
          93

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]