Document:

Dated                                 April 2003
                ------------------------------------------------

                          GOLAR GIMI (BERMUDA) LIMITED
                   (to be renamed SOVEREIGN GIMI LIMITED) (1)

                                       and

                       GOLAR GAS HOLDING COMPANY, INC.    (2)

                                 LEASE AGREEMENT
                               relating to "GIMI"

                                                                     NORTON ROSE

<PAGE>

                                    Contents

clause                                                                     Page

1      Purpose and definitions................................................1

2      Lessee's representations and warranties...............................21

3      Term of Lease.........................................................26

4      Conditions............................................................30

5      Delivery and acceptance...............................................31

6      Extent of Lessor's liability..........................................32

7      Rental................................................................33

8      Payments, interest and calculations...................................33

9      Costs and indemnities.................................................35

10     Taxation..............................................................39

11     General undertakings..................................................44

12     Sub-leasing...........................................................48

13     Use and trade of the Ship.............................................49

14     Title, registration, name and house flag..............................50

15     Maintenance and operation.............................................51

16     Insurance Undertakings: wreck removal.................................56

17     Powers of Lessor to remedy defaults...................................61

18     Redelivery............................................................62

19     Consumable stores.....................................................63

20     Use of equipment and replacement......................................63

21     Encumbrances: Lessor's undertakings...................................64

22     Loss and damage.......................................................64

23     Salvage...............................................................67

24     Requisition for hire..................................................67

25     Security Provisions...................................................69

26     Termination Events....................................................77

27     Lessor's rights following a Termination Event
       and Mandatory Prepayment Event........................................80

28     Notices...............................................................83

29     Liens and indemnities.................................................84

30     Assignment and sale of Ship...........................................85

31     Increased costs, funding problems and illegality......................86

32     Refinancings..........................................................88

33     Miscellaneous.........................................................89

34     Governing law and jurisdiction........................................91

Schedule 1 List of documents and evidence....................................92

Schedule 2 Form of Delivery Request Notice...................................94

Schedule 3 Form of Protocol of Delivery and Acceptance under Lease...........95

Schedule 4 Financial Schedule................................................96

Schedule 5 Forms of Loss Payable Clause......................................97

Schedule 6 Form of Compliance Certificate....................................98

<PAGE>

THIS LEASE is dated     April 2003 and made BETWEEN:

(1)     GOLAR GIMI  (BERMUDA)  LIMITED (whose name is to be changed to Sovereign
        Gimi Limited),  a company  incorporated in Bermuda whose principal place
        of business is situated at Sovereign House, 298 Deansgate, Manchester M3
        4HH (the "Lessor"); and

(2)     GOLAR GAS HOLDING COMPANY,  INC., a company incorporated in the Republic
        of Liberia  whose  registered  office is  situated  at 80 Broad  Street,
        Monrovia, Republic of Liberia (the "Lessee").

BY WHICH IT IS AGREED as follows :

1       Purpose and definitions

1.1     Purpose

        This Lease sets out the terms and  conditions  upon and subject to which
        the Lessor agrees to lease to the Lessee,  and the Lessee agrees to take
        on lease, the Ship.

1.2     Definitions

        In this Lease, unless the context otherwise requires:

        "Account  Bank" means Nordea Bank  Finland Plc of 8th Floor,  City Place
        House, 55 Basinghall Street, London EC2V 5NB and includes its successors
        in title;

        "Accounting  Period" means an accounting period as defined in section 12
        ICTA;

        "Additional  Amount" has the  meaning  given to that  expression  in the
        Letter of Credit;

        "Additional  Security" means any additional security for the obligations
        of the Lessee under this Lease provided in accordance  with clause 25 in
        form and  content  acceptable  to the Lessor  and,  where the context so
        requires,  includes any replacement of such  additional  security issued
        pursuant to clause 25;

        "Additional  Security Amount" means, at any time, the amount in Sterling
        (as certified by the Lessor whose  certificate  shall, in the absence of
        manifest  error,  be conclusive  and binding on the Lessee) which is the
        value of any  Additional  Security  at such time (but for the purpose of
        the definition of the Applicable  Security Amount and in the case of any
        Additional  Security  provided  by a  Relevant  Bank,  disregarding  any
        Relevant  Bank Change of Law Event or  Relevant  Bank  Illegality  Event
        which may affect the  liability  of the LC Bank to the Lessor in respect
        of the relevant Additional Security at such time);

        "Additional   Security   Documents"  means  all  documents  under  which
        Additional  Security  is  constituted  or  by  which  such  security  is
        evidenced or pursuant to which any person  secures the  provision of any
        Additional Security;

        "Additional  Security  Provider" means any entity  providing  Additional
        Security and,  where the context so requires,  means any entity  issuing
        any replacement Additional Security pursuant to clause 25;

        "Additional  Security Table" has the meaning given to that expression in
        the Financial Schedule;

        "Adjustment  Period" has the  meaning  given to that  expression  in the
        Financial Schedule;

        "Adverse  Event" has the meaning given to that  expression in the Letter
        of Credit;

        "Adverse  Event Notice" has the meaning given to that  expression in the
        Letter of Credit;

        "Agency  and Trust  Deed"  means the  agency and trust deed of even date
        herewith made between the Lessor,  the Other Lessors,  the Lessor Agent,
        the  Lessee,  the  Sub-Lessee,  the Other  Sub-Lessees  and the  Standby
        Purchaser relating to (inter alia) the Lessee Third Party Assignment and
        the Sub-Lessee Third Party Assignment;

        "Annual Financial Statements" means annual:

        (a)     financial  statements of the Lessee, the Manager, the Sub-Lessee
                and each of the Other Sub-Lessees;

        (b)     consolidated financial statements of the Lessee Group; and

        (c)     proforma combined and consolidated  financial  statements of the
                Golar Gas Group,

        each  comprising a profit and loss account and a balance  sheet and cash
        flow statement and audited by the Lessee's Auditors;

        "Applicable  LC  Increased   Amount"  has  the  meaning  given  to  that
        expression in clause 25.8.1;

        "Applicable  Rate"  has the  meaning  given  to that  expression  in the
        Financial Schedule;

        "Applicable  Security Amount" means, at any relevant time, the aggregate
        of the  Letter of  Credit  Amount  and the  Additional  Security  Amount
        attributable to an Additional  Security  Document provided by a Relevant
        Bank less any amount which,  by virtue of any Relevant  Bank  Illegality
        Event and/or  Relevant  Bank Change of Law Event,  the Relevant  Bank is
        relieved from its  obligation to make payment under the Letter of Credit
        or,  as the  case  may be,  the  Additional  Security  Document  at such
        relevant time;

        "Applicable  Security Table" has the meaning given to that expression in
        the Financial Schedule;

        "Approved  Brokers" means Marsh Marine & Energy AS or such other firm of
        insurance  brokers  appointed  by the Lessee as may from time to time be
        approved  in writing by the Lessor for the  purposes of this Lease (such
        approval not to be unreasonably withheld or delayed);

        "Arranger" means Citibank N.A. of 33 Canada Square, Canary Wharf, London
        E14 5LB and includes its successors in title;

        "Arrangement  Fee"  has the  meaning  given  to that  expression  in the
        Financial Schedule;

        "Assumed Rate" has the meaning given to that expression in the Financial
        Schedule;

        "Assumptions"  has the meaning given to that expression in the Financial
        Schedule;

        "Auditors" means the auditors from time to time of the Lessor;

        "Banking  Day"  means a day (other  than a Saturday  or Sunday) on which
        dealings in deposits in Sterling are carried on in the London  Interbank
        Eurocurrency  Market and on which banks are open for  business in London
        (or any other relevant place of payment under clause 8);

        "Borrowed Money" means Indebtedness incurred in respect of:

        (a)     money borrowed or raised and debit balances at banks;

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

        (c)     acceptance or documentary credit facilities;

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

        (e)     deferred  payments for assets or services  acquired  (other than
                assets or services  acquired on normal  commercial  terms in the
                ordinary course of business where payment is deferred by no more
                than one hundred and eighty (180) days);

        (f)     Capitalised Lease Obligations;

        (g)     any other transaction  (including,  without limitation,  forward
                sale or purchase  agreements)  having the commercial effect of a
                borrowing or raising of money;

        (h)     guarantees  in respect  of  Indebtedness  of any person  falling
                within any of (a) to (g) above; and

        (i)     preference  share  capital in the Lessee or any other  member of
                the Golar Gas Group  which is or may be  redeemable  before  the
                full and final discharge of all  Indebtedness and liabilities of
                the Lessee under this Lease;

        "CAA" means the Capital Allowances Act 2001;

        "Capitalised Lease Obligation" of any person means the obligation to pay
        rent or other payment  amounts under a lease of (or other Borrowed Money
        arrangements conveying the right to use) real or personal property which
        is required to be classified and accounted for as a capitalised lease or
        a liability on the face of a balance  sheet of such person in accordance
        with Relevant GAAP (in the case of this Lease and the Other Ship Leases,
        net of an  amount  equal to the  aggregate  of the  Applicable  Security
        Amount and the Applicable  Security Amount (as defined in the Other Ship
        Leases));

        "Cash  Balances"  means,  at any relevant  time,  an amount equal to the
        aggregate amount which is, at such time,  credited to and/or invested in
        the Earnings Accounts;

        "Casualty  Amount"  means  five  million  Dollars  ($5,000,000)  (or the
        equivalent  in any other  currency)  or, if the  context so  requires in
        respect of any single  refurbishment of the Ship to be undertaken by the
        Lessee  or, as the case may be,  the  Sub-Lessee  during  the  period of
        twenty  four (24)  months  from the date of this  Lease,  eight  million
        Dollars ($8,000,000);

        "Change of Law" means, in each case after the date of this Lease:

        (a)     the  introduction,   imposition,   assessment,   application  or
                amendment by any  governmental  authority,  central bank or Tax,
                fiscal,  monetary  or other  authority  of any  applicable  law,
                order,  regulation,  official directive or guideline (whether or
                not having the force of law but, if not having the force of law,
                compliance   with  which  is  regarded  by  banks  and/or  other
                financial  institutions  conducting  business  in  the  relevant
                jurisdiction  as customary  (including,  but not limited to, the
                introduction  of or changeover to the Euro in any  participating
                member state of the European Union); and/or

        (b)     any  change  in, or any new or  further  or  different  official
                interpretation,  administration  or  application  after the date
                hereof of,  any  applicable  law,  order,  regulation,  official
                directive or  guideline  (whether or not having the force of law
                but,  if not having the force of law,  compliance  with which is
                regarded by banks and/or other financial institutions conducting
                business in the relevant jurisdiction as customary) or Generally
                Accepted Accounting Principles; and/or

        (c)     any  compliance  with any  request,  requirement,  directive  or
                guideline  (whether  or not having the force of law but,  if not
                having the force of law,  compliance  with which is  regarded by
                banks and/or other financial institutions conducting business in
                the relevant  jurisdiction  as  customary)  issued by an central
                bank, Tax, fiscal, monetary or governmental authority; and/or

        (d)     the  adoption,  introduction  or variation of, or change in, any
                ruling,  decision,   judgment,  statement  of  policy,  official
                proposal or any other  assessment or  determination  (whether or
                not having the force of law but, if not having the force of law,
                compliance   with  which  is  regarded  by  banks  and/or  other
                financial  institutions  conducting  business  in  the  relevant
                jurisdiction  as  customary) by any court,  central  bank,  Tax,
                fiscal, monetary or governmental authority;

        "Classification"  means the classification +1A1 Tanker for Liquefied Gas
        EO SBM, bis, dat (-10(degree)C) or such other  classification  available
        for liquefied natural gas carriers of the same age and type as the Ship,
        in each case,  with the  Classification  Society as the Lessor shall, at
        the  request of the Lessee,  have agreed in writing  shall be treated as
        the Classification for the purposes of this Lease;

        "Classification   Society"  means  Det  Norske  Veritas  or  such  other
        classification  society  which the Lessor  shall,  at the request of the
        Lessee,  have agreed in writing  shall be treated as the  Classification
        Society for the Ship for the purposes of this Lease;

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

        "Corporation  Tax" means corporation tax in the context of the scheme of
        taxation  contained in the Corporation  Taxes Act (as defined in section
        831 ICTA) or any other Tax on companies imposed in the United Kingdom in
        substitution for corporation tax;

        "Cost of  Lessor's  Management  Time"  means  the  cost of the  Lessor's
        personnel  charged  at  an  amount  of  two  hundred  and  fifty  Pounds
        ((pound)250) per hour for a senior officer of the Lessor and one hundred
        and seventy five pounds  ((pound)175)  per hour for a junior  officer of
        the Lessor,  in each case  excluding  VAT,  escalated at the rate of RPI
        from the Delivery Date;

        "Credit  Rating"  means,  in  respect  of  any  person,  the  unsecured,
        unguaranteed  and  unsubordinated  long term debt  rating of such person
        with the applicable credit rating agency;

        "Credit Review Date" means 31 December 2010;

        "Current Assets" means, on a consolidated  basis, the current assets (as
        determined in accordance with Relevant GAAP) of the Golar Gas Group;

        "Current  Liabilities"  means,  on a  consolidated  basis,  the  current
        liabilities  (as  determined  in accordance  with Relevant  GAAP) of the
        Golar Gas Group;

        "Default Rate" means the rate of interest determined by the Lessor to be
        one per cent (1%) per annum above the  aggregate of the Margin and LIBOR
        for such  period  not  exceeding  six (6) months in respect of which the
        Default  Rate falls to be  determined  as the Lessor  may  determine  in
        amounts  comparable  with the sum in respect of which the  Default  Rate
        falls to be determined  or, where by reason of  circumstances  affecting
        the London Interbank Market generally, deposits in the relevant currency
        are not, in the ordinary  course of business,  available at any relevant
        time in the London Interbank Market, the rate of interest  determined by
        the Lessor to be one per cent (1%) above the aggregate of the Margin and
        the  cost  (expressed  as a  percentage  per  annum)  to the  Lessor  of
        obtaining  funds in the currency and in amounts  comparable with the sum
        in respect of which the Default Rate falls to be determined;

        "Delivery"  means the time when the Lessor shall deliver the Ship to the
        Lessee  pursuant to clause 5; "Delivery Date" means the date (which must
        be a Banking Day) on which Delivery shall occur;

        "Delivery  Request Notice" means a notice  substantially in the terms of
        Schedule 2;

        "Determination"  have the  meaning  given to  those  expressions  in the
        Financial Schedule;

        "DOC" means a document of compliance issued to an Operator in accordance
        with the ISM Code;

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

        "Earnings  Account"  means  any of the  accounts  of the  Lessee  or the
        Sub-Lessee  or the  Other  Sub-Lessees  of the Ship or any of the  Other
        Ships  designated in writing by the Lessor (based,  where  applicable on
        information  received  from  the  First  Security  Agent  or the  Second
        Security Agent) to be an Earnings Account for the purposes of this Lease
        (and includes any fixed term deposit contract or account associated with
        such  account) and  "Earnings  Accounts"  means all of such accounts and
        fixed term deposit contracts and/or accounts;

        "EBITDA" means, for any period, the earnings before interest,  taxes and
        depreciation and amortisation (calculated as income from operations plus
        any  depreciation  and  amortisation,  Interest  Expense,  and  taxes on
        overall net income  deducted in  calculating  income from  operations in
        respect of such period) of the Golar Gas Group  determined in accordance
        with Relevant GAAP on a consolidated basis;

        "Economically  Burdensome"  has the meaning given to that  expression in
        the Financial Schedule;

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

        "Environmental  Affiliate"  means any agent or employee of the Lessee or
        any other Relevant Party or any person having a contractual relationship
        with the  Lessee  or any other  Relevant  Party in  connection  with any
        Relevant  Ship  or  its  operation  or  the  carriage  of  cargo  and/or
        passengers  thereon and/or the provision of goods and/or  services on or
        from the Relevant Ship;

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

        "Environmental Claim" means:

        (a)     any  and  all  enforcement,   clean-up,  removal  or  any  other
                governmental or regulatory  action or order or claim  instituted
                or made pursuant to any  Environmental  Law or any Environmental
                Approval or resulting from a Spill; and

        (b)     any claim made by any other person relating to a Spill;

        "Environmental Incident" means any Spill:

        (a)     from any Relevant Ship; or

        (b)     from any other vessel in circumstances where:

                (i)     the Ship or the Lessor,  the Lessee,  the  Sub-Lessee or
                        the  Manager  may  be  liable  to  Environmental  Claims
                        arising from the Spill; and/or

                (ii)    the  Ship  may be  arrested,  attached  or  attached  in
                        connection with any such Environmental Claims;

        "Environmental Laws" means laws,  regulations and conventions concerning
        pollution or protection of human health or the environment;

        "Financial    Schedule"    means    Schedule   4   and    includes   its
        appendices/annexes;

        "Financial  Year" has the meaning given to that expression in Schedule 1
        of the Interpretation Act 1978;

        "First  Security  Agent" means Den norske Bank ASA of Stranden 21, Oslo,
        Norway and includes its successors in title;

        "Fixed Liability Amount" has the meaning given to that expression in the
        Letter of Credit;

        "Free  Available  Cash" means,  at any relevant  time, the amount of the
        Cash  Balances,  freely  available  for  use by the  Lessee  and/or  the
        Sub-Lessee   and/or   any   of  the   Other   Sub-Lessees   which   may,
        notwithstanding any Encumbrance,  right of set-off or agreement with any
        other party, be withdrawn  and/or encashed and used by it for any lawful
        purpose without  restriction  (save for restrictions that may be imposed
        by the First Security Agent or the Second Security Agent);

        "Golar  Gas  Group"  means  the  Lessee,  the  Sub-Lessee  and the Other
        Sub-Lessees;

        "GOLAR  FREEZE" means the liquefied  natural gas carrier  "GOLAR FREEZE"
        registered  under  British flag in the  ownership of the relevant  Other
        Lessor;

        "GOLAR  SPIRIT" means the liquefied  natural gas carrier  "GOLAR SPIRIT"
        registered  under  British flag in the  ownership of the relevant  Other
        Lessor;

        "Gotaas  Larsen"  means Gotaas  Larsen  Shipping  Corp.,  a  corporation
        incorporated in the Republic of Liberia having its registered  office at
        80  Broad  Street,  Monrovia,  Republic  of  Liberia  and  includes  its
        successors in title;

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

        "HILLI" means the liquefied natural gas carrier "HILLI" registered under
        British flag in the ownership of the relevant Other Lessor;

        "Holding  Company"  means any  holding  company  within  the  meaning of
        section 736 of the Companies Act 1985;

        "ICTA" means the Income and Corporation Taxes Act 1988;

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

        "Indemnified  Person"  means each  member of the Lessor  Group and their
        respective officers, directors, employees, servants and agents;

        "Indexation  Relief Letter" means a side letter to this Lease in respect
        of indexation relief, to be executed by the Lessor and the Lessee;

        "Initial Security Table" has the meaning given to that expression in the
        Financial Schedule;

        "Insolvency  Event"  means,  in  relation  to the  Lessee or the  Lessee
        Parent,  any of the  events  referred  to in  clauses  26.1.8 to 26.1.14
        inclusive occurring in respect of the Lessee or, as the case may be, the
        Lessee Parent;

        "Insurances"  means all  policies  and  contracts  of  insurance  (which
        expression  includes  all  entries  of  the  Ship  in a  protection  and
        indemnity or war risks  association)  which are from time to time during
        the Lease  Period in place or taken out or  entered  into by the  Lessee
        pursuant  to  clause  16  (or,  during,  the  Sub-Lease  Period,  by the
        Sub-Lessee)  for the  benefit of the Lessee  alone or the Lessee and the
        Lessor and,  during the Sub-Lease  Period,  the Sub-Lessee in respect of
        the Ship (but  excluding any policies and  contracts of insurance  taken
        out or entered into for the sole benefit and, save as provided in clause
        16.1.1,  at the cost of the  Lessor  and  without  being  subject to any
        indemnity  provision  under  this  Lease  (provided  such  policies  and
        contracts  of insurance do not affect  recoveries  under the  Insurances
        effected by the Lessee and/or the Sub-Lessee) or otherwise  howsoever in
        connection with the Ship and all benefits thereof  (including  claims of
        whatsoever nature and return of premiums);

        "Interest  Expense" means, for any period,  interest charges and related
        expenses for such period of the Golar Gas Group determined in accordance
        with Relevant GAAP on a consolidated basis;

        "Irrecoverable  VAT" has the  meaning  given to that  expression  in the
        Financial Schedule;

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

        "KHANNUR" means the liquefied natural gas carrier  "KHANNUR"  registered
        under British flag in the ownership of the relevant Other Lessor;

        "LC Bank" means Canadian  Imperial Bank of Commerce,  a Canadian company
        acting out of its London branch at Cottons Centre,  Cottons Lane, London
        SE1 2QL and,  where the  context  so  requires,  means  such  other bank
        acceptable  to the  Lessor  as may  replace  such  bank as an "LC  Bank"
        pursuant to clause 25 and includes its successors in title;

        "Lease  Documents"  means  this  Lease,  the  Proceeds  Deed,  the Third
        Priority  Three Party Deed,  the Agency and Trust Deed,  any  Additional
        Security  Documents  executed  by the Lessee and any other  document  to
        which the  Lessee is party and which the  Lessor  and the  Lessee  agree
        shall be a "Lease  Document"  for the  purposes  of this  Lease  and all
        notices,  consents,  certificates  and other documents and agreements to
        which the  Lessee is party  issued  or, as the case may be, to be issued
        pursuant to any of the foregoing;

        "Lease Fee" has the meaning  given to that  expression  in the Financial
        Schedule;

        "Lease  Obligations" means all moneys,  obligations and liabilities from
        time to time  owing or  payable,  incurred  or  assumed by the Lessee in
        favour of the Lessor under or pursuant to this Lease and the other Lease
        Documents;

        "Lease  Period"  means  the  period  during  which the  Lessee  shall be
        entitled to the possession  and use of the Ship in accordance  with this
        Lease;

        "Legal  Fee"  means the fees and  disbursements  of Messrs  Norton  Rose
        acting as counsel to the  Lessor,  together  with the fees in respect of
        any  correspondent  counsel  instructed  by Messrs  Norton Rose with the
        approval of the Lessee;

        "Lessee" means Golar Gas Holding Company,  Inc., a Liberian  corporation
        having its registered office at 80 Broad Street,  Monrovia,  Republic of
        Liberia and includes its successors in title;

        "Lessee  Group"  means  together  the  Lessee  Parent  and  each  of its
        Subsidiaries from time to time and for the purposes of "Annual Financial
        Statements"  and "Quarterly  Financial  Statements"  (and the expression
        "Lessee  Group"  where used in such  definitions)  any company or entity
        whose accounts are to be consolidated with those of the Lessee Parent in
        accordance  with  Relevant  GAAP shall be treated as a Subsidiary of the
        Lessee Parent;

        "Lessee Parent" means Golar LNG Limited,  a Bermudan  company having its
        principal  place of business at  Par-la-Ville  Place,  Second Floor,  14
        Par-la-Ville  Road,  Hamilton  HM08,  Bermuda,  and being  the  indirect
        Holding Company of the Lessee and includes its successors in title;

        "Lessee Parent  Guarantee" means the guarantee of the obligations of the
        Lessee  under this Lease  issued or (as the context  may  require) to be
        issued by the Lessee Parent in favour of the Lessor in the agreed form;

        "Lessee's Auditors" means  PricewaterhouseCoopers or another first class
        firm of international accountants;

        "Lessee's  Quiet  Enjoyment  Letter" means the letter of quiet enjoyment
        executed or (as the context may  required)  to be extended by the Lessee
        in favour of the Time Charterer;

        "Lessor" means Golar Gimi (Bermuda) Limited (whose name shall be changed
        to Sovereign Gimi Limited),  a Bermudan company whose principal place of
        business is at Sovereign  House,  298  Deansgate,  Manchester M3 4HH and
        includes its successors in title;

        "Lessor  Agent"  means  Sovereign  Finance Plc of Sovereign  House,  298
        Deansgate, Manchester M3 4HH;

        "Lessor Group" means the group of companies from time to time comprising
        the Lessor Parent and all of its Subsidiaries;

        "Lessor  Mortgage"  means the first priority  statutory  mortgage of the
        Ship and  collateral  deed of covenant  (containing an assignment by the
        Lessor of its interest in the  Insurances  (other than the Insurances in
        respect  of  protection  and  indemnity  and other  third  party  risks)
        executed or (as the context may require) to be executed by the Lessor in
        favour of the Lessee in the agreed form as security for its  obligations
        to pay certain sums to the Lessee under this Lease;

        "Lessor Parent" means Alliance & Leicester plc;

        "Lessor Payment  Account" means the account of the Lessor referred to in
        clause 8.1;

        "Lessor Proceeds Accounts" means any proceeds accounts opened or, as the
        context  may  require,  to be opened by the  Lessor  pursuant  to and in
        accordance with clause 2.8 of the Proceeds Deed;

        "Lessor Proceeds Accounts  Assignment" means the assignment  executed or
        (as the context  may  require) to be executed by the Lessor in favour of
        the Lessee in respect of the Lessor  Proceeds  Accounts,  and, where the
        context  requires,  includes  any Lessor  Proceeds  Accounts  Assignment
        executed pursuant to clause 8.6 of the Proceeds Deed;

        "Lessor  Support  Letters"  means the support  letters issued or (as the
        context may require) to be issued by the Lessor Parent to (inter alios):

        (a)     the Lessee,  the First  Security  Agent and the Second  Security
                Agent in respect of,  amongst  other  things,  the ownership and
                obligations  of the  Lessor  under  this  Lease  and  the  other
                Transaction Documents to which it is a party in the agreed form;
                and

        (b)     the Time  Charterer in respect of the  obligations of the Lessor
                under the Quiet Enjoyment Letter;

        "Lessor's  Encumbrance" means any Encumbrance which arises or is created
        solely as a result of:

        (a)     any  obligation of the Lessor or a member of the Lessor Group or
                any claim  against  or  affecting  the Lessor or a member of the
                Lessor  Group  (other than  (except for the  purposes of clauses
                3.6.3 and 21) a claim for or obligation in respect of Taxes or a
                claim or obligation in respect of which the liability to pay the
                same, or the amount of the same,  is then being  disputed by the
                Lessor or a member of the  Lessor  Group in good faith and which
                will not cause any interference to the use, possession and quiet
                enjoyment of the Ship by the Lessee during the Lease Period), in
                each case, that is not related to, or does not arise directly or
                indirectly as a result of, the transactions contemplated by this
                Lease  or any  of the  other  Transaction  Documents  including,
                without limitation,  any Encumbrance which arises as a result of
                the  operation of any vessel  (other than the Ship and the Other
                Ships) of which any member of the Lessor Group is the owner or a
                disponent owner;

        (b)     any Taxes  imposed  upon the  Lessor  or a member of the  Lessor
                Group which are not  required to be  indemnified  against by the
                Lessee or by any other  person  under this Lease or under any of
                the other  Transaction  Documents  (other  than  (except for the
                purposes of clauses  3.6.3 and 21) Taxes in respect of which the
                liability to pay the same,  or the amount of the same,  is being
                disputed  by the Lessor or a member of the Lessor  Group in good
                faith and which  will not  cause  any  interference  to the use,
                possession and quiet  enjoyment of the Ship by the Lessee during
                the Lease Period);

        (c)     any act or  omission  of the  Lessor or a member  of the  Lessor
                Group (but not of any member of the Lessee Group acting as agent
                or representative of the Lessor or a member of the Lessor Group)
                that is not related  to, or does not arise  directly as a result
                of, the  transactions  contemplated  by this Lease or any of the
                other Transaction Documents;

        (d)     any act or  omission  of the  Lessor or a member  of the  Lessor
                Group (but not of any member of the Lessee Group acting as agent
                or representative of the Lessor or a member of the Lessor Group)
                constituting  a breach by the Lessor of its express  obligations
                under this Lease or any of the other Transaction Documents; or

        (e)     any act or omission of the Lessor  which  constitutes  the gross
                negligence or wilful misconduct of the Lessor;

        "Letter of Credit"  means the Letter of Credit issued or (as the context
        may  require)  to be issued by the LC Bank in favour of the  Lessor in a
        form and in an amount acceptable to the Lessor and, where the context so
        requires,  means any replacement  letter of credit executed  pursuant to
        clause  25,  such  letter of credit to be for a period  expiring  on the
        Required Letter of Credit Expiry Date;

        "Letter of Credit  Amount"  means,  at any  relevant  time,  the maximum
        amount  of the  liability  of the LC Bank to the  Lessor  under,  and as
        determined  pursuant to, the Letter of Credit at such time (but, for the
        purpose of the definition of Applicable Security Amount disregarding any
        Relevant  Bank Change of Law Event or  Relevant  Bank  Illegality  Event
        which may affect the  liability  of the LC Bank to the Lessor  under the
        Letter of Credit at such relevant time);

        "Letter of Credit Expiry Date" means,  at any relevant time, the date on
        which the Letter of Credit expires in accordance with its terms;

        "LIBOR"  has the  meaning  given  to that  expression  in the  Financial
        Schedule;

        "Loss Payable  Clauses"  means the  provisions  regulating the manner of
        payment  of  sums  receivable  under  the  Insurances  which  are  to be
        incorporated  in the  relevant  insurance  documents,  such Loss Payable
        Clauses to be in the form set out in  Schedule 6 or in such forms as may
        from time to time be agreed in writing by the Lessor;

        "Management  Agreement"  means  an  agreement  entered  into  or (as the
        context may require) to be entered into between the  Sub-Lessee  and the
        Manager on terms  acceptable to the Lessor  providing for the Manager to
        provide services relating to the commercial and technical management and
        crewing of the Ship during the Sub-Lease Period;

        "Manager" means Golar  Management (UK) Limited,  an English company with
        company  number  04396172  having its principal  place of business at 30
        Marsh Wall, London E14 9TP and includes its successors in title;

        "Manager's  Undertaking"  means an  undertaking  in  respect of the Ship
        executed or (as the  context may  require) to be executed by the Manager
        in favour of the Lessor Agent in respect of the Ship in the agreed form;

        "Mandatory  Prepayment  Event" means any of the events or  circumstances
        described in clause 26.2;

        "Manuals and Technical  Records"  means all such books,  records,  logs,
        manuals,  handbooks,  technical  data,  drawings and other materials and
        documents (whether or not kept or required to be kept in compliance with
        any applicable laws or the requirements of the  Classification  Society)
        relating to the Ship;

        "Margin" has the meaning given to the expression  "Percentage Return" in
        the Financial Schedule;

        "Maximum  Unsecured Strip Liability  Amount" means the maximum unsecured
        Strip Liability  Amount permitted under this Lease as determined for any
        Security  Period by  reference to the amounts set out in column 4 of the
        Initial  Security Table for such Security  Period set out in column 1 of
        the Initial Security Table;

        "Minimum  Free  Available  Cash"  means an amount  equal to twenty  five
        million Dollars ($25,000,000);

        "Minimum LC Bank  Credit  Rating"  means,  in relation to the Initial LC
        Bank or any Relevant Bank, A3 "with negative  credit watch" by Moodys or
        A- by Standard & Poor's;

        "month" means a period beginning in one (1) calendar month and ending in
        the next calendar month on the day numerically  corresponding to the day
        of the  calendar  month on which it  started,  provided  that (a) if the
        period  started on the last Banking Day in a calendar  month or if there
        is no such  numerically  corresponding  day,  it  shall  end on the last
        Banking  Day in such next  calendar  month  and (b) if such  numerically
        corresponding  day is not a Banking  Day,  the  period  shall end on the
        preceding  Banking Day and  "months"  and  "monthly"  shall be construed
        accordingly;

        "Moodys"  means Moodys  Investors  Services  Inc. or its  successors  in
        title;

        "Net  Debt"  means,  on a  consolidated  basis,  an amount  equal to the
        aggregate  of all  Borrowed  Money of the  Golar Gas  Group  other  than
        Subordinated Debt minus Free Available Cash;

        "Net Sale Proceeds" means, in relation to a sale of the Ship, the amount
        of all consideration actually received by the Lessor from a purchaser on
        the sale of the Ship and any non-refundable  deposit irrevocably paid to
        the Lessor by a person  acquiring or proposing to acquire the Ship under
        a contract or offer to purchase or otherwise  acquire the Ship which has
        been withdrawn,  terminated or cancelled or has lapsed,  less any VAT in
        respect  of the sale of the Ship for which the  Lessor  is  required  to
        account,  the  Lessor's  expenses  (excluding  Recoverable  VAT on  such
        expenses)  reasonably  incurred in connection  with such sale including,
        without limitation,  (where applicable) broker's  commissions,  Lessor's
        marketing expenses, legal costs, agency fees and port charges, insurance
        premiums and stamp duties,  registration  fees and any expenses relating
        to the repair of the Ship (including putting the Ship in class) intended
        to restore the Ship to the condition  required by this Lease or pursuant
        to the  provisions of any sale and purchase  agreement in respect of the
        sale of the Ship;

        "Net  Total  Loss  Proceeds"  means the  Total  Loss  Proceeds  actually
        received by the Lessor from the  insurers  following a Total Loss of the
        Ship,  less any expenses  (excluding  Recoverable VAT on such expenses),
        taxes or duties incurred by the Lessor in connection with the collection
        of such proceeds;

        "Notified  Termination Date" has the meaning given to that expression in
        clause 3.3.1;

        "Other Lessor" means:

        (a)     Golar Freeze  (Bermuda)  Limited (whose name shall be changed to
                Sovereign Freeze Limited) in respect of "GOLAR FREEZE";

        (b)     Golar Spirit  (Bermuda)  Limited (whose name shall be changed to
                Sovereign Spirit Limited) in respect of "GOLAR SPIRIT";

        (c)     Golar Hilli  (Bermuda)  Limited  (whose name shall be changed to
                Sovereign Hilli Limited) in respect of "HILLI"; and

        (d)     Golar Khannur  (Bermuda) Limited (whose name shall be changed to
                Sovereign Khannur Limited) in respect of "KHANNUR",

        and "Other Lessors" means all of them;

        "Other  Ships"  means  "GOLAR  FREEZE",  "GOLAR  SPIRIT",   "HILLI"  and
        "KHANNUR" and "Other Ship" means any of them;

        "Other Ship Leases" means the lease  agreements  made or (as the context
        may  require)  to be made  between  the Other  Lessors and the Lessee in
        respect of the Other Ships;

        "Other Ship Relevant Documents" means all of the "Relevant Documents" as
        that expression is defined in each of the Other Ship Leases;

        "Other  Sub-Lessees"  has the meaning  given to that  expression  in the
        Proceeds Deed;

        "Operator"  means any person who is at any time during the Lease  Period
        concerned in the  operation of the Ship and falls within the  definition
        of "Company" set out in the ISM Code;

        "Original  Time Charter" means the time charter dated 25 October 2001 as
        amended by Addendum No. 1 dated 5 February  2003,  both made between the
        Time Charterer and Golar Gimi Inc.  pursuant to which the Time Charterer
        has taken the Ship on time charter for a period from the Ship's delivery
        thereunder and expiring between 1 January 2010 and 31 December 2010 with
        options for the Time  Charterer  to extend the term  thereof for two (2)
        additional five (5) year periods,  plus a subsequent option for the Time
        Charterer  to extend  the term  thereof up to the  Ship's  next  ensuing
        special survey;

        "Permitted Encumbrance" means:

        (a)     any Lessor's Encumbrance;

        (b)     any  Encumbrance  for  Taxes  either  not yet  assessed  or,  if
                assessed,  not yet due and  payable or being  contested  in good
                faith by appropriate  proceedings  (and for the payment of which
                adequate  reserves  have  been  provided)  so long  as any  such
                proceedings  or the continued  existence of such  Encumbrance do
                not involve any  likelihood of the sale,  forfeiture or loss of,
                or of any interest in the Ship;

        (c)     liens  arising in the ordinary  course of business by statute or
                by  operation  of law in  respect of  obligations  which are not
                overdue  or  which  are  being   contested   in  good  faith  by
                appropriate  proceedings  (and for the payment of which adequate
                reserves have been provided) so long as any such  proceedings or
                the  continued  existence  of  such  lien  do  not  involve  any
                likelihood  of  the  sale,  forfeiture  or  loss  of,  or of any
                interest in the Ship;

        (d)     any  Encumbrance  arising  out of  claims,  judgments  or events
                against the Lessee  which are being  contested  in good faith or
                which are the  subject of a pending  appeal (and for the payment
                of which  adequate  reserves  have been provided or, as the case
                may be, which the Lessor is satisfied are covered by Insurances)
                so long as any such claims, judgments or the continued existence
                of such Encumbrance do not involve in the reasonable  opinion of
                the Lessor any likelihood of the sale, forfeiture or loss of, or
                of any interest in the Ship;

        (e)     Permitted Liens;

        (f)     any Encumbrance  granted pursuant to the Transaction  Documents;
                or

        (g)     any other Encumbrance,  the creation of which has been expressly
                permitted in writing by the Lessor;

        "Permitted Liens" means:

        (a)     any Ship repairer's or outfitter's possessory lien for a sum not
                (except with the prior written consent of the Lessor)  exceeding
                the Casualty  Amount unless the Lessor has received  evidence to
                its  satisfaction  that the cost of the work in respect of which
                the  lien  may  arise  is   covered  by   insurances   on  terms
                satisfactory to the Lessor (in its absolute discretion) or;

        (b)     any lien on the Ship for  Master's,  officer's  or crew's  wages
                outstanding in the ordinary course of trading; and

        (c)     any lien for salvage or general average;

        "Pollutant"  means  and  includes  oil  and  its  products,   any  other
        polluting,  toxic or hazardous  substance and any other  substance whose
        release into the  atmosphere is regulated or penalised by  Environmental
        Laws;

        "Primary  Period"  means the period from and including the Delivery Date
        and  terminating,  subject to the terms and conditions of this Lease, on
        the earlier of (a) the date falling twenty (20) years after the Delivery
        Date and (b) the date of  termination  of the  leasing of the Ship under
        this Lease;

        "Primary  Rental"  has  the  meaning  given  to that  expression  in the
        Financial Schedule;

        "Primary  Rental Date" has the meaning  given to that  expression in the
        Financial Schedule;

        "Proceeds  Deed"  means the  agreement  entered or (as the  context  may
        require)  to be entered  into  between  (inter  alios) the  Lessor,  the
        Lessee, the Sub-Lessee,  the Account Bank, the Lessor Agent, the Standby
        Purchaser, the First Security Agent and the Second Security Agent in the
        agreed form;

        "Protocol of Delivery and Acceptance" means the protocol of delivery and
        acceptance in relation to the Ship in the form of Schedule 3;

        "Qualifying  Replacement  Bank"  means a Bank  incorporated  in a Zone A
        country (as the terms  "Bank" and "Zone A" are  defined in the  Guidance
        Notes to Bank of England  Return BSD2) with a Credit  Rating of not less
        than the Minimum LC Bank Credit Rating and otherwise approved in writing
        by the  Lessor  (such  approval  not  to be  unreasonably  withheld  but
        withholding  of  such  approval  it is  agreed  shall  be  deemed  to be
        reasonable where, inter alia, for internal credit reasons, the Lessor is
        unable to  accept  any  additional  credit  exposure  to such bank in an
        amount  equal to the  liability  which  such  bank will be  assuming  in
        relation to the transactions contemplated by this Lease);

        "Quarterly Financial Statements" means quarterly:

        (a)     financial  statements of the Lessee, the Manager, the Sub-Lessee
                and each of the Other Sub-Lessees;

        (b)     consolidated financial statements of the Golar LNG Group; and

        (c)     pro-forma  consolidated and combined financial statements of the
                Golar Gas Group,

        prepared as at 31 March,  30 June and 30 September (but not 31 December)
        in each year (or three (3),  six (6) or nine (9) (but not  twelve  (12))
        months after the commencement of the Lessee's  accounting  period should
        its accounting reference date be changed, with the prior written consent
        of the Lessor from 31 December) comprising a profit and loss account and
        a balance sheet and a cash flow statement;

        "Quiet  Enjoyment  Letter(s)"  means the  letter(s)  of quiet  enjoyment
        executed or (as the context may require) to be executed by (inter alios)
        the Lessor and/or the Lessor Agent in favour of, and agreed, by the Time
        Charterer pursuant to the Time Charter;

        "Rated Time  Charterer"  has the  meaning  given to that  expression  in
        clause 25.6;

        "Recoverable VAT" means Value Added Tax which is not Irrecoverable VAT;

        "Relevant  Bank"  means  the LC Bank  and/or,  as the case  may be,  any
        Additional Security Provider (other than an Additional Security Provider
        which is a member of the Lessee Group);

        "Relevant  Bank Change of Law Event"  means,  in respect of any Relevant
        Bank,  an event or  circumstance  arising  by  virtue of a Change of Law
        which  requires or, in the reasonable  opinion of the Lessor,  will when
        implemented   require  the  Relevant  Bank  to  make  any  deduction  or
        withholding  in  respect  of Taxes  from any  payment  to be made to the
        Lessor under any of the Relevant  Bank  Documents to which such Relevant
        Bank is a party and/or which would  otherwise  cause the amounts payable
        by such  Relevant  Bank to the Lessor  under any of such  Relevant  Bank
        Documents  to be less than the amount  which would have been payable but
        for such event or circumstance (save where such event or circumstance is
        due to a Relevant Bank Event);

        "Relevant Bank Documents"  means, in relation to any Relevant Bank, each
        of the  documents  executed  from time to time by such  Relevant Bank as
        security for the  obligations  and  liabilities of the Lessee under this
        Lease or otherwise in connection with this Lease;

        "Relevant Bank Event" means, in respect of any Relevant Bank, any of the
        following events:

        (a)     any Relevant  Bank is unable to pay its debts within the meaning
                of section 123(1)(a), (b), (e) or (2) of the Insolvency Act 1986
                or  becomes  insolvent  or stops  or  suspends  making  payments
                (whether of principal  or  interest)  with respect to all or any
                class of its debts or announces an intention to do so; or

        (b)     any petition is presented or other step is taken for the purpose
                of  winding  up  such  Relevant  Bank  or an  order  is  made or
                resolution passed for the winding up of such Relevant Bank which
                remains  unstayed or a notice is issued  convening a meeting for
                the  purpose  of  passing  any  such  resolution  which  remains
                unstayed; or

        (c)     any petition is presented or other step is taken for the purpose
                of the  appointment  of an  administrator  of such Relevant Bank
                which  remains  unstayed or an  administration  order is made in
                relation to such Relevant Bank; or

        (d)     any  administrative  or  other  receiver  is  appointed  of such
                Relevant  Bank or any part of its assets and/or  undertaking  or
                any other steps are taken to enforce any Encumbrance over all or
                any material (in the  reasonable  opinion of the Lessor) part of
                the assets of such Relevant Bank; or

        (e)     any steps are taken, or negotiations commenced, by such Relevant
                Bank  or by any  of its  creditors  with a view  to the  general
                readjustment or rescheduling of all or part of its  indebtedness
                or  to  proposing  any  kind  of   composition,   compromise  or
                arrangement   involving  such  Relevant  Bank  and  any  of  its
                creditors; or

        (f)     there  occurs,  in relation to such Relevant Bank in any country
                or  territory  in  which  it  carries  on  business  or  to  the
                jurisdiction  of whose courts any part of its assets is subject,
                any  event  which,  in the  reasonable  opinion  of the  Lessor,
                appears in that country or territory to correspond with, or have
                an effect  equivalent  or similar to, any of those  mentioned in
                paragraphs  (a) to (d)  (inclusive)  above or otherwise  becomes
                subject,  in any such country or territory,  to the operation of
                any law relating to insolvency, bankruptcy or liquidation; or

        (g)     such  Relevant Bank fails to pay any sum payable by it under the
                Relevant  Bank  Documents to which it is a party at the time, in
                the currency and in the manner  stipulated in such Relevant Bank
                Documents  (having  regard to any grace  periods  applicable  to
                payments contained in such Relevant Bank Documents) and such sum
                remains unpaid;

        "Relevant Bank Illegality Event" means, in respect of any Relevant Bank,
        an event or circumstance  which causes or, in the reasonable  opinion of
        the  Lessor,  will  when  implemented  cause  any of the  Relevant  Bank
        Documents  executed by such  Relevant Bank to become at any time and for
        any reason illegal,  invalid or  unenforceable  or otherwise to cease to
        remain  in full  force or  effect  or makes it  illegal,  impossible  or
        unlawful  at any  time  for  such  Relevant  Bank to  fulfil  any of the
        covenants and obligations  expressed to be assumed by such Relevant Bank
        in the Relevant Bank Documents executed by such Relevant Bank or for the
        Lessor to  exercise  the rights or any of them vested in it under any of
        the Relevant  Bank  Documents  executed by such Relevant Bank but in any
        such case other than in circumstances where, in relation to the Relevant
        Bank, the relevant event or circumstance  arises by reason of a Relevant
        Bank Event in respect of the Relevant Bank;

        "Relevant Bank Security" means:

        (a)     in relation to the LC Bank, the Letter of Credit; and

        (b)     in relation to any Additional  Security  Provider which is not a
                member of the Lessee Group, the Additional  Security provided by
                such Additional Security Provider;

        "Relevant  Documents" means the Lease Documents,  the Standby Documents,
        the Management  Agreement,  the Lessee Parent  Guarantee,  the Manager's
        Undertaking,  the Third Sub-Lessee Share Security, the Letter of Credit,
        any Additional Security Documents, the Quiet Enjoyment Letter, the Third
        Earnings  Account  Security,  the  Supplemental  Agreement and any other
        document or instrument from time to time executed as a guarantee  and/or
        security for the obligations of the Lessee and/or any sums of money from
        time to time owing whether actually or  contingently,  under or pursuant
        to  this  Lease  or any of the  other  Lease  Documents  and  any  other
        documents  supplemental  to any of them of which the parties  agree from
        time to time shall be Relevant  Documents  for the purpose of this Lease
        and  all  notices,  consents,   certificates  and  other  documents  and
        agreements  issued or, as the case may be, to be issued  pursuant to any
        of the foregoing;

        "Relevant Event" means any Termination Event or any Mandatory Prepayment
        Event or any event  which after the giving of notice or lapse of time or
        the  satisfaction of any other  condition (or any  combination  thereof)
        would constitute a Termination Event or a Mandatory Prepayment Event;

        "Relevant  GAAP"  means  accounting  principles,   concepts,  bases  and
        policies generally adopted and accepted in the respective  jurisdictions
        in which the  Lessee,  the  Sub-Lessee,  the Other  Sub-Lessees  and the
        Lessee  Parent are  required to produce and file  accounts  from time to
        time;

        "Relevant  Jurisdiction"  means any  jurisdiction  in which or where any
        Relevant Party is  incorporated,  resident,  domiciled,  has a permanent
        establishment,  carries on, or has a place of business or to which it is
        otherwise effectively connected;

        "Relevant  Party" means any of the Lessee,  the  Sub-Lessee,  the Lessee
        Parent,  the  Manager or any other party which is a member of the Lessee
        Group who is a party to any of the other Relevant Documents;

        "Relevant Period" means:

        (a)     in relation to a Relevant Bank Illegality  Event,  the period of
                sixty  (60)  days from the  occurrence  or  announcement  of the
                Relevant Bank Illegality  Event or, if shorter,  the period from
                the occurrence or  announcement of such Relevant Bank Illegality
                Event up to the  date  falling  five (5) days  prior to the date
                upon which the Relevant Bank Illegality Event is to take effect;
                and

        (b)     in relation to a Relevant  Bank Change of Law Event,  the period
                of sixty (60) days from the  occurrence or  announcement  of the
                Relevant  Bank  Change of Law Event or, if  shorter,  the period
                from the occurrence or announcement of such Relevant Bank Change
                of Law Event up to the date  falling  five (5) days prior to the
                date upon which  such  Relevant  Bank  Change of Law Event is to
                take place;

        "Relevant  Security  Agent" has the meaning given to that  expression in
        the Proceeds Deed;

        "Relevant  Shareholder"  has the  meaning  given to that  expression  in
        clause 2.2.10;

        "Relevant  Ship" means the Ship,  the Other  Ships and any other  vessel
        from  time to time  (whether  before  or after  the date of this  Lease)
        owned,  managed or crewed by, or leased to the Lessee or the  Sub-Lessee
        for which that person has or may have  responsibility for liabilities or
        claims resulting from  non-compliance with Environmental Laws and/or the
        occurrence of an Environmental Incident;

        "Rental"  has the  meaning  given to that  expression  in the  Financial
        Schedule;

        "Required LC Amount" means an amount equal during each  Security  Period
        shown in the Applicable  Security Table to the Total Security Amount for
        and during each such  Security  Period minus the  corresponding  Maximum
        Unsecured  Strip  Liability  Amount  for and during  each such  Security
        Period;

        "Required  Letter of Credit Expiry Date" means the date falling ten (10)
        days after the expiry of the Primary Period;

        "Required  Security  Amount"  means,  in relation to each new Additional
        Security Table provided in accordance  with paragraph 9 of the Financial
        Schedule, the amount shown in column (6) of that new Additional Security
        Table and, where additional security is required to be provided pursuant
        to clause 25.2 by reference  to such  amount,  ignoring for this purpose
        the fact that such amount is shown as a negative  figure for the purpose
        of that new Additional Security Table;

        "Requisition Compensation" means all sums of money or other compensation
        from time to time payable in respect of the  Compulsory  Acquisition  of
        the Ship;

        "RPI"  has  the  meaning  given  to  that  expression  in the  Financial
        Schedule;

        "Secondary  Period"  means the  period  for  which  the Lease  Period is
        extended in accordance with clause 3.2;

        "Secondary  Rental"  has the  meaning  given to that  expression  in the
        Financial Schedule;

        "Second  Security Agent" means Nordea Bank Norge ASA of  Middlethunsgate
        17, 0107 Oslo, Norway and includes its successors in title;

        "Security  Period"  has the  meaning  given  to that  expression  in the
        Financial Schedule;

        "Ship"  means  the   liquefied   natural  gas  carrier   "GIMI"   having
        International  Maritime  Organisation  Number 7382732  registered in the
        name of the Lessor under the British flag with  Official  Number  905533
        and includes any share or interest  therein and her engines,  machinery,
        boats,   tackle,   outfit,   equipment,   spare  gear,   belongings  and
        appurtenances  whether on board or ashore, (but excluding  consumable or
        other stores and provisions,  bunkers, domestic fuel, lubricants, rented
        or leased equipment and charterer's and sub-charterer's additions) which
        are property of the Lessor on the Delivery  Date or become  installed on
        the Ship thereafter or which, having been removed therefrom,  remain the
        property of the Lessor pursuant to this Lease, together with any and all
        substitutions therefor and all additions,  improvements and replacements
        and removals  thereof from time to time made in or to her in  accordance
        with the provisions of this Lease and, where the context  permits "Ship"
        shall include the Manual and Technical Records;

        "SMC"  means a safety  management  certificate  issued in respect of the
        Ship in accordance with the ISM Code;

        "Spill" means any emission,  spill,  release or discharge of a Pollutant
        from any Relevant Ship into the environment;

        "Standard & Poor's" means Standard & Poor's Rating Services and includes
        its successors in title;

        "Standby  Documents" means the Standby Put Option  Agreement,  the Third
        Standby  Purchaser   Assignment,   the  Third  Standby  Purchaser  Share
        Security,  the Standby Lease Agreement,  the Standby Rental  Assignment,
        the Third Standby  Mortgage and any other  document,  notice,  letter or
        instrument  entered  into or given  pursuant  to the terms of any of the
        foregoing  or any  document  which it is  agreed  should  be a  "Standby
        Document" for the purpose of this Lease;

        "Standby Lease Agreement"  means the standby lease agreement  entered or
        to be entered into between the Lessee and the Standby Purchaser pursuant
        to which the Standby Purchaser shall, following the purchase of the Ship
        or by the Standby Purchaser, lease the Ship to the Lessee;

        "Standby  Option Notice" has the meaning given to that expression in the
        Standby Put Option Agreement;

        "Standby  Purchaser"  means LNG Shipping Co., a Cayman  Islands  company
        having its principal place of business at P.O. Box 694GT, CIBC Financial
        Centre, 11 Dr Roys Drive, George Town, Grand Cayman,  Cayman Islands, or
        any other  person who may from time to time,  with the  approval  of the
        Lessor,  replace  that  person as Standby  Purchaser  and  includes  its
        successors in title;

        "Standby Put Option Agreement" means the agreement entered into or to be
        entered  into between the Lessor and the Standby  Purchaser  pursuant to
        which  the  Lessor  may sell  its  interest  in the Ship to the  Standby
        Purchaser on the terms and conditions set out therein;

        "Standby  Rental  Assignment"  means the assignment  executed or (as the
        context may require) to be executed by the Lessee, the Standby Purchaser
        and the Lessor in the agreed  form  pursuant  to which the Lessee  shall
        assign in favour of the Standby  Purchaser its rights under clause 5.1.1
        of the Proceeds Deed and the Standby Purchaser shall assign in favour of
        the Lessor the Initial  Rental (as defined in the Standby Lease) and the
        property assigned by the Lessee in favour of the Standby Purchaser under
        this assignment;

        "Sterling",  "Pounds" and  "(pound)"  means the lawful  currency for the
        time being of the United  Kingdom  and in respect of all  payments to be
        made under this Lease in Sterling  mean  immediately  available,  freely
        transferable cleared funds in Sterling;

        "Strip  Liability  Amount"  means,  at any date,  an amount equal to the
        difference  between the Total  Security  Amount and the aggregate of the
        Letter of Credit Amount and the Additional Security Amount at that date;

        "Sub-Lease"  means a lease made or (as the  context  may  require) to be
        made between the Lessee and the  Sub-Lessee  for a period of twenty (20)
        years in the agreed form;

        "Sub-Lease Period" means the period during which the Sub-Lessee shall be
        entitled to the use and  possession of the Ship in  accordance  with the
        Sub-Lease;

        "Sub-Lessee"  means Golar Gimi UK Ltd., an English  company with company
        number 04679439 having its principal place of business at 30 Marsh Wall,
        London E14 9TP and includes its successors in title;

        "Subordinated Debt" means any Indebtedness of the Lessee, the Manager or
        any of their  Subsidiaries which is a Relevant Party owing to the Lessee
        Parent which is subject to the Subordination Deed;

        "Subordination  Deed" means a deed dated  April 2003  entered or (as the
        context  may  require)  to be entered  into  between  (inter  alios) the
        Lessee,  the  Sub-Lessee,  the Other  Sub-Lessees,  the Manager,  Gotaas
        Larsen,  the Lessee  Parent and the First  Security  Agent in the agreed
        form;

        "Subsidiary" of any person means:

        (a)     in respect of a person  incorporated  outside  England and Wales
                means any company or entity directly or indirectly controlled by
                such  person,  and for this purpose  "control"  means either the
                ownership  of more than fifty per cent (50%) of the voting share
                capital (or  equivalent  rights of ownership) of such company or
                entity  or the  power to  direct  its  policies  and  management
                whether by contract or otherwise; and

        (b)     in respect of a person  incorporated  in  England  and Wales,  a
                subsidiary within the meaning of section 736 Companies Act 1985;

        "Supplemental  Agreement" means the Supplemental  Agreement of even date
        herewith  relating to a certain tax deed made  between the Lessor  Agent
        and the Lessee;

        "Swap  Liabilities"  means  Indebtedness  incurred  in respect of swaps,
        foreign exchange  contracts,  futures and other derivatives (but so that
        when  calculating  the  value of any  derivative  transaction,  only the
        marked to market value shall be taken into  account) and  guarantees  in
        respect of such Indebtedness;

        "Tax  Authority"  has  the  meaning  given  to  that  expression  in the
        Financial Schedule;

        "Tax  Contest  Letter"  means a side  letter to this Lease to be entered
        into by the  Lessor and the Lessee  and  regulating  the  conduct of tax
        disputes;

        "Tax Written Down Value" has the meaning given to that expression in the
        Financial Schedule;

        "Taxes" includes all present and future taxes, levies, imposts,  duties,
        fees or charges in the nature of a tax  including,  without  limitation,
        corporation, capital gains, income, gross receipts, franchise, transfer,
        sales, use, business,  occupation,  transaction,  purchase, value added,
        excise, personal property, real property, stamp,  documentary,  national
        insurance  or  other  taxes at the rate  applicable  for the time  being
        imposed by any national or local taxing or fiscal authority or any other
        agency or  government,  together with interest  thereon and penalties in
        respect thereof and "Tax" and "Taxation" shall be construed accordingly;

        "Termination"  means the  termination  of the  leasing of the Ship under
        this Lease otherwise than by the expiry of the Lease Period by effluxion
        of time;

        "Termination  Event" means any of the events or circumstances  described
        in clause 26.1;

        "Termination  Fee" means a sum  calculated  pursuant to paragraph 6.3 of
        the Financial Schedule;

        "Termination  Notice"  means a notice served by the Lessor on the Lessee
        pursuant to clause 27.1;

        "Termination  Payment Date" has the meaning given to that  expression in
        the Financial Schedule;

        "Termination  Sum"  has the  meaning  given  to that  expression  in the
        Financial  Schedule  and shall  include,  for the  purpose of this Lease
        (except the Financial Schedule), any Termination Fee;

        "Third  Earnings  Account  Security"  means  third  priority  deed(s) of
        assignment  executed or (as the  context may  require) to be executed by
        any person in favour of the Lessor  Agent in respect of (inter  alia) an
        Earnings  Account as security  for the  obligations  of the Lessee under
        (inter  alia) this Lease in the agreed form or in such other form as the
        Lessor may  reasonably  require for the  purpose of  creating  effective
        security over such account under any applicable laws;

        "Third Priority Three Party Deed" means the third priority assignment of
        (a) the Lessee's rights, title and interest in and to (i) all Insurances
        and  Requisition  Compensation of the Ship, (ii) the Lease and (iii) the
        Sub-Lease and (b) the Sub-Lessee's  rights, title and interest in and to
        (i) all Insurances and Requisition Compensation of the Ship and (ii) the
        Time Charter  executed or (as the context may require) to be executed by
        the  Lessee  and the  Sub-Lessee  in favour of the  Lessor  Agent in the
        agreed form;

        "Third Standby Mortgage" means any third priority mortgage in respect of
        the Ship  executed  by the  Standby  Purchaser  in favour of the  Lessor
        pursuant to clause 5.2.5 of the Proceeds Deed;

        "Third Standby Purchaser Assignment" means the third priority assignment
        executed or (as the  context may  require) to be executed by the Standby
        Purchaser in favour of the Lessor Agent in the agreed form in respect of
        the rights, title and interest of the Standby Purchaser in and to (inter
        alia) the Insurances and Requisition Compensation;

        "Third Standby Purchaser Share Security" means the third priority charge
        of the issued and  outstanding  share  capital of the Standby  Purchaser
        executed  or  (as  the  context  may  require)  to be  executed  by  the
        shareholder  of the Standby  Purchaser  in favour of the Lessor Agent in
        the agreed form;

        "Third Sub-Lessee Share Security" means the third priority charge of the
        issued and outstanding  share capital of the Sub-Lessee  executed or (as
        the context may  require) to be executed by the Manager in favour of the
        Lessor Agent in the agreed form;

        "Time  Charter"  means the Original  Time Charter as novated by the Time
        Charter  Novation  Agreement  and as further  amended  and  supplemented
        pursuant  to  Addendum  No.  2 dated  4 April  2003  and  including  any
        extensions  and  replacement  thereof  pursuant to the terms thereof and
        including any other time  charter(s)  approved by the Lessor pursuant to
        clause 25.6;

        "Time Charter Novation  Agreement" means the novation  agreement dated 4
        April 2003 made  between  the Time  Charterer,  Golar Gimi Inc.  and the
        Sub-Lessee  pursuant to which the  rights,  title and  interest  and all
        obligations of Golar Gimi Inc. under the Original Time Charter have been
        novated in favour of the Sub-Lessee;

        "Time Charterer" means Methane Services Limited, an English company with
        company  number  0737366  having its principal  place of business at 100
        Thames Valley Park Drive, Reading,  Berkshire,  RG6 1PT and includes its
        successors  in title and includes any other person which is a party to a
        Time Charter as charterer from time to time;

        "Total Loss" means:

        (a)     actual or  constructive or compromised or arranged total loss of
                the Ship; or

        (b)     the Compulsory Acquisition of the Ship; or

        (c)     the hijacking,  theft,  condemnation,  capture, seizure, arrest,
                detention or confiscation of the Ship (other than where the same
                amounts to Compulsory  Acquisition  of the Ship) by any persons,
                unless  the Ship be  released  and  restored  to the  Lessee or,
                during the Sub-Lease Period, the Sub-Lessee from such hijacking,
                theft,  condemnation,  capture,  seizure,  arrest,  detention or
                confiscation   within  sixty  (60)  days  after  the  occurrence
                thereof; or

        (d)     the expiry of one hundred and eighty  (180) days (or such longer
                period as the Lessor, the Lessee and the Relevant Security Agent
                may agree) after the Ship shall have been requisitioned for hire
                by a Government Entity or other competent authority,  whether de
                jure or de facto;

        "Total  Loss Date"  means the date upon which the Ship is deemed to have
        become a Total Loss pursuant to clause 22.2.2;

        "Total Loss  Payment  Date" means the  earliest of any of the  following
        dates next occurring after the Total Loss Date:

        (a)     the date  falling one  hundred  and twenty  (120) days after the
                Total  Loss Date (or such later day as the Lessor may agree from
                time to time); or

        (b)     the first Banking Day after the day on which the Lessor receives
                the Total Loss Proceeds or Requisition Compensation;

        "Total Loss  Proceeds"  means the  proceeds of any policy or contract of
        insurance arising in respect of a Total Loss;

        "Total Security  Amount" has the meaning given to that expression in the
        Financial Schedule;

        "Transaction  Documents" has the meaning given to that expression in the
        Proceeds Deed;

        "Transaction  Fees"  means the  Arrangement  Fee,  the Lease Fee and the
        Legal Fee;

        "United Kingdom" means Great Britain and Northern Ireland;

        "Value Added Tax" or "VAT" means value added tax as provided for in VATA
        and legislation (whether delegated or otherwise) supplemental thereto or
        in any primary or  subordinate  legislation  promulgated by the European
        Union or any body or agency thereof and any tax similar or equivalent to
        value added tax imposed by any country other than the United Kingdom and
        any similar or turnover Tax  replacing or  introduced in addition to any
        of the same;

        "Variable  Liability Amount" has the meaning given to that expression in
        the Letter of Credit;

        "Variable  Assumption"  has the meaning given to that  expression in the
        Financial Schedule;

        "VATA" means the Value Added Tax Act 1994; and

        "WDA Letter" means a side letter to this Lease to be entered into by the
        Lessor  and  the  Lessee  in  relation  to  the  rate  of  writing  down
        allowances.

1.3     Insurance definitions

        In clause 16:

1.3.1   "excess  risks"  means the  proportion  (if any) of claims  for  general
        average,  salvage and salvage  charges and under the ordinary  collision
        clause not  recoverable in consequence of the value at which a vessel is
        assessed for the purpose of such claims exceeding her insured value;

1.3.2   "protection and indemnity risks" means:

        (a)     the usual risks  (including oil  pollution)  covered by a United
                Kingdom protection and indemnity association or a protection and
                indemnity association which is managed in London or Norway or is
                otherwise a member of the  "International  Group" of  protection
                and indemnity associations (including,  without limitation,  the
                proportion  (if any) of any sums  payable to any other person or
                persons in case of collision which are not recoverable under the
                hull and  machinery  policies  by  reason  of the  incorporation
                therein of clause 8 of the Institute  Time Clauses  (1/11/95) or
                the  Institute  Amended  Running  Down clause  (1/10/71)  or any
                equivalent provision); or

        (b)     (if placed on Norwegian  terms) means  protection  and indemnity
                risks as defined in the Norwegian  Marine Insurance Plan of 1964
                as amended; and

1.3.3   "war risks" includes those risks covered by the standard form of English
        marine policy with  Institute War and Strike  Clauses  (Time)  (1/11/95)
        attached or similar  cover (or if placed on Norwegian  terms,  means the
        war risks described in The Norwegian  Maritime Insurance Plan of 1966 as
        amended).

1.4     Headings

        Clause  headings and the index are inserted for convenience of reference
        only and shall be ignored in the interpretation of this Lease.

1.5     References

        In this Lease, unless the context otherwise requires:

1.5.1   references to Clauses and Schedules are to be construed as references to
        Clauses of, and  Schedules  to, this Lease and  references to this Lease
        include its Schedules;

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

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

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

1.5.5   references to a time of day are to London time;

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

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

1.5.8   references to an  "obligation"  include,  for the avoidance of doubt, an
        obligation to make a payment;

1.5.9   except in the Financial  Schedule  references to any enactment  shall be
        construed as  references  to such  enactment as  re-enacted,  amended or
        extended; and

1.5.10  references to any person include the successors and permitted assigns of
        such person.

1.6     Value added tax

        Any Value Added Tax or any similar tax properly chargeable in respect of
        supplies  of goods or  services  under the terms of this Lease or any of
        the other Relevant  Documents shall be payable (subject to production of
        an  appropriate  Value  Added Tax  invoice)  in  addition to the amounts
        otherwise payable hereunder or thereunder,  which amounts are determined
        exclusive of Value Added Tax.

1.7     Conflicts

        In the event of any  conflict  between  this  Lease and any of the other
        Lease  Documents,  the provisions of this Lease shall prevail but in the
        event of any conflict  between a Lease  Document and the Proceeds  Deed,
        the provisions of the Proceeds Deed shall prevail.

1.8     Agreed forms

        In this Lease, any document expressed to be "in the agreed form" means a
        document  in a form agreed by (and for the  purposes  of  identification
        signed by or on behalf  of) the Lessee and the Lessor or (in the case of
        any of the Relevant  Documents) a document in the form actually executed
        by both the Relevant Party or Relevant Parties and the Lessor.

1.9     Contracts (Rights of Third Parties) Act 1999

        With the  exception of any  Indemnified  Persons,  no term of this Lease
        shall be enforceable pursuant to the Contracts (Rights of Third Parties)
        Act 1999 by a person who is not a party to this Lease. For the avoidance
        of doubt however it shall not be necessary for the parties to this Lease
        to obtain  the  consent  of the  Indemnified  Persons in order to amend,
        supplement or modify the terms of this Lease.

2       Lessee's representations and warranties

2.1     Continuing representations and warranties

        The Lessee represents and warrants to the Lessor that:

2.1.1   Due incorporation

        each Relevant Party is duly  incorporated and validly existing under the
        laws of its  country or state of  incorporation  as a limited  liability
        company  and has  power  to  carry on its  business  as it is now  being
        conducted and to own its property and other assets;

2.1.2   Corporate power

        each  Relevant  Party has power to  execute,  deliver  and  perform  its
        obligations  under  the  Relevant  Documents  to which it is or is to be
        party and all necessary corporate, shareholder and other action has been
        taken to authorise the execution, delivery and performance of the same;

2.1.3   Binding obligations

        this Lease  constitutes and each other of the Relevant  Documents,  upon
        execution and delivery  thereof,  will  constitute the legal,  valid and
        binding  obligations  of each Relevant  Party  enforceable in accordance
        with its terms except as such enforcement may be limited by any relevant
        bankruptcy,   insolvency,   administration  or  similar  laws  affecting
        creditors' rights generally and by general principles of equity;

2.1.4   No conflict with other obligations

        the  execution  and  delivery  of, and the  performance  of the Relevant
        Documents to which any Relevant Party is a party will not (a) contravene
        any  existing  applicable  law,  statute,  rule  or  regulation  or  any
        judgment,  decree or permit to which any Relevant Party is subject,  (b)
        conflict  with,  or  result  in any  breach  of any of the  terms of, or
        constitute a default under,  any agreement or other  instrument to which
        any Relevant Party is a party or is subject or by which it or any of its
        property is bound,  (c) contravene or conflict with any provision of the
        memorandum and articles of  association/articles  of  incorporation  and
        by-laws or other  constitutional  documents of any Relevant Party or (d)
        result in the creation or imposition of or oblige any Relevant  Party to
        create any  Encumbrance  (other  than a  Permitted  Encumbrance)  on the
        undertakings, assets, rights or revenues of any Relevant Party;

2.1.5   Choice of law

        the choice by the Relevant Parties of English law to govern the Relevant
        Documents and, where applicable,  the submission by the Relevant Parties
        to the  non-exclusive  jurisdiction  of the English courts are valid and
        binding;

2.1.6   No immunity

        no  Relevant  Party nor any of its assets is entitled to immunity on the
        grounds of  sovereignty or otherwise from any legal action or proceeding
        (which shall include,  without  limitation,  suit,  attachment  prior to
        judgment, execution or other enforcement);

2.1.7   Financial statements correct and complete

        the unaudited proforma consolidated and combined financial statements of
        the Lessee and its Subsidiaries (excluding Oxbow Holdings Inc. and Golar
        Maritime (Asia) Inc.) and the audited consolidated  financial statements
        of the  Lessee  Group  in  respect  of the  financial  year  ended on 31
        December  2001 and the  financial  statements  of the Golar Gas Group in
        respect of the nine (9) months ended as of 30 September  2002  (prepared
        on a pro-forma  consolidated  and  combined  basis) as  delivered to the
        Lessor have been prepared in accordance with Relevant GAAP  consistently
        applied and present fairly and accurately the  consolidated and combined
        financial  position of the Lessee and its Subsidiaries  (excluding Oxbow
        Holdings Inc. and Golar  Maritime  (Asia) Inc.) and the Lessee Group and
        the consolidated and combined  financial position of the Golar Gas Group
        as at the relevant date and the  consolidated  results of the operations
        of the Lessee and its  Subsidiaries  (excluding  Oxbow Holdings Inc. and
        Golar Maritime  (Asia) Inc.) and the Lessee Group for the financial year
        ended as at the relevant date and the  consolidated and combined results
        of the operations of the Golar Gas Group  respectively  for the nine (9)
        months ended as at the  relevant  date,  and, as at the  relevant  date,
        neither the Lessee nor any of its Subsidiaries (excluding Oxbow Holdings
        Inc. and Golar Maritime (Asia) Inc.) nor any of the Lessee Group nor any
        of the Golar Gas Group had any  significant  liabilities  (contingent or
        otherwise)  which are not  disclosed  by, or  reserved  against in, such
        financial  statements and neither the Lessee nor any of its Subsidiaries
        (excluding  Oxbow Holdings Inc. and Golar Maritime  (Asia) Inc.) nor any
        of the Lessee Group nor any of the Golar Gas Group had any unrealised or
        anticipated  losses which are not disclosed  by, or reserved  against or
        provided for in, such financial statements; and

2.1.8   Tax residence

        the Sub-Lessee is resident in the United Kingdom and is not resident for
        Tax purposes in any jurisdiction other than the United Kingdom.

2.2     Initial representations and warranties

        The Lessee further represents and warrants to the Lessor that:

2.2.1   Consents obtained

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

2.2.2   Pari passu

        the obligations of each Relevant Party under the Relevant  Documents are
        direct, general and unconditional obligations of such Relevant Party and
        rank at least pari passu with all other present and future unsecured and
        unsubordinated  Indebtedness of each Relevant Party save for obligations
        mandatorily preferred by law and not by contract;

2.2.3   No default under other Indebtedness

        no Relevant Party is (nor would be with the giving of notice or lapse of
        time or the  satisfaction of any other condition or combination  thereof
        be) in material breach of or in default under any agreement  relating to
        (a) Borrowed Money or (b)  Indebtedness in respect of amounts  exceeding
        one million Dollars ($1,000,000),  to which it is a party or by which it
        may be bound;

2.2.4   Information

        the  information,  exhibits  and reports  furnished by the Lessee to the
        Lessor in  connection  with the  matters  contemplated  by the  Relevant
        Documents or in connection  with the  negotiation and preparation of the
        Relevant  Documents  are true and accurate in all material  respects and
        not misleading,  do not omit material facts and all reasonable enquiries
        have been made to verify the facts and statements contained therein;

2.2.5   No withholding taxes

        (a)     no Taxes are imposed by  withholding or otherwise on any payment
                to be made  by any  Relevant  Party  under  any of the  Relevant
                Documents  or are  imposed on or by virtue of the  execution  or
                delivery by any Relevant Party of the Relevant  Documents or any
                other  document or instrument to be executed or delivered  under
                any of the Relevant Documents;

        (b)     the Lessee is exempt from tax in the Republic of Liberia;

        (c)     neither the Lessee nor any of its  Subsidiaries or affiliates is
                a division,  bureau,  office, agency,  department,  committee or
                political  subdivisions  of the  Government  of the  Republic of
                Liberia or another sovereign jurisdiction;

        (d)     the Lessee is not regularly engaged in the conduct of activities
                pursuant  to  contractual  arrangements  with  the  Republic  of
                Liberia or any division,  bureau,  office,  agency,  department,
                committee or political subdivisions thereof;

        (e)     the Lessee is not:

                (i)     regularly  engaged in the ownership,  use or disposition
                        of real  property  located in the Republic of Liberia or
                        agricultural or mineral products derived therefrom; nor

                (ii)    regularly engaged in the conduct of activities  pursuant
                        to  a  contractual  arrangement  with  the  Republic  of
                        Liberia or any agency or political subdivision thereof;

                (iii)   a corporation  in respect of which more than twenty five
                        percent  (25%) of the total  combined  voting  power and
                        more than twenty five  percent  (25%) of the total value
                        of  outstanding   equity  stock  is  owned  directly  or
                        indirectly by Liberian resident persons; nor

                (iv)    carrying  on  business  operations  in the  Republic  of
                        Liberia;

2.2.6   No Relevant Event

        no Relevant Event has occurred and is continuing;

2.2.7   The Ship

        the Ship on the Delivery Date will:

        (a)     be in the absolute ownership of the Lessor;

        (b)     maintain  the  Classification   free  of  all  requirements  and
                recommendations of the  Classification  Society that are overdue
                or have not been complied with in accordance with their relevant
                terms; and

        (c)     save in respect of or  pursuant  to the  Sub-Lease  and the Time
                Charter,  not be  subject  to any  lease or  contract  or to any
                agreement  to enter  into any  charter  or  contract  which,  if
                entered  into by the Lessee  after the date of any or all of the
                Lease Documents, would have required the consent of the Lessor;

2.2.8   Freedom from Encumbrances

        neither  the  Lessee's  interest  in the  Ship,  the  Insurances  or any
        Requisition  Compensation  nor any part  thereof will be on the Delivery
        Date subject to any Encumbrances save for any Permitted Encumbrances;

2.2.9   Environmental matters

        to the best of the knowledge and belief of the Lessee and its officers:

        (a)     all Environmental Laws applicable to the Ship have been complied
                with and all  consents,  licences and approvals  required  under
                such Environmental Laws have been obtained and complied with;

        (b)     no Environmental Claim has been made, or is pending, against the
                Lessee or the Ship and not fully satisfied;

        (c)     no Environmental Claim has been made, or is pending, against any
                Relevant  Party  (other  than the Lessee) or any  Relevant  Ship
                (other than the Ship) and not fully satisfied which  constitutes
                or may give rise to a Termination Event of the type specified in
                clause 26.1.18; and

        (d)     there has been no Environmental Incident;

2.2.10  Share ownership

        (a)     Gotaas  Larsen  is the sole  legal and  beneficial  owner of the
                whole of the issued  share  capital of the Lessee as at the date
                of this Lease;

        (b)     the Lessee Parent is the sole, legal and beneficial owner of the
                whole of the issued  share  capital  of Gotaas  Larsen as at the
                date of this Lease; and

        (c)     not less  than  twenty  five  percent  (25%) of the  issued  and
                outstanding  share  capital of the Lessee  Parent is directly or
                indirectly,   legally  and   beneficially   owned  by  Mr.  John
                Fredriksen (the "Relevant Shareholder");

2.2.11  Copies true and complete

        the  copies  of the  Management  Agreement  and such of the  Transaction
        Documents to which the Lessor is not a party  delivered by the Lessee to
        the Lessor are true and complete copies of such documents,  each of such
        documents   constitutes  the  valid,  legally  binding  and  enforceable
        obligations of the Relevant  Parties which are parties  thereto,  are in
        full  force and effect and there  have been no  material  amendments  or
        variations thereof or defaults thereunder;

2.2.12  No litigation

        no litigation, arbitration or administrative proceeding is taking place,
        pending or, to the  knowledge of the officers of the Lessee,  threatened
        against any Relevant Party which could, if adversely determined,  have a
        material adverse effect on the business,  assets or financial  condition
        of the Lessee Group taken as a whole; and

2.2.13  No filings required

        save for the filing of the Third  Priority  Three Party Deed,  the Third
        Standby  Purchaser Share Security,  the Third Sub-Lessee Share Security,
        the Standby Rental Assignment and the Third Standby Purchaser Assignment
        and the Third Earnings Account  Security with the Companies  Registry in
        England and Wales and the filing of the Third  Standby  Purchaser  Share
        Security,  the Standby Rental Assignment and the Third Standby Purchaser
        Assignment with the Companies Registry in the Cayman Islands,  it is not
        necessary  to  ensure  the   legality,   validity,   enforceability   or
        admissibility in evidence of the Relevant  Documents that any of them or
        any other  instrument  be  notarised,  filed,  recorded,  registered  or
        enrolled  in any  court,  public  office or  elsewhere  in any  Relevant
        Jurisdiction or that any stamp, registration or similar tax or charge be
        paid in any  Relevant  Jurisdiction  on or in relation  to the  Relevant
        Documents  and the  Relevant  Documents  are,  or will,  upon  execution
        thereof by any Relevant Party,  be in proper form for their  enforcement
        in the courts of each Relevant Jurisdiction.

2.3     Repetition of representations and warranties

        On  and  as of  the  Delivery  Date  and  (except  in  relation  to  the
        representations  and  warranties  in clause 2.2) on each Primary  Rental
        Date the  Lessee  shall be  deemed  to repeat  the  representations  and
        warranties in clause 2.1 (and so that the representation and warranty in
        clause  2.1.7 shall for this  purpose  refer to the then latest  audited
        financial   statements  of  the  Lessee,   the  Sub-Lessee,   the  Other
        Sub-Lessees  and  the  Manager,  the  audited   consolidated   financial
        statements  of the  Lessee  Group  and  the  consolidated  and  combined
        financial  statements  of the Golar Gas Group  delivered  to the  Lessor
        under  clause  11.1.4)  as if  made  with  reference  to the  facts  and
        circumstances existing on such day.

2.4     Not prejudiced by Lessor's investigation

        The   rights  and   remedies   of  the   Lessor  in   relation   to  any
        misrepresentation  or breach of warranty on the part of the Lessee shall
        not be  prejudiced  by any  investigation  by or on behalf of the Lessor
        into the affairs of any person  (other than the Lessor) being a party to
        any of the Relevant Documents, by the performance of any of the Relevant
        Documents,  or by any other act or thing which may be done or omitted to
        be done by the Lessor under any of the Relevant Documents which would or
        might, but for this clause 2.4, prejudice such rights and remedies.

3       Term of Lease

3.1     Primary Period

        The Lessor shall let and demise to the Lessee and the Lessee shall lease
        the Ship,  subject to the terms and  conditions  of this Lease,  for the
        Primary Period.

3.2     Secondary Period

        The  Lessee  shall be  entitled,  provided  that no  Relevant  Event has
        occurred  and is  continuing,  on giving  to the  Lessor  notice  (which
        notice, when given, shall be irrevocable) not less than thirty (30) days
        prior  to the  end  of (a)  the  Primary  Period  and  (b)  (subject  as
        hereinafter  provided) each succeeding period of twelve (12) months from
        the end of the Primary  Period,  to extend the Lease Period for a period
        of twelve (12) months or, if less, up to a maximum period  equivalent to
        any  remaining  useful life of the Ship.  The  Lessee's  entitlement  to
        extend the Lease  Period in the manner  referred  to above is subject to
        the Lessee providing evidence reasonably satisfactory to the Lessor that
        the Ship remains  seaworthy and has a remaining useful life equal to the
        term for which  the Lease  Period  is to be  extended  pursuant  to this
        clause 3.2.

3.3     Voluntary termination and expiry

3.3.1   Notice of termination

        The Lessee  shall,  subject to clause 25.5, be entitled to terminate the
        Lease Period on any date provided that:

        (a)     the Lessee shall have given to the Lessor notice of the proposed
                date of  termination  not less than thirty (30) days before such
                date; or

        (b)     if the Lessee  becomes liable to make a payment in respect of an
                increased  cost to the Lessor under clause 31.1 or if the Lessee
                certifies  in  writing  that it  wishes to  terminate  the Lease
                Period because it has become Economically Burdensome, the Lessee
                shall be entitled to give to the Lessor  notice of the  proposed
                termination  not less than five (5)  Banking  Days  before  such
                date.

                A voluntary termination under this clause 3.3 will also occur in
                the  circumstances  contemplated  by clauses  3.8,  25, 27.3 and
                31.3.  For the purpose of this clause 3.3, the date specified as
                the proposed date of any  termination  in any notices  delivered
                pursuant  to  sub-clauses  (a) and (b)  above or the date of any
                notices given pursuant to clause 3.8, 25 or, as the case may be,
                the date five (5) Banking Days  following  the issue of a notice
                of  termination  pursuant  to  clauses  27.3 or  31.3,  shall be
                referred to as the "Notified Termination Date".

3.3.2   Continuation of Lease Period

        Notwithstanding  anything to the  contrary in this Lease where the Lease
        Period  expires by  effluxion  of time or if the Lessee  gives notice to
        terminate the Lease Period pursuant to this clause 3.3, the Lease Period
        shall  continue on the terms set out in clause 18.3 until and end on the
        date on  which  the Ship  shall  be  delivered  to a  purchaser  thereof
        pursuant to a sale of the Ship as contemplated  by clause 3.4,  whenever
        such delivery shall take place.

3.3.3   Termination payments

        On the Notified  Termination  Date the Lessee shall pay to the Lessor an
        amount  equal to the  Termination  Sum on such  date  together  with all
        amounts of Rental and other  moneys  then due and owing by the Lessee to
        the Lessor under this Lease or any of the other Lease Documents.

3.3.4   Mitigation

        Where the Lease Period is terminated because it has become  Economically
        Burdensome  to the  Lessee,  the Lessor  and the Lessee  agree that they
        shall,  at the cost of the  Lessee,  use all  reasonable  endeavours  to
        arrange for a termination of the Lease Period in an efficient  manner so
        as to try and minimise  the  after-tax  cost to the Lessee  arising from
        such  termination.  It is  acknowledged  and agreed,  however,  that the
        Lessor  shall not be  obliged  to agree to any  arrangement  or take any
        action in connection with the above mitigation  arrangements if to do so
        would give rise to any  additional  cost or liabilities to the Lessor in
        respect of any such termination of the Lease Period unless the Lessor is
        indemnified or otherwise secured in a manner  satisfactory to it, in its
        absolute  discretion,  in  respect  of  any  such  additional  costs  or
        liabilities.

3.4     Sale of Ship on expiry or voluntary termination

        During the period commencing ninety (90) days before the last day of the
        Lease Period (or, as the case may be,  commencing  on the date of notice
        being  given  under  clause  3.3) and  ending  on the date on which  the
        completion  of the sale or  disposal  of the Ship takes place the Lessor
        shall,  subject to the  provisions  of the Proceeds Deed relating to the
        sale or other transfer or disposal of the Ship and provided it shall not
        be prevented from so doing for any reason whatsoever which is beyond its
        reasonable  control,  endeavour  to sell all of its  rights,  title  and
        interest in and to the Ship with an intended  delivery or completion on,
        or as soon as practicable  after,  the Notified  Termination Date or, as
        the case may be, the date of expiry of the Lease  Period by effluxion of
        time.  The Net Sale  Proceeds  arising  in  respect of any sale shall be
        applied,  subject to clause 10.4 and the  provisions  of clauses 3.1 and
        3.3 of the Proceeds Deed, as follows:

3.4.1   first, in retention by the Lessor of an amount equal to one tenth of one
        per cent (0.1%) of the amount of the Net Sale Proceeds;

3.4.2   secondly,  in or towards  retention  by the Lessor of an amount equal to
        all or any part of the Termination Sum which the Lessee shall not, on or
        before the date of application  of the Net Sale  Proceeds,  have paid to
        the Lessor in accordance with clause 3.3;

3.4.3   thirdly,  in or towards  settlement  of any other  amounts  owing by the
        Lessee  to the  Lessor  under  this  Lease  or any  of the  other  Lease
        Documents (including any interest due in respect thereof);

3.4.4   fourthly,  in or  towards  refunding  to the  Lessee by way of rebate of
        Rental  an  amount  not   exceeding  all  Rental   (including,   without
        limitation,  any Termination Sum) paid to the Lessor by the Lessee under
        this Lease; and

3.4.5   fifthly,  to the  Lessee,  by  way of  sales  commission  determined  in
        accordance   with  the  provisions  of  clause  3.6.4  or  otherwise  as
        appropriate.

3.5     Redelivery voyage

        Should the Ship be upon a voyage (other than under requisition for hire)
        at the time the  Lease  Period  would  (but for the  provisions  of this
        clause 3.5) have  terminated  the Lease Period shall (if required by the
        Lessee)  continue for such  additional  time as may be necessary for the
        completion of such voyage. The Lease Period shall also continue for such
        additional time as may be necessary in order to bring the Ship to a port
        of  re-delivery  as  provided  in clause  18.1 The Lessee  shall use all
        reasonable  endeavours to bring the Ship to such port of  re-delivery as
        soon as practicable following completion of the relevant voyage. Nothing
        in this clause 3.5 shall, where the Lease Period is terminated following
        the issue of a Termination Notice,  operate to modify the dates on which
        the Lessee is required to make any payments  (whether of any Termination
        Sum or otherwise) under this Lease.

3.6     Sales agency

        In respect of any sale of the Ship in  accordance  with clause 3.4,  the
        Lessor hereby appoints the Lessee (and such appointment  shall,  without
        prejudice to clause 3.4.5,  constitute a full discharge by the Lessor of
        its obligation under clause 3.4 to endeavour to sell the Ship) to act as
        the  sole  and  exclusive  agent  of  the  Lessor  for  the  purpose  of
        negotiating the sale of the Ship on the following terms:

3.6.1   the Lessee will (if and to the extent it is permitted to do so under the
        Proceeds  Deed)  endeavour  to  arrange  the sale of the Ship for a cash
        consideration  payable by the  purchaser in full on  completion  of such
        sale in Pounds, Dollars or such other currency as the Lessor may approve
        (such  approval  not to be withheld  in the case of a currency  which is
        then freely convertible into Pounds) on the best terms (including price)
        reasonably  obtainable  on the open market (and in any event for no less
        than the Tax Written Down Value of the Ship as at the date of such sale)
        provided that the Ship shall not be sold to:

        (a)     the Lessee or the Sub-Lessee; or

        (b)     any person  acting in trust for,  as  nominee  of, as agent,  or
                otherwise  as  representative  of,  or on  behalf  of any of the
                persons referred to in (a) above,

        and the Lessee  will keep the Lessor  informed  from time to time of its
        progress;

3.6.2   the Lessee's  authority will not extend to concluding a contract for the
        sale of the Ship for which the Lessor's  specific written authority will
        be required (which  authority shall not be withheld or delayed where (a)
        the sale complies with the other  provisions of this clause 3.6, (b) the
        resulting  Net Sale  Proceeds  will equal or exceed the Tax Written Down
        Value as at the proposed  date of sale and (c) the  aggregate of the Net
        Sale  Proceeds  which can be retained by the Lessor  pursuant to clauses
        3.1 and 3.3 of the Proceeds Deed and the Applicable  Security  Amount as
        at the  proposed  date of sale will exceed the  aggregate  amount of the
        Termination  Sum and all other amounts owing by the Lessee to the Lessor
        under this Lease and any amounts  due but unpaid  under any of the other
        Lease  Documents  (including any interest due in respect  thereof) as at
        the proposed  date of sale or that, to the extent that either (b) or (c)
        above do not apply,  the Lessee has satisfied the Lessor that the Lessee
        and/or  the  Lessee  Parent  will  have  adequate  financial   resources
        available  to enable  the Lessee to pay the  balance  of such  aggregate
        amount to the Lessor in accordance with clause 3.4));

3.6.3   the Ship shall be offered  for sale on an "as is where is" basis and for
        delivery on, or as soon as practical after, termination or expiry of the
        Lease Period and any contract  for its sale shall  include  terms to the
        following effect:

        (a)     that  all  terms,  conditions,  representations  or  warranties,
                expressed or implied by statute or otherwise,  whether as to the
                state or quality of the Ship or as to  description,  fitness for
                purpose,   merchantable   quality,   satisfactory   quality   or
                otherwise,  are,  so  far  as is  permitted  by  law,  expressly
                excluded  as between the Lessor and the buyer save in respect of
                the warranty  that the Lessor shall be passing such title to the
                Ship as the Lessor  received  from Golar Gimi Inc. free from any
                Lessor's Encumbrances;

        (b)     that, if the proposed sale contract provides for delivery of the
                Ship by the Lessor, such obligation is conditional upon the Ship
                first being redelivered to the Lessor;

        (c)     that the purchase  moneys shall be paid to the Lessor in full in
                cash on completion of the sale to the relevant  Lessor  Proceeds
                Account and otherwise, where applicable, in accordance with, the
                provisions of the Proceeds Deed;

3.6.4   if the Net Sale Proceeds exceed the aggregate of:

        (a)     any  sums  which  the  Lessor  may  be  entitled  to  retain  in
                accordance with clauses 3.4.1, 3.4.2 and 3.4.3; and

        (b)     any sums which the Lessor  shall be obliged to pay to the Lessee
                by way of rebate of Rental in  accordance  with clause 3.4.4 and
                as determined pursuant to clause 3.4 then,

        subject to clause 10.4 the Lessor  shall  promptly  pay to the Lessee by
        way of sales commission, an amount equal to such excess;

3.6.5   the Lessee  shall be entitled to  delegate  its rights and duties  under
        this clause 3.6 to any member of the Lessee Group or to any other person
        as  the  Lessor  may  approve,  such  approval  not  to be  unreasonably
        withheld; and

3.6.6   the sales  agency  rights  under this clause shall not apply or shall be
        terminated if at the time the sales agency appointment would arise or at
        any time thereafter a Termination Event occurs and is continuing and the
        Lessor has served a Termination Notice.

3.7     Credit review

        The Lessor shall be entitled during the period between the dates falling
        one  hundred  and eighty  (180) and ninety (90) days prior to the Credit
        Review Date (in this clause 3.7 the "Credit Review Period") to carry out
        a  review  of the  security  arrangements  constituted  by the  Relevant
        Documents and the  creditworthiness  of the Lessee and the Lessee Parent
        (taking into  account the  exposure of the Lessee and the Lessee  Parent
        under  the  Relevant  Documents  having  regard  to  any  Relevant  Bank
        Documents  which will continue in full force and effect after the Credit
        Review  Date,  any new  valuations  of the  Ships  and the  Other  Ships
        provided to the Lessor at such time and any surplus amounts available in
        respect of the Ships and the Other  Ships as  security to the Lessor and
        the Other  Lessors at that time) and, at the absolute  discretion of the
        Lessor,   to  determine  whether  such  security   arrangements   and/or
        creditworthiness  are adequate to secure the Strip Liability  Amount and
        any other  unsecured  obligations of the Lessee under this Lease and the
        other Lease  Documents in respect of the period falling after the Credit
        Review  Date.  The Lessor  agrees that it shall  consult with the Lessee
        during the Credit  Review  Period  when  considering  the  matters to be
        considered by the Lessor pursuant to this clause.

        Following such review the Lessor shall notify the Lessee of its decision
        on or before the expiry of the Credit Review Period and, if it considers
        that such security arrangements and/or  creditworthiness are inadequate,
        the Lessor  will  initially  notify the Lessee in writing and during the
        period from the date of such  notification  up to the date falling forty
        five (45) days  prior to the  Credit  Review  Date and if the  Lessee so
        requests,  the  Lessor  and the  Lessee  shall  discuss  in  good  faith
        alternative  arrangements which, if implemented,  would cause the Lessor
        to be comfortable with the security arrangements and/or creditworthiness
        of the Lessee and the Lessee Parent and if agreement in principle can be
        reached  on  such   alternative   arrangements   then  such  alternative
        arrangements  shall be documented  on terms and in a form  acceptable to
        the Lessor on or prior to the Credit Review Date.

        If, notwithstanding the said good faith discussions, the Lessor is still
        not satisfied that the security arrangements and/or  creditworthiness of
        the  Lessee  and the  Lessee  Parent,  even  on a  modified  basis,  are
        adequate, the Lessee will be entitled at the Lessee's option to either:

3.7.1   issue a notice of the type  referred to in clause 3.8 under  clause 3.8;
        or

3.7.2   constitute to the  satisfaction of the Lessor prior to the Credit Review
        Date, such additional  security as shall be acceptable to the Lessor and
        having a value for security  purposes (as  determined  by the Lessor) at
        the date upon which such further  security  shall be  constituted as the
        Lessor  shall in its  absolute  discretion  require  to secure the Strip
        Liability Amount and any other unsecured obligations of the Lessee under
        this  Lease  and  the  other  Lease  Documents   having  regard  to  the
        circumstances  in which  such  additional  security  is  required  to be
        provided under this clause.

        The Lessor  agrees that for the purpose of clause 3.7.2 the provision by
        the  Lessee of a letter of credit or bank  guarantee  from a  Qualifying
        Replacement Bank on terms acceptable to the Lessor in an amount equal to
        the amount of the Strip  Liability  Amount and/or such other  additional
        security   requirement  to  be  provided  under  this  clause  shall  be
        acceptable  additional  security for the relevant amount secured for the
        purpose of this clause.

3.8     Credit review notice

        If the Lessee  shall,  pursuant  to clause 3.7 elect to give a notice of
        the type referred to in this clause 3.8, the Lessee shall be immediately
        obliged to give a notice pursuant to clause 3.3 (other than with respect
        to the  period of such  notice)  to  terminate  the Lease  Period on the
        Credit  Review Date.  The  provisions  of clauses 3.4, 3.5 and 3.6 shall
        apply to such termination of the Lease Period.

4       Conditions

4.1     Lessee's conditions precedent

        The obligation of the Lessor (in each case as between the Lessor and the
        Lessee  pursuant to clause 4.5) to pay the  Transaction  Fees and to let
        and  demise  the Ship to the  Lessee  under this Lease is subject to the
        condition  that on the Delivery  Date the Lessor shall have received the
        documents  and evidence  specified in Schedule 1, in each case,  in form
        and substance  satisfactory  to the Lessor (and that,  unless  otherwise
        agreed by the Lessor and the Lessee, Delivery shall occur on or prior to
        11 April 2003).

4.2     Further conditions

        The obligation of the Lessor to pay the  Transaction  Fees and to demise
        the Ship to the Lessee  under this Lease shall be subject to the further
        condition that the Lessor shall have received a Delivery  Request Notice
        not less than two (2) Banking Days (or such shorter period as the Lessor
        and the Lessee may agree) prior to the required  date for payment of the
        Transaction  Fees and the  proposed  date of delivery of the Ship to the
        Lessee under this Lease and to the further  conditions  that at the time
        of the giving of the Delivery  Request Notice and  immediately  prior to
        the time when Delivery is to take place:

        (a)     the  representations  and  warranties set out in clauses 2.1 and
                2.2 (and so that the representation and warranty in clause 2.1.7
                shall  for  this  purpose  refer  to  the  then  latest  audited
                financial  statements delivered to the Lessor under clause 11.1)
                and the  representations  and  warranties set out in clauses 4.1
                and  4.2 of  the  Lessee  Parent  Guarantee  (and  so  that  the
                representation and warranty in clause 4.1.6 of the Lessee Parent
                Guarantee  shall  for this  purpose  refer  to the  then  latest
                audited  financial  statements  delivered  to the  Lessor  under
                clause  5.1.4  of the  Lessee  Parent  Guarantee)  are  true and
                correct  as if each was  made  with  respect  to the  facts  and
                circumstances existing at such time;

        (b)     no Relevant Event shall have occurred and be continuing or would
                arise by reason of payment of the Transaction  Fees or by reason
                of Delivery taking place; and

        (c)     no  Relevant  Bank Event,  Relevant  Bank Change of Law Event or
                Relevant  Bank  Illegality  Event  shall  have  occurred  and be
                continuing.

4.3     Temporary waivers

        The  conditions  specified  in clauses 4.1 and 4.2 are  inserted for the
        sole  benefit  of the  Lessor  and may be waived in whole or in part and
        with or without  conditions by the Lessor provided always that if any of
        the said  conditions are  outstanding  after  Delivery then,  unless the
        Lessor shall have given a specific written waiver or deferral in respect
        thereof, the Lessee shall ensure that each such outstanding condition is
        fulfilled  within  thirty (30) days of the  Delivery  Date and  provided
        further  that the Lessor  shall be  entitled to treat the failure of the
        Lessee to perform  such  outstanding  conditions  within  such period of
        thirty (30) days as a Termination  Event and as a repudiatory  breach of
        this Lease by the Lessee.

4.4     Payment of Transaction Fees

4.4.1   Subject to  satisfaction  of the conditions  precedent to the payment of
        the  Transaction  Fees referred to in clause 4, the Lessor agrees to pay
        the Arrangement Fee to the Arranger,  the Lease Fee to Sovereign Finance
        Plc and the Legal Fee to Messrs Norton Rose.

4.4.2   The  Lessor  shall  not be  entitled  to set off or  withhold  from  the
        Transaction  Fees payable by the Lessor  pursuant to this clause 4.4 any
        amounts due or expressed  to be due from any  Relevant  Party under this
        Lease or any of the Relevant Documents.

4.5     Lessor's conditions precedent

        The obligations of the Lessee under this Lease are conditional  upon the
        Lessee  having  received on or prior to the Delivery  Date the following
        documents and evidence to its satisfaction:

4.5.1   a copy,  certified by a director of the Lessor,  of  resolutions  of the
        board of directors of the Lessor approving the transactions contemplated
        by the Relevant Documents and the execution of the Relevant Documents to
        which the Lessor is a party; and

4.5.2   the  Proceeds  Deed,  the  WDA  Letter,  the  Tax  Contest  Letter,  the
        Indexation  Relief  Letter,  the Lessor  Mortgage,  the Lessor  Proceeds
        Accounts  Assignment and the Quiet Enjoyment Letter duly executed by the
        Lessor,  the Lessor  Support  Letters duly executed by the Lessor Parent
        and the  Supplemental  Agreement  and the Quiet  Enjoyment  Letter  duly
        executed by the Lessor Agent.

5       Delivery and acceptance

5.1     Commencement of Lease Period

        On or before the date  falling  three (3) Banking Days after the service
        of the Delivery Request Notice,  the Lessor  confirming its satisfaction
        with the  conditions  set out in clauses 4.1 and 4.2, the Lessor  shall,
        subject to the  provisions  of clauses 4.1 and 4.2,  deliver the Ship to
        the Lessee  under this  Lease and the Ship shall  become  subject to and
        governed by this Lease,  the Lease Period shall  commence and the Lessee
        shall be deemed to have accepted  delivery of the Ship under this Lease.
        Delivery  shall  be  conclusively  evidenced  by  the  execution  of the
        Protocol of Delivery and Acceptance by the Lessor and the Lessee.

5.2     Condition of Ship Lessee's responsibility

        The Lessee  acknowledges  that the  condition of the Ship on delivery to
        the Lessee shall be the sole responsibility of the Lessee.  Accordingly,
        the Lessee shall not be entitled for any reason  whatsoever to refuse to
        accept  delivery of the Ship under this Lease once the Delivery  Request
        Notice has been served on the Lessor and the Lessor shall have confirmed
        its satisfaction  with the conditions set out in clauses 4.1 and 4.2 and
        the Lessor  shall not be liable for any loss or expense,  or any loss of
        profit,  resulting  directly  or  indirectly  from any defect or alleged
        defect in the Ship.

5.3     Delays in Delivery

        The Lessor shall not be responsible for any loss or expense, or any loss
        of  profit,  arising  from any delay in the  delivery  of, or failure to
        deliver,  the Ship to the Lessee  under  this Lease  where such delay or
        failure is not caused by the wilful  misconduct  or gross  negligence of
        the Lessor or breach of its express obligations under this Lease.

5.4     Cancellation before Delivery

        If for any reason,  other than a default by the  Lessor,  the Ship shall
        not have been delivered to and accepted by the Lessee in accordance with
        clause 5 by 11 April 2003 then the  Lessor  may  cancel  its  obligation
        under this Lease to lease the Ship to the Lessee by giving notice to the
        Lessee to that effect.

5.5     Indemnity for delay and non-delivery

        The Lessee shall (in addition to any other  obligation  it may then have
        under  clause 9 to  indemnify  and hold  harmless  the Lessor as therein
        provided)  indemnify  the Lessor in respect of any  liabilities,  losses
        (other than the loss of profit which, had such delivery occurred without
        delay or at all,  would have accrued to the Lessor as a  consequence  of
        the payment by the Lessee of the Rentals  payable  hereunder),  costs or
        expenses reasonably incurred by the Lessor as a consequence of any delay
        in the  delivery or  non-delivery  of the Ship to the Lessee  under this
        Lease  following  the  Lessor   confirming  its  satisfaction  with  the
        conditions  set  out in  clauses  4.1 and 4.2  (including,  but  without
        prejudice to the generality of the foregoing,  any amounts of principal,
        interest,  fees or other sums  whatsoever  paid or payable on account of
        any funds borrowed and any loss,  premium,  penalty or expense which may
        be incurred in  liquidating  or employing  funds acquired to purchase or
        finance any or all of the Ship and to maintain or fund such  amounts (or
        any part  thereof)  or any other  amount due or to become due under this
        Lease)   save  and  to  the  extent  that  such  delay  in  delivery  or
        non-delivery  arises as a direct consequence of the wilful misconduct or
        gross  negligence  of the  Lessor or breach of its  express  obligations
        under this Lease.

6       Extent of Lessor's liability

6.1     Quiet enjoyment

        The Lessor:

6.1.1   warrants and  undertakes  to the Lessee that,  subject to clauses 17 and
        27, the Lessor shall not interfere during the Lease Period with the use,
        possession and quiet enjoyment of the Ship by the Lessee on the terms of
        this Lease,  provided  that the Lessor shall not be liable to the Lessee
        for or in respect of any interruption to the Lessee's use, possession or
        quiet enjoyment of the Ship which results directly or indirectly, wholly
        or partly,  from any act or omission of any person other than the Lessor
        and which does not,  subject to clause 29, arise in  consequence  of any
        acts of Lessor or any member of the Lessor  Group and which are not acts
        of the  Lessee  acting as agent on behalf of the Lessor or any member of
        the Lessor Group); and

6.1.2   the Lessor further undertakes,  if reasonably  requested to do so by the
        Lessee and at the Lessee's expense,  to take such action as is available
        to it to protect the use,  possession  and quiet  enjoyment  of the Ship
        during  the  Lease  Period  by the  Lessee  from  interference  by third
        parties.

6.2     Limitation of Lessor's liability

        The Lessee expressly agrees and acknowledges that, save only as provided
        in clause 6.1, no condition,  warranty or  representation of any kind is
        or has been  given by or shall be deemed to be or to have been  given by
        or on behalf of the Lessor in respect of the Ship, and  accordingly  the
        Lessee confirms that it has not, in entering into this Lease,  relied on
        any condition, warranty, representation or covenant by or deemed to have
        been made by the Lessor or any person on the  Lessor's  behalf  (whether
        authorised or not), express or implied,  whether arising by law, statute
        or otherwise  in relation to the Ship,  including,  without  limitation,
        warranties  or  representations  as to the  description,  seaworthiness,
        quality,  construction,   suitability,   merchantability,   satisfactory
        quality,  fitness for any purpose, value, state, condition,  appearance,
        finish, safety, durability, design or operation of any kind or nature of
        the  Ship,  and  the  benefit  of  any  such   condition,   warranty  or
        representation by the Lessor is hereby  irrevocably and  unconditionally
        waived by the Lessee.  To the extent  permissible  under applicable law,
        the Lessee also waives any rights which it may have in tort or otherwise
        (including,  without  limitation,  negligence)  in respect of any of the
        matters  referred to above and irrevocably  agrees that the Lessor shall
        have no  greater  liability  in tort or  otherwise  (including,  without
        limitation, negligence) in respect of any such matter than it would have
        in contract  after taking  account of all the foregoing  exclusions.  No
        third party making any  representation  or warranty relating to the Ship
        or any part of the  Ship is the  agent  of the  Lessor  nor has any such
        third party authority to bind the Lessor thereby.

6.3     Unfair Contract Terms Act 1977

        Notwithstanding  the foregoing  provisions of this clause 6 (but without
        prejudice to the indemnities contained in this Lease and the other Lease
        Documents),  nothing  herein  shall  afford  to  the  Lessor  any  wider
        exclusion of any  liability  of the Lessor for death or personal  injury
        than the Lessor may effectively  exclude having regard to the provisions
        of the Unfair Contract Terms Act 1977.

7       Rental

7.1     Rental amounts

        During the Primary  Period the Lessee shall pay  instalments  of Primary
        Rental to the Lessor on each Primary Rental Date and, where  applicable,
        during the Secondary Period instalments of Secondary Rental for the Ship
        and,  throughout the Lease Period, any other Rental in each such case in
        the amounts,  at the times and in the manner  provided in the  Financial
        Schedule.

7.2     Unconditional payment obligations

        The  Lessee's  obligation  to pay  Rental  and make  other  payments  in
        accordance  with any of the Lease  Documents  shall,  subject  to clause
        22.3,  be absolute and  unconditional  irrespective  of any  contingency
        whatsoever  including  (but not  limited  to) (a) any right of  set-off,
        counterclaim,  recoupment,  defence or other  right which  either  party
        hereto may have against the other,  (b) any  unavailability  of the Ship
        for any reason, including, but not limited to, any lack or invalidity of
        title or any other defect in the title, seaworthiness,  merchantability,
        satisfactory  quality,  fitness for any purpose,  condition,  design, or
        operation of any kind or nature of the Ship, or the ineligibility of the
        Ship  for  any  particular  use  or  trade,   or  for   registration  or
        documentation under the laws of any relevant jurisdiction,  or the Total
        Loss of, or any  damage to,  the Ship,  (c) any  failure or delay on the
        part of either party hereto,  whether with or without fault on its part,
        in performing  or complying  with any of the terms or conditions of this
        Lease,  (d) any  insolvency,  bankruptcy,  winding  up,  administration,
        reorganisation,   arrangement,   readjustment   of  debt,   dissolution,
        liquidation  or  similar  proceedings  by or  against  the Lessor or the
        Lessee or (e) any lack of due authorisation of, or other defect in, this
        Lease or any of the other Lease Documents.

7.3     Rental adjustments

        The  calculation  and payment of Rental  during the  Primary  Period are
        subject to adjustment in accordance with the provisions of the Financial
        Schedule.

7.4     Advance payments

        No Rental paid in advance shall (except as expressly contemplated by the
        provisions of this Lease or the  Financial  Schedule) be repayable by or
        recoverable from the Lessor.

7.5     Extent of restriction of Lessee's rights

        Nothing  contained in clause 7.2 shall constitute a waiver by the Lessee
        of any  right  giving  rise to a claim  by the  Lessee  for  damages  or
        specific  performance or any other injunctive  relief against the Lessor
        arising  out of a breach by the  Lessor of its  obligations  under  this
        Lease.

8       Payments, interest and calculations

8.1     Manner of payment

        All  payments  to be made by the  Lessee  under this Lease or any of the
        other  Lease  Documents  shall be made  (unless  specifically  otherwise
        provided  in this  Lease or any of the other  Lease  Documents)  without
        prior demand and in full, without any set-off or counterclaim whatsoever
        and,  subject  as  provided  in  clause  10.3,  free  and  clear  of any
        deductions  or  withholdings  in Sterling  (or, in the case of indemnity
        payments,  in the  currency  in which the cost or  expense  which is the
        subject of the  indemnity  payment is incurred)  for value on the day on
        which  payment is due to the bank  account of the Lessor at Girobank Plc
        of Bridle Road,  Bootle,  Merseyside GIR 0AA,  Account Number  01007246,
        reference Sovereign Finance plc - Payments Account or to such other bank
        account as the Lessor may from time to time have  notified to the Lessee
        in writing not less than five (5) Banking Days prior to the due date for
        payment.

8.2     Payments on Banking Days

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

8.3     Interest on delayed payments

        If the Lessee fails to pay any sum (including,  without limitation,  any
        sum  payable  pursuant  to this  clause 8.3) on its due date for payment
        under this Lease or any of the other Lease  Documents,  the Lessee shall
        pay to the Lessor on demand interest on such sum from the due date up to
        the  date of  actual  payment  (after  as well as  before  any  relevant
        judgment) at the Default Rate.

8.4     Calculation of interest

        All interest and other  payments of an annual nature under this Lease or
        any of the other Lease  Documents shall accrue from day to day and shall
        be  calculated  on the  basis of the  actual  days  elapsed  and a three
        hundred and sixty-five  (365) day year in the case of a Sterling payment
        and  payments  in other  currencies  where that is the normal  basis for
        interest  calculations  by banks in such  currencies and a three hundred
        and  sixty  (360)  day  year  in the  case  of  payments  in  all  other
        currencies.

8.5     Certificates

        Any  certificate  or  determination  of the  Lessor  as to any  rate  of
        interest or any other amount  payable  under any of the Lease  Documents
        shall,  in the absence of manifest  error,  be conclusive and binding on
        the Lessee but such certificate or determination  shall not override the
        express provisions of the Financial  Schedule.  The Lessor shall provide
        the  Lessee  with such  information  pertaining  to any  certificate  or
        determination referred to in this clause 8.5 (including any calculations
        set out therein and the basis upon which  those  calculations  have been
        prepared)  as  it  considers,  acting  reasonably,  appropriate  in  the
        circumstances existing at such time.

8.6     Currency indemnity

        If any sum due from the  Lessee  under  this  Lease or any of the  other
        Lease Documents or under any order or judgment given or made in relation
        thereto has to be converted from the currency (the "first  currency") in
        which  the  same is  payable  under  this  Lease or the  relevant  Lease
        Documents  or under such order or judgment  into another  currency  (the
        "second  currency")  for the  purpose of (a) making or filing a claim or
        proof  against the  Lessee,  (b)  obtaining  an order or judgment in any
        court or other  tribunal or (c) enforcing any order or judgment given or
        made in  relation  to such Lease  Document,  the Lessee  shall on demand
        indemnify  and  hold  harmless  the  Lessor  from and  against  any loss
        suffered as a result of any difference  between (i) the rate of exchange
        used for such  purpose to  convert  the sum in  question  from the first
        currency into the second currency and (ii) the rate or rates of exchange
        at which the Lessor may in the ordinary course of business  purchase the
        first currency with the second currency upon receipt of a sum paid to it
        in satisfaction, in whole or in part, of any such order, judgment, claim
        or proof.  Any amount due from the Lessee under this clause 8.6 shall be
        due as a  separate  debt and shall not be  affected  by  judgment  being
        obtained for any other sums due under or in respect of this Lease or any
        of the other Lease  Documents  and the term "rate of exchange"  includes
        any  premium  and  costs of  exchange  payable  in  connection  with the
        purchase of the first currency with the second currency.

8.7     Double recovery

        Notwithstanding anything to the contrary contained in this Lease and any
        of the Lease Documents,  to the extent that the Lessor has recovered any
        liability from the Lessee pursuant to the terms of any particular  Lease
        Document  the same  liability  shall not also be  recoverable  under the
        provisions of any of the other Lease Documents.

9       Costs and indemnities

9.1     Ship and corporate administration related expenses

        Subject to clause 9.10,  the Lessee shall  promptly pay and discharge or
        cause to be paid or  discharged,  as soon as the same become payable and
        indemnify and keep the Lessor fully  indemnified  at all times on a full
        indemnity  basis from and against all costs or expenses  (other than the
        payment to the  Arranger of the  Arrangement  Fee,  payment to Sovereign
        Finance  Plc of the Lease Fee,  payment of the Legal Fee and Taxes which
        are  otherwise the subject of clause 10 or which would be so subject but
        for the operation of clause 10.8)  reasonably  incurred by the Lessor in
        respect of, or arising from:

9.1.1   the delivery, import, export, registration,  classification,  ownership,
        possession,   control,  use,  management,   manning,   victualling,  the
        provision  of  bunkers  and  lubricating   oils,   leasing,   insurance,
        maintenance,  repair,  dry-docking,   survey,  refurbishment,   service,
        overhaul,  modification,  change,  alteration,  loss,  damage,  storage,
        laying-up,   removal,   redelivery,   transfer  to  required  redelivery
        location,  sale or  disposal  of,  in or to the  Ship,  and all costs or
        expenses which are reasonably incurred by the Lessor and which otherwise
        arise in  connection  with the Ship or the  performance  of the Lessee's
        obligations under this Lease or any of the other Lease Documents; and

9.1.2   the corporate administration in Bermuda of the Lessor including, without
        limitation,  any amounts payable by the Lessor to Codan Services Limited
        pursuant to the  administration  agreement executed on or about the date
        hereof between Cedar Services Limited, the Lessor and the Lessor Agent.

9.2     Transaction related expenses

        Whether  or not the Ship is  delivered  to the Lessee  pursuant  to this
        Lease,  the Lessee shall (to the extent that the same has not been taken
        into account in accordance with the Financial  Schedule in computing the
        amount of any Rental or any  adjustments  thereto or would be taken into
        account  but for  paragraph  10 of the  Financial  Schedule)  pay to the
        Lessor on demand:

9.2.1   all expenses  (including  legal,  advisory,  printing and  out-of-pocket
        expenses)  reasonably  incurred  by the  Lessor in  connection  with the
        negotiation, preparation and execution of the Transaction Documents (but
        provided  that  Delivery  does  occur,  excluding  such  amount  of such
        expenses paid by the Lessor as referred to in Variable Assumption 1.19.3
        in the Financial Schedule);

9.2.2   all expenses (including the Cost of Lessor's Management Time) reasonably
        incurred by the Lessor in respect of any  amendment or extension  of, or
        the  granting  of any  waiver  or  consent  under,  any of the  Relevant
        Documents  and/or in accordance with any action required to be taken, or
        documents  required to be provided,  pursuant to clauses 3.3.4, 3.6, 12,
        14.2 or 32 (it being agreed  that,  for the purpose of  determining  the
        entitlement  of the Lessor to recover  the Cost of  Lessor's  Management
        Time,  such  entitlement   shall  arise  in  respect  of  any  event  or
        circumstance  which is not  contemplated  by the  Relevant  Documents or
        which arises  otherwise than in the ordinary  course of managing a lease
        transaction  of the  type  contemplated  by  this  Lease  (and,  for the
        avoidance of doubt,  actions required to be taken, or documents required
        to be produced  pursuant to clauses 3.3.4, 3.6, 12, 14.2 or 32 shall not
        be treated as having  arisen in the ordinary  course of managing  such a
        lease transaction)); and

9.2.3   all expenses  (including the Cost of Lessor's  Management  Time,  legal,
        survey and other costs)  properly  incurred by the Lessor  following the
        occurrence and during the continuance of a Termination Event or Relevant
        Event or in  contemplation  of, or otherwise  in  connection  with,  the
        enforcement  of, or  preservation  of any  rights  under,  the  Relevant
        Documents,  or in respect of a breach  (other  than by the Lessor or the
        Lessor  Agent)  of any  representation,  warranty,  consent,  agreement,
        condition  or  stipulation  therein  contained,  or in  respect  of  the
        repossession of the Ship.

        The Lessor shall notify the Lessee as soon as practicable after any Cost
        of Lessor's  Management  Time has started to accrue in  accordance  with
        this Lease and the other  Relevant  Documents  (advising the Lessee,  if
        practicable,  which of its  personnel  are  senior  officers  and junior
        officers) and the Lessor agrees that it shall not invoice the Lessee for
        the first two  thousand  Pounds  ((pound)2,000)  of the Cost of Lessor's
        Management Time.

        All expenses  payable pursuant to this clause 9.2 shall be paid together
        with any  Irrecoverable  VAT,  and in the currency in which the same are
        incurred by the Lessor.

9.3     Indemnity for non-payment by Lessee

        The Lessee  shall on demand  indemnify  and hold  harmless  the  Lessor,
        without  prejudice to any of the Lessor's  other rights under any of the
        Relevant Documents,  from and against (other than to the extent that the
        Financial  Schedule  specifically  provides,  or would  provide  but for
        paragraph 10 thereof, for there to be a corresponding  payment of Rental
        or to the extent  that the Lessor has not been  compensated  pursuant to
        the provisions of clause 8.3):

9.3.1   any costs or expenses which the Lessee has agreed to pay and which shall
        be claimed  from or  assessed  against or paid by the Lessor and against
        any  liability  incurred by the Lessor by reason of any delay or failure
        of the Lessee to pay any such costs or expenses; and

9.3.2   any  Taxes   which  the  Lessee  has  agreed  to  pay  and  which  shall
        nevertheless  be claimed from or assessed  against or paid by the Lessor
        and against any liability  incurred by the Lessor by reason of any delay
        or  failure  of the  Lessee  to pay any such  Taxes  including,  without
        limitation,  any  delay  or  failure  of the  Lessee  to make  any  such
        deduction or  withholding  as is referred to in clause 10.3 or by reason
        of any increased payment as is referred to in clause 10.3 not being made
        on the due date for such payment.

9.4     Indemnities relating to the Ship

        Subject  to  clause  9.10,   but  without   prejudice  to  the  Lessee's
        obligations under clauses 9.1 to 9.3 inclusive, the Lessee agrees at all
        times,  whether  before,  during or after the Lease Period (but if after
        the Lease  Period to the extent  that the same arise by matters  arising
        out of or in  respect  of the  Lease  Period),  to  indemnify  and  hold
        harmless the Lessor and each of the other  Indemnified  Persons from and
        against  all costs,  expenses,  payments  (other than the payment to the
        Arranger of the Arrangement Fee, payment to Sovereign Finance Plc of the
        Lease Fee and  payment  of the Legal  Fee),  charges,  losses,  demands,
        liabilities,  claims, actions,  proceedings (whether civil or criminal),
        penalties,  fines, damages, judgments, orders or other sanctions, liens,
        salvage and general  average  (other than Taxes which are  otherwise the
        subject of clause 10 (or which would be so subject but for the operation
        of clause  10.6 or 10.8))  (in this  clause 9  together  referred  to as
        "Indemnity  Losses")  which  may be  incurred  by,  or made or  asserted
        against, the Lessor or any other Indemnified Person at any time:

9.4.1   relating to, or arising  directly or indirectly in any manner or for any
        cause or reason  whatsoever  out of, the  design,  nature,  description,
        manufacture,   construction,   testing,  delivery,  acceptance,  import,
        export, registration,  flag, classification,  certification,  ownership,
        possession,  control,  use,  management,  operation,  manning,  crewing,
        navigation,  victualling,  supply or servicing  (whether at sea or not),
        provision  of  bunkers  and  lubricating  oils,  leasing,   sub-leasing,
        insurance,   maintenance,   repair,  overhaul,   dry-docking,   surveys,
        refurbishment,  condition,  service,  modification,  change, alteration,
        loss, damage,  storage, laying up, removal,  repossession,  re-delivery,
        return,  sale  or  disposal  of,  in or to the  Ship,  or  otherwise  in
        connection  with the Ship or which arise out of the use or  operation of
        any other  vessel  owned by or  chartered  to the Lessee or any  company
        associated  with,  the Lessee or which arise out of any other  claims of
        whatsoever  nature made  against the Lessee,  or any company  associated
        with the Lessee,  or relating to loss or destruction of or damage to any
        property,  or death or injury  of, or other  loss of  whatsoever  nature
        suffered by, any person  caused by,  relating to, or arising from or out
        of (in each case whether  directly or  indirectly)  any of the foregoing
        matters;

9.4.2   which may at any time be made or brought on the ground  that any design,
        article  or  material  in the  Ship  or  the  operation  or use  thereof
        constitutes an  infringement of patent,  intellectual  property right or
        any other right whatsoever;

9.4.3   in  preventing  or  attempting  to  prevent  the  arrest,  confiscation,
        seizure, taking in execution, impounding, forfeiture or detention of the
        Ship,  or in securing or  attempting  to secure the release of the Ship;
        and

9.4.4   as a  consequence  of any  default  in  payment by the Lessee of any sum
        under any of the Lease  Documents  when due or any other  default by the
        Lessee in the due and punctual  performance of its obligations under any
        of the Lease  Documents  (to the extent  that the Lessor has not already
        been compensated  pursuant to any of the other provisions of this Lease)
        including,  without limitation, any exercise by the Lessor of its rights
        under the Standby  Documents and any action  required to be taken by the
        Lessor  in  connection  with the  exercise  of any such  rights  and the
        Standby Loan (as defined in the Proceeds  Deed)  required to be provided
        to the  Standby  Purchaser  in  connection  with the  Standby Put Option
        Agreement.

9.5     Conduct of claims

        Unless  and until a Relevant  Event  shall have  occurred,  and  without
        prejudice to, or constituting a pre-condition  to, the Lessor's right to
        be indemnified pursuant to, this Lease:

9.5.1   the Lessor shall notify the Lessee upon  receiving a claim in respect of
        which the Lessor is or may become  entitled to an indemnity under clause
        9.4 as soon as practicable following receipt of such claim;

9.5.2   subject to the prior written  approval of the Lessor (such  approval not
        to be unreasonably withheld or unreasonably  delayed),  the Lessee shall
        be  entitled  to take,  in the name of the  Lessor,  such  action as the
        Lessee shall see fit to defend or avoid any such Indemnity Losses as are
        referred to in clauses  9.4.1,  9.4.2,  9.4.3 or 9.4.4 or to recover the
        same from any third party, subject to the Lessee first ensuring that the
        Lessor is  indemnified  and, if the Lessor so  requires,  secured to its
        reasonable satisfaction against all Indemnity Losses thereby incurred or
        to be incurred and all Taxes incurred or to be incurred as a consequence
        thereof; and

9.5.3   the Lessor shall,  to the extent that it is practical so to do,  consult
        with the Lessee before making any payment to a third party in respect of
        such Indemnity Losses as are referred to in clauses 9.4.1,  9.4.2, 9.4.3
        or 9.4.4 and,  to the extent  that the Lessee is entitled to take action
        to avoid such  Indemnity  Losses in  accordance  with  clause  9.5.2 and
        subject to the Lessee first ensuring that the Lessor is indemnified  and
        secured to the Lessor's  reasonable  satisfaction  against all Indemnity
        Losses  thereby  incurred or to be incurred and all Taxes incurred or to
        be incurred as a consequence  thereof,  the Lessor shall at the Lessee's
        request co-operate with the Lessee in taking such action.

        Notwithstanding  the above,  the Lessor shall not be obliged to take any
        such action  where the Lessor  notifies  the Lessee that it considers in
        its  conclusive  opinion but acting in good faith that it is or would be
        materially  prejudicial  to the  interests  of the  Lessor  Group or any
        member  thereof  for such  action to be taken.  The Lessor  shall not be
        obliged to give any reasons for such  notification  but, when  providing
        the Lessee with such  notification,  the Lessor will  provide the Lessee
        with  written  confirmation  from a board member of (a) the Lessor Agent
        where the claim  referred  to in clause  9.5.1 shall be in respect of an
        amount less than or equal to five million Pounds  ((pound)5,000,000)  or
        (b) the Lessor Parent where the claim  referred to in clause 9.5.1 shall
        be  in  respect  of  an  amount  in  excess  of  five   million   Pounds
        ((pound)5,000,000),  that the  decision  not to take any such action was
        taken after  consideration by the senior  management of the Lessor Agent
        or, as the case may be, the Lessor Parent. Any amount or any increase in
        any amount  payable  by the  Lessor as a result of any delay  consequent
        upon the operation of clauses  9.5.2 and 9.5.3 shall,  for the avoidance
        of doubt, be for the account of the Lessee.

9.6     VAT and indemnity claims

        Any amounts  payable  pursuant to clause 9.4 and/or  clause 9.5 shall be
        paid together with any  Irrecoverable  VAT, and in the currency in which
        the same are incurred by the Lessor.

9.7     Environmental Indemnity

        Subject to clauses 9.5 and 9.10,  the Lessee shall  indemnify the Lessor
        on demand in respect of all costs, claims,  expenses,  losses,  demands,
        liabilities,  penalties and fines of whatever nature (including, without
        limitation,  those  arising  under  Environmental  Laws)  which  may  be
        incurred or made against the Lessor) at any time relating to, or arising
        directly  or  indirectly  in any  manner  or for  any  cause  or  reason
        whatsoever out of an  Environmental  Claim made or asserted  against the
        Lessor  which would or could not have been brought if the Lessor had not
        entered into this Lease or any of the other Relevant Documents.

9.8     Survival of indemnities

        Notwithstanding  anything to the contrary contained in this Lease or any
        of the other  Lease  Documents  and  without  prejudice  to any right to
        damages or other claim which the Lessee may have at any time against the
        Lessor under this Lease,  the indemnities by the Lessee in favour of the
        Lessor and the other Indemnified Persons contained in this Lease and the
        other  Lease   Documents   shall  continue  in  full  force  and  effect
        notwithstanding  any  breach  of the  terms of this  Lease or any of the
        other Lease Documents  (including any fundamental or repudiatory breach)
        by the Lessor or the Lessee,  the termination of the leasing of the Ship
        to the Lessee  under this Lease,  the  repudiation  by the Lessor or the
        Lessee of this Lease,  or the  expiration  or  termination  of the Lease
        Period by effluxion of time or otherwise.

9.9     Interest on indemnity payments

        Moneys  becoming due by the Lessee to the Lessor  under the  indemnities
        contained  in this  clause 9 or  elsewhere  in this  Lease or any of the
        other  Lease  Documents  shall be paid on demand  made by the Lessor and
        shall be paid  together  with  interest  thereon at the Default  Rate in
        respect of the  period  from the date on which the  Lessor  suffered  or
        incurred the  Indemnity  Loss until the date of payment by the Lessee to
        the Lessor (after as well as before judgment) and the Lessor agrees that
        it will issue a demand hereunder as soon as reasonably practicable after
        determining  that it has suffered or incurred any such  Indemnity  Loss,
        and will make such determination as soon as reasonably practicable after
        becoming aware that it may have suffered or incurred an Indemnity Loss.

9.10    Exclusions from general indemnity

        The  indemnities  contained in clauses 9.1, 9.4 and 9.7 shall not extend
        to any costs, expenses,  payments,  charges, losses, demands,  statutes,
        claims, actions, proceedings (whether and or criminal) penalties, fines,
        damages,  judgments,  orders  or other  sanctions,  liens,  salvage  and
        general average:

9.10.1  to the  extent  that the same  arises  from any act or  omission  of the
        Lessor or any  other  Indemnified  Person  which  constitutes  the gross
        negligence or wilful  misconduct of the Lessor or such other Indemnified
        Person;

9.10.2  to the  extent it is caused by any  failure on the part of the Lessor to
        comply with any of its express  obligations under any of the Transaction
        Documents to which the Lessor is a party Provided that any breach by the
        Lessor of its obligations  under any of the Transaction  Documents shall
        not be  included  within the ambit of this  clause  9.10.2 to the extent
        that such breach is itself  caused by, or arises by means of, any act or
        omission  of the Lessee or any other  member of the Lessee  Group of any
        Transaction Document;

9.10.3  in respect of which the Lessor  and/or any other  Indemnified  Person is
        expressly  indemnified  under any other Lease  Document or to the extent
        that the Lessor  and/or any other  Indemnified  Person has actually been
        indemnified by any other person;

9.10.4  to the extent that the Lessor or any  Indemnified  Person has  recovered
        such liability pursuant to clause 10; or

9.10.5  to  the  extent  that  such  liability  is  taken  into  account  in the
        calculations contained in the Financial Schedule in computing the Rental
        payable under this Lease.

9.11    Mitigation

        If the Lessee shall become  liable to indemnify  the Lessor or any other
        Indemnified  Person pursuant to this clause 9, the Lessor and the Lessee
        shall,  provided  no  Relevant  Event has  occurred  and is  continuing,
        consult in good faith for a period not  exceeding  the earlier of thirty
        (30)  days and the date the  Lessor  or such  other  Indemnified  Person
        is/are  obliged  to satisfy or  discharge  such  losses and each of them
        shall, at the cost of the Lessee, use all reasonable endeavours to avoid
        (or  reduce   the   amount)   of  the   losses   giving   rise  to  such
        indemnification.

9.12    Lessor as trustee

        The Lessor shall, to the extent that clause 9.13 is not  applicable,  be
        the agent and trustee of each of the other  Indemnified  Persons for the
        purpose of the  indemnities  given in their  favour under this Lease and
        any amounts  received by the Lessor in such  capacity  shall be held for
        the other Indemnified Persons severally.

9.13    Pass through of indemnity benefits

        Without  duplicating  the  liabilities  of the Lessee  under this Lease,
        where in this clause 9 an  indemnity  is expressed to be for the benefit
        of any  Indemnified  Person,  the Lessor  shall be entitled to indemnify
        such  Indemnified  Person  on the same  terms  mutatis  mutandis  as the
        indemnities  expressed to be for the benefit of such Indemnified  Person
        in this clause 9 and the Lessee shall  indemnify the Lessor and hold the
        Lessor  harmless on a full indemnity  basis from and against each amount
        paid or payable by the Lessor to such Indemnified  Person under any such
        indemnity.

10      Taxation

10.1    General

        The Lessee shall on demand  indemnify the Lessor from and against all or
        any Taxes  imposed on or  payable by the Lessor  arising by reason or in
        consequence  (whether alone or in  conjunction  with any other reason or
        circumstance) of this Lease or any of the other Relevant  Documents,  or
        in respect of  instruments  delivered  hereunder or  thereunder,  or the
        manufacture,  purchase, sale, disposal,  supply,  delivery,  management,
        control,  possession,  ownership,  leasing,  use, operation,  existence,
        design,  condition,  construction,   testing,  alteration,  maintenance,
        service,  repair,  overhaul,  import or export from any country or area,
        return,  recovery,  storage  or sale of the  Ship  or  upon  receipt  of
        earnings  arising  therefrom  or on or in respect of any  profits of any
        other party to any of the  Relevant  Documents  or which arise or become
        payable  as a result  (whether  alone or in  conjunction  with any other
        matter or  circumstance)  of anything done in response to any request by
        the Lessee.

10.2    Gross-up of indemnity payments

10.2.1  Sums payable to the Lessor under this Lease or any of the other Relevant
        Documents by way of indemnity or reimbursement shall be calculated on an
        after-tax  basis.  Accordingly,  if and to the extent  that any such sum
        payable to the Lessor is determined by the Lessor, acting in good faith,
        to be taxable  in the hands of the  Lessor,  such sum  shall,  where the
        payment is to be made by the Lessee,  be increased  to, or where payment
        is to be made by any other  person,  the Lessee shall pay to the Lessor,
        such amount which (after subtracting any Taxation suffered by the Lessor
        on the  increased  payment  or, as the case may be,  the  payment by the
        Lessee,  and after  taking  into  account  any  deduction  for  Taxation
        purposes available to the Lessor and the timing of any such deduction in
        respect of the discharge by the Lessor of any corresponding liability to
        a third  party)  shall  equal the  amount  which the  Lessor  would have
        received had the sum payable by the Lessee or such other person not been
        taxable in the hands of the Lessor.  If any sum payable to the Lessor is
        initially  paid on the basis that it is not  taxable in the hands of the
        Lessor and it is  subsequently  determined  to be taxable or vice versa,
        such  adjustment  and payment  shall be made  between the Lessor and the
        Lessee as the  Lessor  shall  certify  as  appropriate  to  restore  the
        after-tax  position  of the  Lessor to that which it would have been had
        the adjustment not been necessary.

10.2.2  If and to the extent  that any sum (the  "indemnity  sum")  constituting
        (directly  or  indirectly)  an  indemnity  to the Lessor but paid by the
        Lessee to any person other than the Lessor,  shall be treated as taxable
        in the hands of the Lessor,  the Lessee shall pay to the Lessor such sum
        (the "compensating  sum") as (after subtracting any Taxation suffered by
        the Lessor on the  compensating  sum and after  taking into  account any
        deductions  for Taxation  purposes  which in the  Lessor's  sole opinion
        acting  reasonably  in good faith are available to the Lessor in respect
        of any  corresponding  payment  treated  as made by the  Lessor  to such
        person) shall  reimburse  the Lessor for any Taxation  suffered by it in
        respect of the indemnity sum.

10.2.3  For the purposes of this clause 10.2 a sum shall be deemed to be taxable
        in the  hands of the  Lessor  if it falls to be taken  into  account  in
        computing  the  profits  or  gains of the  Lessor  for the  purposes  of
        Taxation and if so the Lessor shall be deemed to have suffered  Taxation
        thereon at the rate of Taxation  applicable  to the Lessor's  profits or
        gains for the period in which the payment falls to be taken into account
        for the purposes of such Taxation.

10.3    Withholding Taxes

10.3.1  If at any time any applicable law, regulation or regulatory requirement,
        (whether  or not  having  the  force  of law  but in  respect  of  which
        compliance by banks or other financial institutions or institutions of a
        similar nature to the Lessor in the relevant  jurisdiction  is generally
        customary) or any  governmental  authority,  monetary  agency or central
        bank requires any deduction or  withholding in respect of Taxes from any
        payment  due to the Lessor or any other  Indemnified  Person  under this
        Lease or any of the other  Relevant  Documents  the Lessee shall (unless
        otherwise agreed under or pursuant to any Relevant Document):

        (a)     if the payment is to be made by the Lessee, increase the payment
                in respect of which the deduction or  withholding is required to
                the extent  necessary to ensure  that,  after the making of such
                deduction or  withholding,  the Lessor  receives on the due date
                for such  payment a net sum equal to the sum which it would have
                received had no such deduction or  withholding  been required to
                be made;

        (b)     if the  payment  is to be  made by any  person  other  than  the
                Lessee,  pay  directly  to the  Lessor  such sum as will,  after
                taking  into  account  any  deduction  or  withholding  which is
                required to be made in respect of such sum, enable the Lessor to
                receive  on the due date for  payment a net sum equal to the sum
                which the  Lessor  would  have  received  in the  absence of any
                obligation to make a deduction or withholding;

        (c)     if  paragraph  (a) applies the Lessee  shall pay to the relevant
                authority within the period for payment  permitted by applicable
                law the full amount of the deduction or withholding  (including,
                but without  prejudice to the generality of the  foregoing,  the
                full amount of any deduction or  withholding  from any increased
                amount paid pursuant to this clause 10.3);  and (d) if paragraph
                (a) applies the Lessee  shall  furnish to the Lessor  within the
                period for payment  permitted  by  applicable  law,  appropriate
                receipts  evidencing  payment to the  relevant  authority of all
                amounts deducted or withheld as aforesaid.

10.3.2  If the Lessor  determines  acting  reasonably and in good faith that the
        Lessor or a member of the Lessor  Group has  retained and utilised a tax
        benefit by reason of any deduction or  withholding as aforesaid (and the
        Lessor shall endeavour to realise or receive such a tax benefit provided
        it is not otherwise  disadvantaged  by doing so), which, in the Lessor's
        determination  acting  reasonably  and in good faith is referable to any
        deduction or  withholding  as  aforesaid,  subject to the Lessee  having
        complied  with clause  10.3.1,  the Lessor will,  as soon as  reasonably
        practicable  thereafter,  reimburse to the Lessee the  payment,  or such
        part of the payment as will leave the Lessor or such Indemnified  Person
        (after such  reimbursement)  in no better and no worse  position than it
        would have been in if no such deduction or withholding had been required
        to be made, provided always that:

        (a)     the  Lessor  shall be sole judge  (acting in good  faith) of the
                amount of any such benefit and of the date on which such benefit
                is received or realised and it shall give a certificate  setting
                out  the  basis  of the  computation  of the  amount  of any tax
                benefit referred to in clause 10.3.2;

        (b)     the  Lessor  and each  such  Indemnified  Person  shall  have an
                absolute  discretion  as to  the  arrangement  of  its  Taxation
                affairs  and,  in  particular,  the order in which it employs or
                claims credits, refunds and allowances available to it;

        (c)     if,  following  any such  reimbursement  by the Lessor,  the tax
                benefit  in  respect  of which  such  reimbursement  was made is
                disallowed in whole or in part by any applicable taxing or other
                authority,  the Lessee shall, upon demand, pay to the Lessor the
                amount necessary to restore the after tax position of the Lessor
                or such Indemnified  Person to that which it would have been had
                no adjustment under this proviso (c) been necessary; and

        (d)     the Lessor  shall not be obliged to make any such  reimbursement
                if, by doing so, it would contravene the terms of any applicable
                notice, direction or requirement (having the force of law).

        Provided that if the Lessee requests the Indemnified Person, in writing,
        to make an  application  for  relief  (whether  in  whole or in part) in
        respect of any deduction or withholding  required by law pursuant to the
        provisions of a double tax treaty,  the Indemnified Person shall (at the
        cost of the  Lessee)  take such  action as the Lessee  shall  reasonably
        request  to  make  such  application  to an  applicable  Tax  Authority.
        Provided that in  determining  whether any request under this proviso is
        reasonable,  the Lessor, in its capacity as an Indemnified Person, shall
        be entitled to take into account the interests of the other customers of
        the Lessor Group, in its absolute  discretion  acting in good faith, and
        the future  liability to Tax of the members of the Lessor Group.  If the
        Indemnified Person subsequently obtains a repayment (whether in whole or
        in part) of such  deduction or  withholding  from that Tax  Authority in
        circumstances  where the Lessee has made an increased  payment or paid a
        compensating  sum under this clause 10.3 the  Indemnified  Person shall,
        provided that the Indemnified  Person has received all amounts which are
        then due and  payable  to it under any  provisions  of this Lease or the
        other Relevant Documents pay to the Lessee such amount as will leave the
        Indemnified  Person  in no  better  and in no  worse  position  than the
        Indemnified  Person would have been in if the  deduction or  withholding
        had not been required.

10.4    Non-deductibility

        If the Lessor is  required to pay any sum under this Lease or any of the
        other Relevant  Documents and such sum is payable out of or represents a
        reimbursement  of an amount  which is brought  into account in computing
        the profits or gains of the Lessor for the  purposes of Taxation and the
        Lessor  Determines  acting in good faith that such  payment  will not be
        allowed to the Lessor as a deductible trading expense or as a basis for,
        or otherwise  as, a deduction  or off-set for  Taxation  purposes in the
        Accounting  Period of the Lessor in which it is required to be paid, the
        Lessee  shall  (without  prejudice  to the  generality  of clause  1.7),
        subject to any  restrictions  set out in the Proceeds  Deed,  pay to the
        Lessor  such  amount  as shall  put the  Lessor  in the  same  after-tax
        position as the Lessor  would have been in had the payment  been allowed
        as a deductible  trading  expense or as a basis for, or otherwise  as, a
        deduction or off-set as aforesaid. If any such payment is initially made
        on the basis that it is a deductible trading expense, or that it will be
        allowed as a basis for, or  otherwise  as, a deduction or off-set of the
        Lessor for Taxation  purposes in the Accounting  Period of the Lessor in
        which it is incurred and it is subsequently determined that it is not so
        deductible or allowed, or vice versa, such adjustments and payments,  if
        any,  shall be made  between the Lessor and the Lessee as the Lessor may
        certify as appropriate in order to restore the after-tax position of the
        Lessor  to that  which it would  have been had the  adjustment  not been
        necessary.

10.5    Undertakings concerning Taxation

        The Lessee  undertakes that it will,  taking into account any time limit
        for the production of information imposed by any Tax Authority,  furnish
        when the Lessor shall so require, such information as may be required to
        be so  furnished  by the  Lessor to the Board of  Inland  Revenue  or an
        Inspector of Taxes regarding the leasing of the Ship or the use to which
        it is being or has been put,  and  promptly  upon request by the Lessor,
        furnish  to  the  Lessor  such  information,  books,  records  or  other
        documents  in the  possession  of or under the control of the Lessee (or
        photocopies  thereof)  as the Lessor may  request in order to enable the
        Lessor to comply with the provisions of sections 118, 119 and 120 CAA or
        to  respond  to a request  for  information  given to the  Lessor by the
        Inland Revenue.

10.6    No double counting

        Notwithstanding  the  preceding  provisions  of  this  clause  10,  if a
        liability to Taxation of the Lessor arises (or would have arisen but for
        an  insufficiency  of taxable profits) or an event giving rise to such a
        liability  occurs  (which would not have been,  or given rise to, such a
        liability had all of the Variable  Assumptions  proved to be correct) by
        reason of which the  Lessee is (or  would,  but for this  provision  be)
        liable to make a payment under the  preceding  provisions of this clause
        10 and, in consequence of any such Variable  Assumptions  proving not to
        be correct,  the amount of Rental  payable  under this Lease is adjusted
        upwards (or would be so adjusted but for the  provisions of paragraph 10
        of  the  Financial   Schedule)   then  the  Lessee  shall  not  in  such
        circumstances  be liable to make any payments to the Lessor or otherwise
        in respect of Taxes  under this  clause 10 to the extent that the Lessor
        is (or, as the case may be, would be) fully  compensated (or would be so
        compensated  but for the  provisions  of paragraph  10 of the  Financial
        Schedule)  in  respect  of  such  liability  or  event  by  such  upward
        adjustment to the amount of such Rental.

10.7    Duties and other taxes

        The Lessee shall pay all stamp, documentary,  registration or other like
        duties or Taxes (including any such Taxes payable by the Lessor) imposed
        on or in  connection  with  any  of the  Relevant  Documents  and  shall
        indemnify  the Lessor  against  any  liability  arising by reason of any
        delay or omission by the Lessee to pay such duties or Taxes.  The Lessor
        by way of covenant but not as a condition  precedent to the liability of
        the Lessee  hereunder  shall,  except to the extent that its business or
        taxation  interests  are  otherwise   prejudiced,   use  its  reasonable
        endeavours to avoid unnecessarily rendering the Lessee liable under this
        clause.

10.8    Exclusion from tax indemnities

        The Lessee  shall not be obliged to  indemnify  the Lessor  under clause
        10.1 in respect of any Taxes in respect of the following  (including any
        interest, penalties or fines thereon):

10.8.1  any Tax  liability  which is imposed by way of deduction or  withholding
        from any  payment  due from the  Lessee  under  this Lease or any of the
        other Relevant Documents to the Lessor in circumstances where the Lessee
        is required to make any payment or increased  payment in respect thereof
        under  clause  10.3 (the  Lessee's  liability  for which shall be as set
        forth in clause 10.3); or

10.8.2  Taxes  which are  imposed  by reason of the wilful  misconduct  or gross
        negligence of the Lessor, or any affiliate thereof or to the extent they
        result  from any  breach  of, or a failure  on the part of the Lessor to
        comply with, any of the terms of this Lease or any of the other Relevant
        Documents to which the Lessor is a party; or

10.8.3  any Taxes  assessed  against  the  Lessor by  reference  to its  overall
        income,  profits or gains  attributable to any Rental or Termination Sum
        or any adjustment thereto actually  receivable  hereunder or its overall
        income,  profits  or gains,  if any,  realised  in  connection  with the
        ultimate  disposal of the Ship or arising out of a Total Loss.  Provided
        that, for the avoidance of doubt,  the interest (if any) accruing by the
        Lessor in  respect  of  amounts  held from time to time in the  Lessor's
        Proceeds  Accounts  and/or any foreign  exchange  gain  relating to such
        amounts shall not be treated as realised in connection with the ultimate
        disposal of the Ship or arising out of a Total Loss; or

10.8.4  any Taxes to the  extent  that they  would not have  arisen  but for the
        reasonably avoidable delay or failure by the Lessor in the filing of tax
        returns or any other  documents  or the payment of Taxes  assessed on or
        payable by the Lessor in the United  Kingdom  which delay or failure has
        not been  expressly  consented  to, or requested by the Lessee or unless
        such a failure  or delay by the  Lessor  results  from a failure  by the
        Lessee  promptly  to  provide  the Lessor  with  correct,  suitable  and
        adequate  information  to enable  the  Lessor to file the  relevant  tax
        return or pay such Taxes or other amounts; or

10.8.5  where the  Lessee is liable to  compensate  the Lessor in respect of the
        liability under any other provision of this Lease and has discharged its
        obligation in respect thereof; or

10.8.6  any Taxes  which  would not have been  imposed but for, or to the extent
        increased  by reason of an  assignment  or  transfer  by an  Indemnified
        Person of its rights or  obligations  under  this Lease or any  Relevant
        Document or by reason of the  bankruptcy or insolvency of an Indemnified
        Person; or

10.8.7  any Taxes or Tax Liability to the extent that the same has resulted in a
        change of Assumption  for the purposes of the Financial  Schedule  which
        has  either   resulted  in  an  adjustment  to  any  Primary  Rental  or
        Termination  such or which  would have given rise to such an  adjustment
        but for the  limitations on adjustment  contained in paragraph 10 of the
        Financial Schedule.

10.9    VAT

10.9.1  If the  Lessor  makes any  supply  to the  Lessee  for  Value  Added Tax
        purposes  pursuant  to or in  connection  with this  Lease or any of the
        other Relevant  Documents or any  transaction  or document  contemplated
        herein or therein, the Lessee shall promptly upon receipt of a valid VAT
        invoice (or other  evidence  that the Lessor has been obliged to account
        for VAT in respect of that supply in accordance with applicable law) pay
        to the Lessor an amount equal to any Value Added Tax which is payable in
        respect of that supply.

10.9.2  If and to the extent that any payment or other  consideration to be made
        or  furnished  by the  Lessor  to any  person,  other  than the  Lessee,
        pursuant  to or in  connection  with  this  Lease  or any  of the  other
        Relevant Documents or any transaction or document contemplated herein or
        therein may be  increased or added to by reference to (or as a result of
        any  increase in the rate of) any Value Added Tax,  the Lessee shall pay
        to the  Lessor  within  ten (10) days of  demand an amount  equal to any
        Value Added Tax in relation thereto that proves to be Irrecoverable VAT.

10.9.3  No payment or other  consideration to be made or furnished by the Lessor
        to the Lessee pursuant to or in connection with this Lease or any of the
        other Relevant  Documents or any  transaction  or document  contemplated
        herein or therein may be  increased  or added to by  reference to (or as
        the  result of any  increase  in the rate of) any Value  Added Tax which
        shall be or may become  chargeable  in respect of the taxable  supply in
        question  provided that if the Lessor  determines in good faith that any
        amount  of such  Value  Added  Tax is not  Irrecoverable  VAT it  shall,
        promptly following such determination, pay to the Lessee an amount equal
        to the amount of that Value Added Tax determined not to be Irrecoverable
        VAT, and on presentation of a valid VAT invoice by the Lessee.

10.9.4  The Lessee and the Lessor agree to co-operate  with a view to minimising
        any  Irrecoverable VAT suffered by either party under any transaction or
        document contemplated by any Relevant Document but so that neither party
        shall be  required  to do  anything  which  would  not be good  business
        practice and legal or which would  involve any adverse  consequences  to
        it.

10.10   Tonnage Tax

10.10.1 The Lessee  undertakes  that it has not,  as at the date of this  Lease,
        made a tonnage tax election or been  included in a tonnage tax group for
        the  purposes  of Section 82 and  Schedule 22 of the Finance Act 2000 (a
        "Tonnage Tax Election").

10.10.2 If any member of the Lessee Group, or any Time  Charterer,  or any other
        charterer  makes a Tonnage Tax Election or becomes a member of a tonnage
        tax group then the Lessee  will give the  Lessor  written  notice of the
        making of that election or its membership of a tonnage tax group and the
        date from which that election is effective or such membership  commenced
        within thirty (30) Banking Days after the making of that election or the
        commencement of such membership.

10.10.3 The Lessee will enter into the joint certificate required to be provided
        by the Lessor and the Lessee  under  paragraph  93 of Schedule 22 to the
        Finance Act 2000.

10.10.4 The Lessee  agrees that it will  provide the Lessor on an ongoing  basis
        with such information as may be properly required to be furnished by the
        Lessor to any Tax Authority  regarding the  transaction  contemplated by
        the  Transaction  Documents as may be required to be furnished under the
        provisions  of Schedule 22 to the Finance Act 2000,  including,  without
        limitation,  any information to be provided by the Lessor and the Lessee
        to the Inland  Revenue  pursuant to  paragraph  93 of Schedule 22 to the
        Finance Act 2000.

11      General undertakings

11.1    Information and compliance undertakings

        The Lessee  undertakes  with the Lessor that from the date of this Lease
        and  thereafter  so long as any moneys are owing under this Lease or any
        of the other Lease Documents it will:

11.1.1  Notification of Relevant Event

        promptly  inform the Lessor of any  occurrence of which it becomes aware
        which would or is  reasonably  likely to  adversely  affect any Relevant
        Party's  ability to perform its  obligations  under any of the  Relevant
        Documents and,  without  limiting the generality of the foregoing,  will
        inform the Lessor of any Relevant  Event  promptly upon  becoming  aware
        thereof and will from time to time,  if so requested by the Lessor where
        the Lessor has good reason to believe that a Termination  Event may have
        occurred,  confirm  to the  Lessor in writing  that,  save as  otherwise
        stated in such  confirmation,  no Termination  Event has occurred and is
        continuing;

11.1.2  Consents and authorisations

        without  prejudice to clauses 2.2 and 4, obtain or cause to be obtained,
        maintain  in full force and effect and comply in all  material  respects
        with  the  conditions  and  restrictions  (if  any)  imposed  in,  or in
        connection  with, every consent,  authorisation,  licence or approval of
        governmental  or public bodies or authorities or courts and do, or cause
        to be done, all other acts and things,  which in each case may from time
        to time be necessary or desirable under applicable law for the continued
        due performance of all of any Relevant Party's obligations under each of
        the Relevant Documents;

11.1.3  Pari passu

        ensure  that its  obligations  under  this  Lease  and the  other  Lease
        Documents  shall all times rank at least pari passu with all its present
        and future  unsecured  and  unsubordinated  Indebtedness  other than any
        obligations which are mandatorily  preferred by law and not by contract;

11.1.4  Financial statements

        prepare  Annual  Financial  Statements in accordance  with Relevant GAAP
        consistently  applied in respect  of each  financial  year and cause the
        same to be reported on by the Lessee's  Auditors  and prepare  Quarterly
        Financial   Statements  on  the  same  basis  as  the  Annual  Financial
        Statements  and  deliver  a copy of the  same to the  Lessor  as soon as
        practicable but not later than one hundred and eighty (180) days (in the
        case of Annual Financial  Statements) or sixty (60) days (in the case of
        Quarterly  Financial  Statements)  (or,  in any such case,  such  longer
        period as may be agreed in writing by the  Lessor)  after the end of the
        financial  period to which they relate  provided always that in the case
        of the Annual  Financial  Statements the Lessee shall deliver  unaudited
        draft Annual  Financial  Statements no later than one hundred and twenty
        (120) days after the end of the financial period to which they relate if
        the audited Annual Financial Statements are not ready at that time;

11.1.5  Delivery of reports

        deliver to the Lessor a copy of every material report, circular,  notice
        or like document  issued by the Lessee to its  shareholders or creditors
        generally, in each case at the time of issue thereof;

11.1.6  Provision of further information

        provide the Lessor with such financial and other information  concerning
        the Lessee,  the Sub-Lessee  and the Lessee Parent and their  respective
        affairs  as the  Lessor  may from  time to time  reasonably  request  in
        writing;

11.1.7  Obligations under Lease Documents

        duly and  punctually  perform  each of its  obligations  under the Lease
        Documents;

11.1.8  No merger or consolidation

        not  without  the  prior  written   consent  (such  consent  not  to  be
        unreasonably withheld) of the Lessor merge or consolidate with any other
        company  or  person  which is not a member  of the  Lessee  Group and to
        notify the Lessor of any merger or  consolidation  with another  company
        which is a member of the Lessee Group;

11.1.9  Financial Ratios

        ensure  that:

        (a)     Free Available Cash

                at all times the Free  Available Cash shall not be less than the
                Minimum Free  Available  Cash at the relevant  time.  The Lessor
                agrees  that for the purpose of  satisfying  this  covenant  the
                requirement to evidence  Minimum Free Available Cash for amounts
                or Free  Available  Cash in excess of  fifteen  million  Dollars
                ($15,000,000) may be satisfied by the Lessee providing  evidence
                to the Lessor that the Lessee  Parent has made  available to the
                Lessee an  unconditional  on demand  loan in an amount  equal to
                such  excess  amounts  and which loan is capable of being  drawn
                down on an unqualified and  unrestricted  basis by the Lessee at
                any time;

        (b)     Working Capital

                as at the end of each quarterly  period during and at the end of
                each financial  year of the Lessee,  the ratio of Current Assets
                to  Current  Liabilities   (excluding  the  current  portion  of
                long-term  debt)  shall not be less than one point five (1.5) to
                (1); and

        (c)     Leverage

                as at 31  March  2003  and as at  the  end  of  each  subsequent
                quarterly period during and at the end of each financial year of
                the  Lessee,  the ratio of Net Debt as at the end of such period
                to  Annualised  EBITDA  calculated  by reference to such quarter
                shall not exceed:

                (i)     six point  five (6.5) to one (1) for  quarterly  periods
                        ending during or at the end of 2003;

                (ii)    six (6) to one (1) for quarterly  periods  ending during
                        and at the end of 2004; and

                (iii)   five  (5)  to  one  (1)  for  all  subsequent  quarterly
                        periods;

11.1.10 Dividends

        at any time  after the date  falling  five (5) days  after the  Delivery
        Date,  not without the prior written  consent of the Lessor,  declare or
        pay any  dividends  unless  the  Lessee  can  evidence  to the  Lessor's
        satisfaction  that the Free  Available Cash is not less than thirty five
        million Dollars ($35,000,000); and

11.1.11 Certificate of compliance with clause 11.1.9

        at the same time as the  Lessee  delivers  to the  Lessor,  pursuant  to
        clause 11.1.4,  a copy of the Annual  Financial  Statements or Quarterly
        Financial  Statements  (as the case may be) the Lessee  shall  provide a
        statement  signed by the  Chief  Financial  Officer  or  another  senior
        officer of the Lessee (in  substantially the form set out in Schedule 6)
        confirming:

        (a)     the respective amounts of:

                (i)     the Cash Balances and Minimum Free Available Cash;

                (ii)    Current  Assets,  Current  Liabilities  and the  current
                        portion of long-term debt;

                (iii)   Annualised EBITDA and Interest Expense; and

                (iv)    Net Debt,

                in  respect  of or,  as the  case  may be,  as at the end of the
                financial  period  expiring  on the date as at and for which the
                relevant financial  statements were prepared (or, in the case of
                Annualised  EBITDA,  calculated  by  reference  to the three (3)
                month period expiring on such date) (or, in the case of Interest
                Expense, for the twelve (12) month period expiring on such date)
                and that such amounts were  calculated in  accordance  with this
                Lease and Relevant GAAP;

        (b)     that such Annual  Financial  Statements  or Quarterly  Financial
                Statements were prepared in accordance with Relevant GAAP or, if
                not so prepared,  setting forth full details of the  adjustments
                required to be made to such statements to reflect  Relevant GAAP
                as  necessary  to  calculate  the amounts  referred to in clause
                11.1.9;

        (c)     that as at the date to which the relevant  financial  statements
                are made up, the Lessee was in compliance with the covenants and
                undertakings set out in clause 11.1.9 (or, if it was not in such
                compliance,  indicating  the  extent of the breach and the steps
                intended to be taken to remedy the same); and

        (d)     that,  as at the date not more than  seven (7) days prior to the
                delivery of the certificate,  no Relevant Event has occurred and
                is  continuing  (or,  if such is not the  case,  specifying  the
                same).

11.2    Protection of Lessor's rights

        The Lessee hereby further  undertakes with the Lessor that from the date
        of this Lease until the end of the Lease Period it will:

11.2.1  Disposal of the Ship

        not  attempt or hold  itself  out as having any power to sell,  agree to
        sell,  transfer or otherwise dispose of or (except to avoid loss of life
        or personal injury or as otherwise agreed pursuant to clause 22) abandon
        the Ship or any share or interest therein;

11.2.2  Encumbrances

        not create or agree or purport to create any Encumbrance  over the Ship,
        any  share or  interest  therein  or in the  Insurances  or  Requisition
        Compensation   or  any  part   thereof   (other   than   for   Permitted
        Encumbrances);

11.2.3  Notification of arrest

        notify the Lessor  promptly by  facsimile  of any arrest or detention of
        the Ship or any exercise or purported  exercise of a lien or other claim
        on the Ship or the Insurances or any part thereof;

11.2.4  Prevention of and release from arrest

        without  prejudice to clause 29.3  promptly pay and discharge or procure
        that  there is paid or  discharged  (by  settlement,  providing  bail or
        procuring  the  provision of security or otherwise as the  circumstances
        may allow or require)  all debts,  damages,  liabilities  and  outgoings
        whatsoever  which have given or may give rise to maritime,  statutory or
        possessory  liens  on,  or claims  enforceable  against  the Ship or the
        Insurances  or any part  thereof  and,  in the  event of a writ or libel
        being filed against the Ship or the  Insurances or any part thereof,  or
        of any of the same being  arrested,  attached or levied upon pursuant to
        legal process or purported legal process or in the event of detention of
        the Ship in exercise or purported  exercise of any such lien or claim as
        aforesaid,  procure the release of the Ship and the Insurances from such
        arrest,  detention,  attachment  or levy or,  as the  case  may be,  the
        discharge of the writ or libel  promptly  (and, in the case of an arrest
        of the Ship, within the period provided therefor in clause 26.1.17) upon
        receiving notice thereof by providing bail or procuring the provision of
        security or otherwise as the circumstances may require;

11.2.5  No pledging of Lessor's credit

        not  pledge  the  credit of the  Lessor  for any  maintenance,  service,
        repairs,  drydocking, or modifications to, or changes or alterations in,
        the Ship or for any other purpose whatsoever;

11.2.6  Protection of Lessor's rights in relation to the Ship

        not do or permit to be done any act or thing which might  jeopardise the
        title,  rights and  interest of the Lessor in the Ship or omit or permit
        to be omitted  to be done any act  within  the  control of the Lessee or
        other  member of the Lessee  Group  which might  prevent  that title and
        those rights and interest from being jeopardised; and

11.2.7  Ownership of Ship

        generally on all  occasions  when the  ownership of the Ship is relevant
        make clear to third  parties  that the same is not the  property  of the
        Lessee.

12      Sub-leasing

12.1    Restrictions on sub-leasing

        Save for the  Sub-Lease,  the Lessee will not and will  procure that the
        Sub-Lessee will not at any time without the prior written consent of the
        Lessor  (which  the  Lessor  shall have full  liberty  to  withhold  its
        consent) and, if such consent is given,  only subject to such conditions
        as the Lessor  may  require,  part with the  possession  or  operational
        control of the Ship  (except to the Manager  pursuant to the  Management
        Agreement or for the purpose of maintenance, service, repair or overhaul
        work or any modifications,  changes or alterations  permitted under this
        Lease) or sub-let the Ship.  The Lessee shall  provide the Lessor with a
        certified  copy of any  sub-lease  consented  to pursuant to this clause
        promptly following execution of the same.

12.2    Terms of sub-lease

        The Lessee will not and will procure that the Sub-Lessee will not at any
        time sub-let the Ship on a bareboat or demise  charter basis pursuant to
        any sub-lease unless:

12.2.1  the relevant  sub-lease shall contain such terms and provisions as shall
        ensure that the sub-lessee thereunder,  if complying with the said terms
        and  conditions,  will  not  do  anything  which  would  contravene  the
        provisions of this Lease (including,  without limitation, the provisions
        of clause 13.2.4  relating to qualifying  purpose  during the designated
        period as therein  referred  to and  clause  13.1) and not  prevent  the
        Lessee from complying with the provisions of this Lease;

12.2.2  any such  sub-lease  will not result in any of the Variable  Assumptions
        becoming incorrect;

12.2.3  by its terms such  sub-lease  prohibits  sub-leasing  by the  sub-lessee
        without the prior written  consent of the Lessor (which the Lessor shall
        not unreasonably withhold);

12.2.4  the  sub-lease  shall not involve or purport to involve any  transfer of
        title or  interest  in the Ship and  shall not in any way  discharge  or
        diminish any of the Lessee's obligations to the Lessor under this Lease;

12.2.5  any such  sub-lease  will not be  capable  of  expiring  after the Lease
        Period,  will be expressed to be subject and  subordinate  to this Lease
        and any  sub-lessee  will confirm  such  subordination  arrangements  in
        writing to the Lessor on terms satisfactory to the Lessor; and

12.2.6  any  sub-lessee  shall  as a  condition  to the  effectiveness  of  such
        sub-lease  agree to adhere to the  provisions  of the  Proceeds  Deed or
        otherwise  agree  to  the  provisions  of  this  Lease  relating  to the
        application of proceeds of Insurances in respect of the Ship.

12.3    Undertakings concerning the Sub-Lease

        The Lessee hereby  undertakes  with the Lessor that throughout the Lease
        Period:

12.3.1  it will not, except with the previous  written consent of the Lessor and
        save to the extent otherwise  provided in the Quiet Enjoyment Letter and
        the  Lessee's  Quiet  Enjoyment  Letter,  agree to any  variation of the
        Sub-Lease  or  release  the  Sub-Lessee  from  any of  the  Sub-Lessee's
        obligations  under the Sub-Lease or waive any breach of the Sub-Lessee's
        obligations  thereunder  or consent to any such act or  omission  of the
        Sub-Lessee as would otherwise constitute such breach;

12.3.2  it will not claim or  exercise  any lien upon  sub-freights  which might
        otherwise be available to it under the Sub-Lease;

12.3.3  it will perform its  obligations  under the  Sub-Lease  and use its best
        endeavours to procure that the Sub-Lessee  shall perform its obligations
        under the Sub-Lease;

12.3.4  the  Sub-Lease  shall not in any  circumstances  be  determined by it by
        reason of any breach or alleged  breach thereof by the Lessee unless the
        Lessor   shall   first  have  given  its  consent  in  writing  to  such
        determination provided always that any determination of the Sub-Lease by
        the Lessee after such  consent is given shall be without  responsibility
        on the part of the Lessor who shall be under no liability  whatsoever in
        event that such  determination  be  thereafter  adjudged to constitute a
        repudiation of the Sub-Lease by the Lessee; and

12.3.5  at the  request  of  the  Lessor  it  will  supply  to  the  Lessor  all
        information, accounts and records that may be reasonably necessary or of
        assistance  to enable the Lessor to verify the amount of all payments of
        charterhire and other amounts payable under the Sub-Lease.

13      Use and trade of the Ship

13.1    Permitted use

        Subject to the other  terms and  conditions  of this Lease and the other
        Lease  Documents,  the Lessee shall (save as herein  provided)  have the
        full and exclusive use, control and command of the Ship during the Lease
        Period and may operate or employ it within any lawful trade for which it
        is suitable.

13.2    Undertakings concerning use

        The Lessee hereby  undertakes  with the Lessor that throughout the Lease
        Period it will:

13.2.1  Ship's registration

        not to do or suffer to be done anything whereby the documentation of the
        Ship for the time being in accordance with the provisions of clause 14.2
        may be forfeited or imperilled;

13.2.2  Employment

        not employ the Ship or permit its  employment  in any  manner,  trade or
        business which is forbidden by  international  law, or which is unlawful
        or illicit under the law of any relevant jurisdiction,  or in any manner
        whatsoever   which  may  render  it  liable  to  destruction,   seizure,
        confiscation,  penalty or sanctions  and, in the event of hostilities in
        any part of the world  (whether  war be declared  or not),  not enter or
        trade to or  continue  to trade in any zone which is declared a war zone
        by any  Government  Entity or by the insurers  unless the prior  written
        consent of the Lessor is obtained  and such special  insurance  cover as
        the Lessor may require shall have been effected by the Lessee and at its
        expense;

13.2.3  Payment of outgoings and evidence of payments

        pay in accordance with good business  practice all tolls, dues and other
        outgoings  whatsoever in respect of the Ship and the Insurances and keep
        proper  books of account  in  respect  of the Ship and,  as and when the
        Lessor  may  so  reasonably  require,  make  such  books  available  for
        inspection  on behalf of the Lessor and  furnish  satisfactory  evidence
        that  the  wages  and   allotments   and  the   insurance   and  pension
        contributions  of the Master and crew are being  promptly and  regularly
        paid and that all  deductions  from  crew's  wages in  respect of United
        Kingdom tax  liability  are being  properly  accounted  for and that the
        Master has no claim for  disbursements  other than those incurred by him
        in the ordinary course of trading on the voyage then in progress;

13.2.4  Use for a qualifying purpose

        not use the Ship or permit the Ship to be used and procure that the Ship
        is not used during the designated period (as defined in section 106 CAA)
        so as to result in the  application  of sections 109, 110, 111, 112, 113
        and 117 CAA and  shall  immediately  notify  the  Lessor  if at any time
        within  such  designated  period  the  Ship is  used  for  leasing  to a
        non-resident  within the  meaning of section 105 (2) CAA and also notify
        the Lessor of any event or matter which under  sections 118, 119 and 120
        CAA ought to be notified by the Lessor to the Board of Inland Revenue or
        any  Inspector  of Taxes  in  connection  with  the Ship or the  leasing
        thereof  and shall  promptly  furnish to the Lessor  when the Lessor may
        require  such  information  as may be required to be so furnished by the
        Lessor  to the  Board  of the  Inland  Revenue  or  Inspector  of  Taxes
        regarding the leasing of the Ship or the use to which it is being put or
        has  been  put,  in  order to  enable  the  Lessor  to  comply  with the
        provisions  of  sections  118,  119 and 120 CAA or to  respond to such a
        request;

13.2.5  Anti-Drug Abuse

        without  prejudice  to clause  13.2.2,  take all  necessary  and  proper
        precautions to prevent any  infringements  of the Anti-Drug Abuse Act of
        1986  of  the  United  States  of  America  or any  similar  legislation
        applicable to the Ship in any jurisdiction in or to which the Ship shall
        be employed or trade; and

13.2.6  Bills of Lading

        except as otherwise required pursuant to the Time Charter,  procure that
        all Bills of  Lading  issued  for  carriage  of goods by the Ship  shall
        contain a Paramount  clause  incorporating  any legislation  relating to
        carrier's  liability for cargo compulsorily  applicable in the trade or,
        if  no  such  legislation  exists,  that  such  Bills  of  Lading  shall
        incorporate the British  Carriage of Goods by Sea Acts 1971 and that all
        such Bills of Lading  shall also contain the amended New Jason clause as
        approved by the Baltic International  Maritime Council from time to time
        and the  Both-to-Blame  Collision  clause and without  prejudice  to the
        provisions  of clause 33.5,  provide that the General  Average,  if any,
        shall be settled according to the York-Antwerp Rules of 1994 in London.

14      Title, registration, name and house flag

14.1    Title

        The Lessee  shall have no right,  title or interest in or to the Ship or
        any part  thereof  except  the  right to use the same upon the terms and
        conditions contained in this Lease. It is hereby expressly declared that
        the Lessee shall not have any option or right to acquire title to or any
        proprietary  interest in the Ship or any part thereof.  The Lessee shall
        not sell or purport to sell the Ship  otherwise  than in exercise of its
        rights under clause 3.6.  Subject to clauses 6.1 and 6.2, nothing herein
        contained  shall be construed as imposing any liability on the Lessor to
        the Lessee in respect of or arising out of the acts or  omissions of any
        third party  (including  any  charterer or lessee of any other vessel or
        assets of the Lessor  unless  that third party is a member of the Lessor
        Group) affecting the Lessee or the Ship or otherwise.

14.2    The  Lessee  may at any time  and from  time to time  during  the  Lease
        Period,  request the Lessor to transfer  the register of the Ship to any
        port and/or to re-document the Ship under laws of any jurisdiction other
        than  the port  and/or  jurisdiction  at which  the Ship is for the time
        being registered  and/or under whose laws the Ship is for the time being
        documented.  If the Lessor  approves of such transfer of register and/or
        re-documentation  of the Ship,  the Lessor shall,  at the request of the
        Lessee,  co-operate  with and permit  the  Lessee to take all  necessary
        steps to comply with such request and thereafter  shall during the Lease
        Period  co-operate with the Lessee to take such action as the Lessee may
        reasonably require to maintain the documentation of the Ship at the port
        to which the  register of the Ship is so  transferred  and/or  under the
        laws of the jurisdiction  under whose laws the Ship is so re-documented.
        For the  purposes of this clause 14.2,  the Lessor  shall in  accordance
        with the provisions of this Lease and the Proceeds Deed not unreasonably
        withhold its approval to the transfer of the register of the Ship to any
        port  and/or  the  re-documentation  of the Ship  under  the laws of any
        jurisdiction  and/or  under whose flag the Lessor is  entitled,  without
        breach of any applicable laws, to register and/or re-document the Ship.

        The Lessee  undertakes that if at any time it requests a transfer of the
        register and/or the  redocumenting  of the Ship following a request from
        the Time Charterer, and if the Lessor agrees to such request, the Lessee
        shall  use its best  endeavours  to  obtain  the  agreement  of the Time
        Charterer  that the consent to such  transfer is given on the basis that
        the Time  Charterer  agrees to a  subsequent  transfer  of the  register
        and/or  the  redocumenting  of  the  Ship  under  British  flag  in  the
        circumstances described below in this clause 14.2.

        If the Ship is, in accordance  with the provisions of this Lease and the
        Proceeds Deed, no longer  registered at any time under British flag and,
        in the reasonable  opinion of the Lessor acting in good faith,  it shall
        become impossible, unlawful, impracticable or undesirable for the Lessor
        to  maintain  the  documentation  of the  Ship  under  the  laws  of any
        jurisdiction  under  which the Ship is then  documented  (other than the
        United Kingdom),  the Lessor shall give notice thereof to the Lessee and
        the Lessor and the Lessee shall  forthwith  enter into  negotiations  in
        good faith with a view to agreeing upon an alternative  jurisdiction for
        the documentation of the Ship, but if no such agreement shall be reached
        within thirty (30) days after the Lessor shall have given such notice to
        the Lessee,  the Lessor  shall be at liberty to take and/or  require the
        Lessee to take such action to re-document  the Ship as a British ship in
        the United  Kingdom  and/or to transfer  the registry of the Ship to the
        United  Kingdom and in any such case the Lessee shall do all that may be
        necessary  on its part to give  effect to such  re-documentation  and/or
        transfer of register. Where the Lessee has complied with its obligations
        under the second  paragraph of this clause 14.2,  the Lessor agrees that
        it shall not  require the  reflagging  or  redocumenting  of the Ship to
        British  flag where it shall be  impracticable  or  undesirable  for the
        Lessor to  maintain  the  documentation  of the Ship under the flag of a
        particular  jurisdiction  where such reflagging or  redocumenting of the
        Ship shall  result in a breach of the Time  Charter or any  sub-charters
        entered into by the Time Charterer pursuant to the Time Charter.

        Without  prejudice to the  generality of the provisions of clause 9, the
        Lessee shall  indemnify and hold harmless the Lessor against all losses,
        costs,   expenses  and  liabilities  of  whatsoever   nature  (including
        penalties,  claims,  demands,  orders or judgments) which the Lessor may
        suffer  or incur and  which  arise  directly  or  indirectly  out of the
        re-documentation of the Ship in accordance with this clause 14.2.

14.3    Name and house flag

        The Ship shall be painted in such colours, display such insignia and fly
        such house flag as the Lessee may  require.  The Lessee shall notify the
        Lessor of any intended change in the name of the Ship.

14.4    Proceeds Deed

        The arrangements  concerning the transfer of flag or registry  contained
        in this  clause 14 shall be subject to the  provisions  of clause 8.7 of
        the Proceeds Deed.

15      Maintenance and operation

15.1    Possession and control of Ship by Lessee

        During  the  Lease  Period  the Ship  shall,  subject  to the  terms and
        conditions of this Lease, be in the full and exclusive possession and at
        the  absolute  disposal  of the  Lessee for all  purposes  and under its
        complete  control in every respect and the Master,  officers and crew of
        the Ship shall be the  servants of the Lessee,  or during the  Sub-Lease
        Period,  the  Sub-Lessee  (or any other  permitted  sub-lessee)  for all
        purposes whatsoever.

        Notwithstanding any other provision of this Lease, and without prejudice
        to any of the  obligations  of the Lessee under this Lease or any of the
        other Lease Documents  imposing any higher standard of performance  upon
        the Lessee,  the Lessee shall make,  and shall have sole  responsibility
        for making, all such arrangements as may be necessary to ensure that the
        Ship is fit to operate at sea without serious danger to human life.

15.2    Undertakings concerning maintenance and operation during Lease Period

        The Lessee further  undertakes with the Lessor that throughout the Lease
        Period and thereafter, whilst the Lessee continues to have possession of
        the Ship, until the sale of the Ship it will:

15.2.1  Maintenance of classification; compliance with regulations

        maintain the  Classification as the class of the Ship and to comply with
        and ensure that the Ship at all times  complies  with the  provisions of
        the  Merchant   Shipping  Acts  and  all  regulations  and  requirements
        (statutory  or  otherwise)  from  time to  time  applicable  to  vessels
        registered  under British flag or otherwise  applicable to the Ship, her
        Master,  officers  and crew  wherever  the Ship may proceed or trade and
        (without  prejudice  to the  generality  of the  foregoing)  at its  own
        expense maintain in force for the Ship all safety,  radio,  loadline and
        other  certificates  whatsoever  and all licences and permits  which may
        from  time to time be  prescribed  by any  legislation  in  force in the
        United Kingdom or other applicable jurisdiction;

15.2.2  Supply and crewing

        by its  own or the  Sub-Lessee's  procurement  (which  may  include  the
        engagement  of  the  Manager  to  provide  certain  services  under  the
        Management Agreement),  man, victual,  navigate,  operate, supply, fuel,
        and repair the Ship whenever required during the Lease Period;

15.2.3  Surveys

        submit  the Ship to  continuous  surveys  and such  periodical  or other
        surveys as may be required for classification purposes,  comply with all
        recommendations  and  requirements  of  the  Classification  Society  in
        accordance  with  their  terms and  supply to the  Lessor  copies of all
        survey reports issued in respect thereof;

15.2.4  Repair

        keep the  Ship and  every  part of it in a good and  efficient  state of
        repair, in efficient operating condition,  seaworthy in all respects and
        in  accordance  with  good  maintenance  practice  (fair  wear  and tear
        excepted and having  regard to the type and age of the Ship) and procure
        that all repairs to, or replacement of, any damaged,  worn or lost parts
        or equipment  are  effected in such manner (both as regards  workmanship
        and quality of materials) as not to materially diminish the value of the
        Ship without the prior written consent of the Lessor;

15.2.5  Drydocking

        drydock the Ship and clean and paint her underwater  parts in accordance
        with good  commercial  practice  for  vessels of the type and age of the
        Ship and, in any event, in accordance with the requirements from time to
        time of the Classification Society;

15.2.6  Inspection of the Ship

        permit the Lessor by surveyors or other persons appointed by it for such
        purpose to board the Ship at annual  intervals  during the Lease  Period
        and after the  occurrence of a Termination  Event which is continuing at
        such intervals as the Lessor  considers  appropriate  for the purpose of
        inspecting her and afford all proper facilities for such inspections and
        for this  purpose  give the  Lessor  reasonable  advance  notice  of any
        intended   dry  docking  of  the  Ship   (whether  for  the  purpose  of
        classification,  survey or otherwise).  The cost of such inspections and
        surveys properly  incurred by the Lessor shall be paid by the Lessee (if
        a Relevant  Event has occurred and is continuing  or if such  inspection
        reveals any  material  failure to comply with the  Lessee's  maintenance
        obligations under this Lease) or by the Lessor (if no Relevant Event has
        occurred and is continuing or no such material failure is revealed.)

        All time taken in respect of such  inspection  or survey shall form part
        of the Lease Period.  All  inspections  and surveys of the Ship prior to
        the  occurrence  of a  Termination  Event which is  continuing  shall be
        carried  out at such  times  and  places  and in such  manner  as not to
        interfere with the use,  operation,  maintenance  and repair as required
        under the Time  Charter  or other  contractual  arrangements  with third
        parties,  of the Ship but the  Lessor  shall not be obliged to carry out
        such inspections only during periods of drydocking;

15.2.7  Verification reports

        provide   to  the   Lessor   certified   copies  of  all   reports   and
        recommendations  of any safety  inspector or other  regulatory body from
        time to time issued in respect of the  compliance or otherwise  with any
        statutes and  regulations  from time to time in force regarding the safe
        operation, management, maintenance and integrity of the Ship;

15.2.8  Manuals and technical records

        maintain all such other records, logs, manuals, technical data and other
        materials and  documents  which are required to be maintained in respect
        of the Ship to comply with any applicable  laws or the  requirements  of
        the  Classification  Society and keep accurate,  complete and up to date
        logs and records of all voyages made by the Ship and of all maintenance,
        repairs,  alterations,  modifications  and additions to the Ship and, on
        reasonable  advance  notice  from the  Lessor,  permit the Lessor or its
        representatives  at any time to examine and take copies of such logs and
        records and other records;

15.2.9  Information regarding casualties

        furnish the Lessor with full  information  regarding any single casualty
        or other  accident  or damage to the Ship which  shall  involve  repairs
        costing more than the Casualty Amount;

15.2.10 Modification; removal of parts; equipment owned by third parties

        except as  required  pursuant to clause  3(e) of the Time  Charter,  not
        without  the prior  written  consent of the Lessor (and then only on and
        subject to such terms as the Lessor may agree):

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

        (b)     permanently  remove  any  material  part  of  the  Ship  or  any
                equipment  the value of which is such that its removal  from the
                Ship  would  materially  reduce  the  value of the Ship  without
                replacing the same with equivalent  parts or equipment which are
                owned by the Lessor free from Encumbrances (other than Permitted
                Encumbrances); or

        (c)     install on the Ship any  equipment  owned by a third party which
                cannot be  removed  without  causing  significant  or  permanent
                damage to the structure or fabric of the Ship;

15.2.11 Information

        promptly  furnish  the Lessor with all such  information  as it may from
        time to time  reasonably  require  regarding the Ship,  her  employment,
        position and engagements,  particulars of all towages and salvages,  and
        copies  of all  charters  and other  contracts  for her  employment  and
        related information, or otherwise howsoever concerning her;

15.2.12 Manager

        not without the previous consent in writing of the Lessor (and then only
        on and  subject  to such  terms as the  Lessor  may  agree)  permit  the
        Sub-Lessee  to replace  the  Manager or appoint a manager of the Ship or
        allow a manager of the Ship to be  appointed  (and for the  purposes  of
        this Lease  "manager"  shall  include any  shipmanager  or other  person
        providing to the Lessee or the Sub-Lessee analogous specialised services
        in respect of the Ship);

15.2.13 Notification of certain events

        notify the Lessor forthwith by facsimile  thereafter confirmed by letter
        of:

        (a)     any damage to the Ship requiring repairs the cost of which might
                exceed the Casualty Amount;

        (b)     any  occurrence  in  consequence  of  which  the Ship has or may
                become a Total Loss;

        (c)     any requisition of the Ship for hire;

        (d)     any  requirement  or  recommendation  made by any insurer or the
                Classification  Society or by any competent  authority  which is
                not, or cannot be, complied with in accordance with its terms;

        (e)     any claim in an amount in excess of the Casualty  Amount (or the
                equivalent  in any other  currency)  arising  as a result of any
                serious or  potentially  serious  injury to a third party caused
                by, or in connection with, the Ship;

        (f)     any substantial damage to property in an amount in excess of the
                Casualty Amount (or the equivalent in any other currency) caused
                by, or in connection with, the Ship;

        (g)     any  assistance  which  has been  given to the  Ship  which  has
                resulted or may result in a lien for salvage being acquired over
                the Ship;

        (h)     any other event which occurs in  connection  with the Ship which
                affects or might  materially and adversely  affect the rights of
                the Lessor or involves or might  involve  any  material  loss or
                liability;

        (i)     the making of any Environmental Claim for an amount in excess of
                the Casualty  Amount (or the  equivalent in any other  currency)
                against the Lessee or the Ship;

        (j)     the occurrence of any Environmental Incident which may give rise
                to any such  Environmental  Claim for an amount in excess of the
                Casualty Amount (or the equivalent in any other currency); or

        (k)     any drydocking of the Ship;

15.2.14 Repairer's liens

        not without the previous written consent of the Lessor put the Ship into
        the possession of any person for the purpose of work being done upon her
        in an amount  exceeding or likely to exceed the Casualty  Amount  unless
        (a)  such  person  shall  first  have  given  to  the  Lessor  in  terms
        satisfactory  to it, a written  undertaking  not to exercise any lien on
        the Ship for the cost of such work or  otherwise  or (b) no  Termination
        Event has occurred and is continuing, the cost of the work to be done on
        the Vessel is covered by insurances and the underwriters  have agreed to
        make  payment  direct to the  person who is to carry out the work or (c)
        the Lessee can demonstrate to the Lessor's reasonable  satisfaction that
        it has access to committed  funds in an amount  sufficient  to cover the
        cost of such work;

15.2.15 Health and safety

        take such steps as are  reasonably  practicable  to ensure that the Ship
        and all  constituent  parts  thereof  will be safe and  without  risk to
        health when  properly used and (without  prejudice to the  generality of
        the foregoing):

        (a)     take such steps as are reasonably practicable to ensure that any
                defects  in the Ship and all  constituent  parts  thereof  which
                could be or cause a danger  to  safety  and/or a risk to  health
                shall be made good;

        (b)     for such purpose, have a detailed inspection of the Ship carried
                out from time to time including all electrical,  fluid,  oil and
                gas connections  (being either supplies to, or discharges  from,
                the Ship) and all constituent parts thereof;

        (c)     take  such  action  as is  reasonably  practicable  to see  that
                appropriate safety measures are adopted; and

        (d)     not use or permit the Ship or any  constituent  parts thereof to
                be used beyond their limits and capacities;

15.2.16 No operational interest

        procure that the Lessor is not at any time represented as carrying goods
        or  passengers or providing any other service on or from the Ship, or as
        being in any way connected or associated with any operations or carriage
        or  other  service  which  may  be  undertaken  by  the  Lessee  or  the
        Sub-Lessee,  or as having any operational interest in, or responsibility
        for, the Ship;

15.2.17 Safe operation

        take all  reasonable  steps to  secure  that the Ship is  navigated  and
        operated  in a proper,  safe and  seaman-like  manner  and in the manner
        prescribed  by any  legislation  in force in the  United  Kingdom or any
        other applicable  jurisdiction for the time being and ensure that, where
        applicable,  the Ship is at all times  manned and  operated  by properly
        licensed  and/or  qualified  persons and that such  persons at all times
        comply with all applicable laws relating to such manning and operation;

15.2.18 Fitness to go to sea

        procure  that the Ship  shall at all  times be fit to go to sea  without
        serious  danger  to  human  life (by  reason  of the  condition,  or the
        unsuitability  for its purpose,  of either the Ship or its  machinery or
        equipment  or any  part of the Ship or its  machinery  or  equipment  or
        undermanning  or overloading or unsafe or improper  loading or any other
        matter relevant to the safety of the Ship) unless arrangements have been
        made which are appropriate to ensure that before the Ship goes to sea it
        is made fit to do so without  serious  danger to human life by reason of
        any such matters or it is  reasonable  for such  arrangements  not to be
        made at such time;

15.2.19 Compliance with oil pollution and environmental laws

        comply with,  and procure  compliance in all material  respects with all
        Environmental Laws applicable to all Relevant Ships and the terms of all
        Environmental  Approvals  including,  without  limitation,  requirements
        relating to manning and establishment of financial  responsibility  and,
        promptly  upon  receipt  of the same,  notify  the  Lessor of any claim,
        notice or other  communication  served on it in respect  of any  alleged
        breach   of  any   applicable   Environmental   Law  which   might,   if
        substantiated,  have a material  adverse effect on any Relevant  Party's
        ability  to  perform  its  respective  obligations  under  the  Relevant
        Documents and (without  prejudice to the  generality  of the  foregoing)
        procure  that  (a) no oil,  hazardous  substances  or solid  wastes  are
        disposed of, discharged or otherwise released from or in connection with
        the Ship except in compliance with Environmental  Laws, (b) no hazardous
        substance  will be released  in a quantity  equal to or  exceeding  that
        quantity   which   requires   reporting   pursuant  to  Section  103  of
        Comprehensive  Environmental  Response,  Compensation  and Liability Act
        1980, and (c) no oil or hazardous substance is discharged or released so
        as to pose an imminent and substantial  endangerment to public health or
        welfare  or the  environment  which will  result in damages  recoverable
        under the Oil Pollution Act 1990 of the United States of America;

15.2.20 ISM Code

        (a)     comply  with,  and ensure that the Ship and its  Operator at all
                times comply with the requirements of the ISM Code;

        (b)     immediately  inform  the  Lessor if there is any  threatened  or
                actual withdrawal of its or an Operator's DOC or the Ship's SMC;
                and

        (c)     promptly  inform the Lessor  upon the issue to the  Lessee,  the
                Sub-Lessee or any Operator of a DOC and to the Ship of an SMC or
                the receipt by the Lessee,  the  Sub-Lessee  or any  Operator of
                notification that its application for the same had been refused;
                and

15.2.21 Chartering

        without  prejudice to clause 12 not and will procure that the Sub-Lessee
        will not,  in either  case,  without  the prior  written  consent of the
        Lessor (a request  for which shall be  promptly  responded  to but which
        consent the Lessor shall have full liberty to withhold)  let the Ship on
        time or voyage charter except to:

        (a)     a member  of the  Lessee  Group on terms  whereby  the  relevant
                member  undertakes  that its rights and  interests in respect of
                the Ship are  subordinated  to the rights and  interests  of the
                Lessor; or

        (b)     a Rated Time Charterer; or

        (c)     any other person,

        as long as the chartering of the Ship to any of the persons specified in
        (a),  (b) and (c)  shall  not be  illegal  or  result in a breach by the
        Lessor and/or the Lessee and/or the  Sub-Lessee of any regulation in any
        Relevant   Jurisdiction   and,   where   applicable,   in  the  case  of
        sub-paragraphs  (a) and (c) above,  the  provisions  of clause 25.6 have
        been satisfied in full.

16      Insurance Undertakings: wreck removal

16.1    Insurance undertakings

        The  Lessee  hereby  covenants  with  the  Lessor  and  undertakes  that
        throughout the Lease Period and thereafter,  whilst the Lessee continues
        to have possession of the Ship, until the sale of the Ship (other than a
        sale to the Standby Purchaser), it will:

16.1.1  Insured risks, amounts and terms

        insure and keep the Ship  insured free of cost and expense to the Lessor
        and in the joint names of the Lessee, the Sub-Lessee and the Lessor (but
        without  liability  on the part of the Lessor for  premiums or calls) in
        connection  with the operation of the Ship (each as their  interests may
        appear):

        (a)     against fire and usual marine risks (including excess risks) and
                war risks, on an agreed value basis, in such amounts (but not in
                any event for an amount less than whichever shall be the greater
                of (i) the market  value of the Ship for the time being and (ii)
                such  amount  as shall  from  time to time be not less  than the
                aggregate,  from  time to time,  of (A) the  amount of the Strip
                Liability  Amount  and (B) the  aggregate  amount  of  insurance
                required  to be placed by the Lessee by  persons  other than the
                Lessor  and in whose  favour  the  Lessee  has  created  a prior
                ranking  Encumbrance  in respect of the  Insurances and which is
                determined independently of the market value of the Ship;

        (b)     against  protection  and indemnity  risks  (including  pollution
                risks) for the highest  amount  (but,  in the case of  pollution
                risks,   for  a   minimum   amount   of  one   billion   Dollars
                ($1,000,000,000)  (or such other  amount as is from time to time
                deemed to be the maximum  insurable amount of the  International
                Group of Protection and Indemnity  Associations))  in respect of
                which cover is in accordance  with  customary  insurance  market
                practice  taken out for vessels of the same type,  size, age and
                flag as the Ship) for the full  tonnage of the Ship (as approved
                in writing by the Lessor) and upon such terms as shall from time
                to time be approved in writing by the Lessor; and

        (c)     in  respect  of such  other  matters  of  whatsoever  nature and
                howsoever  arising  in  respect  of  which  insurance  would  be
                maintained by a prudent owner of the Ship,

        and that it will pay to the Lessor the cost (as  conclusively  certified
        by the Lessor) of any (aa) innocent  owner's  insurance which the Lessor
        may from time to time  effect in respect of the Ship upon such terms and
        in such amounts as shall from time to time be approved in writing by the
        Lessor and (bb) any other insurance cover which the Lessor may from time
        to time  require to be effected in respect of the Ship and/or in respect
        of its  interest or potential  liability  as owner and/or  lessor of the
        Ship as the Lessor shall deem desirable having regard to any limitations
        in respect of the amount or extent of cover  which may from time to time
        be applicable in any of the other insurances  referred to in this clause
        16.1.1 and also having regard to such insurance cover which from time to
        time it is customary for finance lessors such as the Lessor to effect in
        respect of similar  transactions to the transaction  constituted by this
        Lease and the other Relevant Documents.

        Notwithstanding  the above, if at any time the Lessor proposes to effect
        any  insurance  of the nature  referred  to at (aa) or (bb)  above,  the
        Lessor shall first notify the Lessee of the insurance  which it proposes
        to effect, the terms on which it requires it to be effected and the date
        from which it  requires  it to be so  effected.  If,  before the date on
        which the Lessor requires that insurance to be effected,  the Lessee can
        demonstrate  to the  Lessor  that a firm  of  insurance  brokers  with a
        reputation  acceptable  to the Lessor is able to arrange that  insurance
        upon those  terms,  before  that date,  for a price  lower than that for
        which any firm of insurance  brokers nominated by the Lessor is prepared
        to  arrange  that  insurance  and with  underwriters  acceptable  to the
        Lessor,  and if that firm of  insurance  brokers  will  enter  into such
        agreements with the Lessor as the Lessor may require taking into account
        the  identity of that firm of  insurance  brokers,  the Lessor shall not
        unreasonably  refuse  to  effect  that  insurance  through  that firm of
        insurance brokers so nominated by the Lessee;

16.1.2  Brokers insurers and general terms of insurance

        effect the  Insurances  aforesaid  in  Sterling or Dollars or such other
        currency as the Lessor may approve  and  through  the  Approved  Brokers
        (other than the said innocent owners and contingent  liability insurance
        which may be effected through brokers  nominated by the Lessor) and with
        such  insurance  companies  and/or  underwriters  or a mutual  insurance
        association or club as shall from time to time be approved in writing by
        the Lessor and upon such terms as shall from time to time be approved in
        writing by the Lessor, such approval not to be unreasonably withheld, it
        being agreed that, without  limitation,  it shall not be unreasonable to
        withhold such approval if withholding  such approval is consistent  with
        the insurance  report referred to in clause 16.1.12 or the advice of the
        brokers producing such report;

16.1.3  Specific terms

        each  policy or entry  with any  mutual  insurance  association  or club
        maintained  by the Lessee in  accordance  with the  provisions of clause
        16.1.1 shall:

        (a)     contain an endorsement  reflecting the interest of the Lessor in
                the Ship or  otherwise  covers  the  Lessor in respect of claims
                which may be forthcoming thereunder;

        (b)     be in the  joint  names  of  the  Lessor,  the  Lessee  and  the
                Sub-Lessee according to their respective interests;

        (c)     provide  that all moneys  payable  thereunder  shall,  after the
                giving of written  notice by the Lessor (which notice the Lessor
                agrees not to give unless a Termination Event has occurred which
                is  continuing)  (and subject to the  provisions of clauses 2.2,
                2.3 and 2.5 of the Proceeds Deed), be payable to or to the order
                of the Lessor;

        (d)     provide  that the Lessor will be given  either  thirty (30) days
                prior written notice of any intention of the Lessee or seven (7)
                days of any intention of the  insurance  company in each case to
                cancel the policy or to materially  alter its terms or not renew
                the policy on materially  the same terms;  or, in the absence of
                such terms,  the Lessee shall cause the Approved Brokers (or, if
                any premium payments in respect of Insurances are financed,  the
                relevant insurance premium finance company),  to give the notice
                required by this  clause and the Lessee  shall  provide  written
                evidence  as to the  Approved  Brokers  or,  as the case may be,
                insurance  premium finance  company's  agreement at all times to
                provide the notice required by this sub-clause;

        (e)     not have an excess or  deductible  under the policy or  policies
                referred to in clause 16.1.1(a)  exceeding two hundred and fifty
                thousand  Dollars  ($250,000)  as the same shall be escalated at
                the rate of RPI from the Delivery  Date,  per occurrence (or the
                equivalent in any other currency); and

        (f)     be in Dollars or Sterling and, if in Dollars, in a Dollar amount
                which at the  commencement  of any  policy  year  satisfies  the
                Sterling  element  of any  minimum  insurance  cover of the type
                referred to in clause  16.1.1(a)(ii)(A)  throughout  the term of
                the policy.

16.1.4  Fleet cover

        if any of the insurances  referred to in clause 16.1.1(a) form part of a
        fleet cover,  procure that the Approved  Brokers shall  undertake to the
        Lessor that they shall  neither set off against any claims in respect of
        the Ship any premiums due in respect of other vessels or equipment under
        such fleet cover or any  premiums due for other  insurances,  nor cancel
        the  insurance for reason of  non-payment  of premiums for other vessels
        under such fleet cover or of premiums for such other insurances, and, if
        the Approved  Brokers are not prepared to provide an  undertaking of the
        type referred to above,  shall  undertake to issue a separate  policy in
        respect of the Ship if and when so requested by the Lessor;

16.1.5  Payment of premiums

        punctually pay all premiums, calls,  contributions or other sums payable
        in respect of all such  insurances and to produce copies of all relevant
        receipts or other evidence of payment when so reasonably required by the
        Lessor;

16.1.6  Renewal

        at least fourteen (14) days before the relevant  policies,  contracts or
        entries expire,  notify the Lessor of the names of the brokers  proposed
        to be employed by the Lessee,  the Sub-Lessee or any other party for the
        purposes of the renewal of such  insurances  and of the amounts in which
        such  insurances  are proposed to be renewed and the risks to be covered
        and,  subject to compliance with  requirements of the Lessor pursuant to
        this clause 16.1, procure that appropriate  instructions for the renewal
        of such  insurances  on the terms so specified are given to the Approved
        Brokers at least ten (10) days (or such shorter period as the Lessor may
        from time to time agree)  before the  relevant  policies,  contracts  or
        entries expire.  In all  circumstances the Lessee shall procure that the
        Approved  Brokers  will at least  seven (7) days  before such expiry (or
        within  such  shorter  period as the Lessor may from time to time agree)
        confirm in writing  to the  Lessor as and when such  renewals  have been
        effected in accordance  with the  instructions so given and, where there
        is no change to the  identity  of the  brokers,  the level of  insurance
        cover or any  material  change  in the terms of the  relevant  policies,
        contracts or entries, confirmation that there has been no such change.

16.1.7  Guarantees

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

16.1.8  Hull policy  documents,  notices,  loss  payable  clauses  and  brokers'
        undertakings

        deposit with the Approved Brokers (or procure the deposit of) all slips,
        cover notes,  policies,  certificates  of entry or other  instruments of
        insurance  from  time to time  issued  in  connection  with  such of the
        insurances  referred  to in clause  16.1.1 as are  effected  through the
        Approved  Brokers and procure  that the  interest of the Lessor shall be
        endorsed  thereon by  incorporation  of the relevant Loss Payable clause
        and that the Lessor  shall be furnished  with pro forma  copies  thereof
        and, unless insurances are placed on the terms of the Norwegian Maritime
        Insurance  Plan of 1966 as amended,  a letter or letters of  undertaking
        from the  Approved  Brokers  in such form as shall  from time to time be
        reasonably  required  by the  Lessor  having  regard to  current  market
        practice at the time of issue of any such letter of undertaking;

16.1.9  Associations' loss payable clauses, undertakings and certificates

        procure that any protection and indemnity and/or war risks  associations
        in which  the Ship is for the  time  being  entered  shall  endorse  the
        relevant  Loss Payable  clause on the relevant  certificate  of entry or
        policy and shall furnish the Lessor with a copy of such  certificate  of
        entry or policy and a letter or letters of  undertaking  in such form as
        shall from time to time be  reasonably  required  by the  Lessor  having
        regard  to  current  market  practice  at the  time of issue of any such
        letter of undertaking;

16.1.10 Extent of cover and exclusions

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

16.1.11 Correspondence with brokers and associations

        to provide to the Lessor, at the time of each such communication, copies
        of all written  communications  between the Lessee or the Sub-Lessee and
        the Approved Brokers and approved war risks and protection and indemnity
        associations  which  relate to  requisite  declarations  and  payment of
        additional  premiums or calls referred to in clause 16.1.10,  notices of
        renewal of the Insurances  and all material  amendments to the terms and
        conditions relating to such Insurances;

16.1.12 Independent report

        the Lessor  shall be  entitled to request the Lessee (at the cost of the
        Lessee),  to furnish  the Lessor  with a  detailed  report  signed by an
        independent  firm of insurance  brokers  appointed by the Lessor dealing
        with the  insurances  maintained  on the Ship and stating the opinion of
        such firm as to the  adequacy  thereof.  The Lessor shall be entitled to
        request  the  furnishing  of a report  under this  clause at the time of
        Delivery  and  thereafter  if  the  insurance  advisors  of  the  Lessor
        recommend  that a report be obtained  following  the annual audit of the
        shipping insurance  portfolio of the Lessor Group or, if earlier, at the
        time of any material  change in the Insurances or in the identity of the
        Approved  Brokers  or the  protection  and  indemnity  and/or  war risks
        association  responsible for such Insurances or if the Lessor reasonably
        believes  that  there has been a  material  change in  insurance  market
        practice in respect of vessels of similar type to the Ship;

16.1.13 Collection of claims

        do  all  things  necessary  and  provide  all  documents,  evidence  and
        information  to enable the Lessor to collect or recover any moneys which
        shall at any time  become  due to the Lessor  pursuant  to this Lease in
        respect of the Insurances;

16.1.14 Compliance with Insurances

        comply with the terms and conditions of the Insurances,  not do, consent
        to or  permit  any act or  omission  which  might  invalidate  or render
        unenforceable  the whole or any part of the  Insurances and not (without
        first  obtaining  the  consent of the  insurers to such  employment  and
        complying with such requirements as to extra premium or otherwise as the
        insurers  may  prescribe)  employ  the  Ship or  permit  the  Ship to be
        employed  otherwise than in conformity  with the terms of the Insurances
        (including any warranties express or implied therein);

16.1.15 Application of recoveries

        apply all sums  receivable  under the  Insurances  which are paid to the
        Lessee,  in accordance  with the Loss Payable  Clauses and clause 22, or
        procure  the  application  of such sums to the  extent  received  by the
        Sub-Lessee,  in repairing all damage and/or in discharging the liability
        in respect of which such sums shall have been received;

16.1.16 Other insurances and assureds

        not,  without  the  prior  written  consent  of  the  Lessor,  take  out
        additional  insurances for the Lessee's or, during the Sub-Lease Period,
        the Sub-Lessee's sole benefit,  or permit the Lessee or the Lessor to be
        named  insured in  insurances  with  respect to the Ship,  other than as
        required under this Lease, where such additional  insurances will or may
        prejudice  the  Insurances  or  recovery  thereunder  or will exceed the
        amount permitted by the warranties or other conditions of the Insurances
        (unless the insurers  under the Insurances  have consented  thereto) and
        will,  upon the Lessor's  request,  immediately  furnish the Lessor with
        particulars of any such additional  insurances  (including copies of any
        cover  notes or  policies)  and of the written  consent of the  insurers
        under the Insurances in any case where such consent is necessary;

16.1.17 Oil Pollution Cover

        ensure  that  the  certificate  of  entry  for the  Ship  issued  by the
        protection and indemnity  association  with which the Ship is entered is
        endorsed  with the U.S.  Oil  Pollution  Clause  20/2/91  (as amended or
        replaced  from time to time) and procure  that written  confirmation  is
        given to the Lessor that the Lessee or, during the Sub-Lease Period, the
        Sub-Lessee,  the Manager has provided all declarations and satisfied all
        other  requirements  of such  association  and  that  the  U.S.  Trading
        Exclusion  Clause  has been  deleted  from the  terms  upon  which  such
        association  covers the Ship  against  protection  and  indemnity  risks
        (including oil pollution risks);

16.1.18 Submission of Protection and Indemnity Declarations

        promptly (and within any applicable time limits)  complete and submit to
        the  protection and indemnity  association  with which the Ship shall be
        entered:

        (a)     a declaration made by or on behalf of the Lessor, the Lessee or,
                during the Sub-Lease Period, the Sub-Lessee, the Manager and any
                other demise or bareboat charterer, manager or other operator of
                the Ship who is named as an assured or  co-assured in the Ship's
                entry  with such  association  that they  will  comply  with all
                special  terms and  conditions  of the  association  (including,
                without   limitation,   payment  of   additional   premiums  for
                additional  voyages)  applying  to any  voyage  (a "US  voyage")
                involving  loading or  discharging  cargo anywhere in the United
                States of America or within the USA Exclusive  Economic Zone (as
                defined in the Oil Pollution Act of 1990 of the United States of
                America); and

        (b)     such quarterly or other  declarations  as such  association  may
                require to be made (including, without limitation,  declarations
                listing  all  voyages  of the Ship) to  ensure  that the Ship is
                covered  for  protection  and  indemnity  risks  (including  oil
                pollution risks) on any US voyage,

        and procure that all such declarations shall be in a form acceptable to,
        and contain all  information  required  by,  such  association;  16.1.19
        Maintenance of Oil Pollution Insurance Cover

        comply  with all other  requirements  of the  protection  and  indemnity
        association  with which the Ship is  entered to ensure  that the Ship is
        fully covered for oil pollution risks;

16.1.20 Evidence of Oil Pollution Insurance Cover

        deliver  to the  Lessor  upon  reasonable  notice at the  expense of the
        Lessee  certified true copies of all  declarations to the protection and
        indemnity  association with which the Ship is entered,  all certificates
        issued by the United  States  Coast  Guard,  all  confirmations  by such
        association of cover for oil pollution risks and such other  information
        and documents relating to oil pollution risks or insurance as the Lessor
        may from time to time reasonably request;

16.1.21 Encumbrances

        not create or permit to exist any Encumbrance over the Insurances or any
        Requisition  Compensation,  or its interest therein save as contemplated
        by this Lease; and

16.1.22 Information concerning Insurances

        supply  to the  Lessor  all  necessary  information,  documentation  and
        assistance which may be required by the Lessor in connection with making
        any claim under the Insurances.

16.2    Further requirements

        Notwithstanding the other provisions of this clause 16, the Lessee shall
        and shall procure that the Sub-Lessee  shall also,  during the Sub-Lease
        Period,  comply with such further requirements  relative to insurance as
        the Lessor  may,  based upon the  insurance  report or the advice of the
        Lessor's  insurance  brokers referred to in clause 16.1.12 and following
        discussions with the Lessee, from time to time reasonably stipulate.

16.3    Wreck removal

        In the event of the Ship  becoming  an  obstruction  to  navigation  the
        Lessee  shall (in  addition  to any other  obligation  it may have under
        clause 9)  indemnify  and hold  harmless  the Lessor  against all costs,
        expenses,  payments, charges, losses, demands, any liabilities,  claims,
        actions,  proceedings  (whether  civil or  criminal)  penalties,  fines,
        damages, judgments, orders or other sanctions which may be incurred, by,
        or made or  asserted  against  the Lessor by reason  that the Ship shall
        have become an obstruction to navigation (including, without limitation)
        in  respect of the  removal  or  destruction  of the  obstruction  under
        statutory powers but only to the extent that such has not been recovered
        from the Ship's insurers.

17      Powers of Lessor to remedy defaults

17.1    Failure to perform insurance undertakings

        If the Lessee fails to comply with any of the provisions of clause 16.1,
        the  Lessor  may,  without  being  in  any  way  obliged  so to  do,  or
        responsible  for so doing,  and without  prejudice to the ability of the
        Lessor to treat that  non-compliance as a Termination Event,  effect and
        thereafter  maintain  all  such  insurances  upon  the  Ship  as in  its
        discretion it may think fit in order to procure the compliance with such
        provisions or alternatively,  require the Ship (at the Lessee's risk) to
        remain in, or to proceed  to and  remain  in, a port  designated  by the
        Lessor until such provisions are fully complied with.

17.2    Failure to perform maintenance undertakings

        If the  Lessee  fails to comply  with any of the  provisions  of clauses
        15.2.1,  15.2.3.  15.2.4 or 15.2.5, the Lessor may, without being in any
        way obliged so to do, or responsible for so doing, and without prejudice
        to  the  ability  of  the  Lessor  to  treat  that  non-compliance  as a
        Termination Event, arrange for the carrying out of such repairs, changes
        or surveys as it may deem expedient or necessary in order to procure the
        compliance with such provisions.

17.3    Failure to prevent or release from arrest

        If the Lessee fails to comply with the  provisions  of clause 11.2.4 the
        Lessor may,  without  being in any way obliged so to do, or  responsible
        for so doing,  and  without  prejudice  to the  ability of the Lessor to
        treat that  non-compliance as a Termination Event, pay and discharge all
        such debts, damages,  liabilities and outgoings as are therein mentioned
        and/or take any such measures as it may deem  expedient or necessary for
        the purpose of securing  the release of the Ship in order to procure the
        compliance with such provisions.

17.4    Failure to comply with other obligations

        If the Lessee  fails to comply with any of its other  obligations  under
        this Lease any of the other Lease  Documents,  the Lessor  may,  without
        being in any way  obliged  to do so or  responsible  for so  doing,  and
        without   prejudice   to  the  ability  of  the  Lessor  to  treat  that
        non-compliance  as a Termination  Event, take such action as it may deem
        expedient  or  necessary  in order to procure the  compliance  with such
        provisions.

17.5    Costs of remedying defaults

        Without  prejudice  to clause  27.1,  all  losses,  liabilities,  costs,
        charges,   expenses,   damages  and  outgoings  of   whatsoever   nature
        (including,  without limitation,  Taxes, repair costs, registration fees
        and  insurance  premiums)  suffered,  incurred  or paid by the Lessor in
        connection  with the  exercise by the Lessor of any of its powers  under
        clauses  17.1,  17.2,  17.3 and 17.4 and  interest  on all such  losses,
        liabilities,  costs, charges,  expenses,  damages and outgoings from the
        date on which the same were  suffered,  incurred  or paid by the  Lessor
        until the date of receipt or recovery thereof (both before and after any
        relevant  judgment) at the Default Rate shall be repayable by the Lessee
        to the  Lessor on demand  and the  Lessor  agrees  that it will  issue a
        demand hereunder  within a reasonable  period of determining that it has
        suffered or incurred any such amounts.

17.6    Rental still payable

        Notwithstanding  any  exercise  by the  Lessor  of  any  of  the  powers
        contained in this clause 17, Rental shall continue to accrue during such
        time.

18      Redelivery

18.1    Redelivery procedure and condition

        Except  in the  event of a Total  Loss of the Ship  and  subject  to the
        provisions  of clause  24.6,  the  Lessee  shall at the end of the Lease
        Period in relation to the Ship  redeliver the Ship to the Lessor free of
        all Encumbrances (other than Permitted  Encumbrances,  but excluding for
        this  purpose  Permitted  Liens),  and  the  Lessor  shall  accept  such
        redelivery,   and  save  where  different  arrangements  are  agreed  in
        connection  with any sale of the Ship  pursuant to clause 3.6, at a safe
        port to be  mutually  agreed  between  the parties or, in the absence of
        such  agreement,  at such nearby  safe port as the Lessor may  designate
        acting  reasonably  and having regard to the location of the Ship at the
        time of any required  redelivery.  Subject to the  provisions  of clause
        24.5,  the Lessee shall at its expense before such  redelivery  make all
        such  repairs and do all such work as may be  necessary so that the Ship
        at the date of redelivery  shall have  installed the machinery and other
        equipment installed on the Ship at Delivery or replacements for the same
        made in accordance with the provisions of this Lease, shall maintain the
        Classification  unexpired,  shall  otherwise be in  compliance  with any
        applicable rules of the  Classification  Society and shall be in as good
        structure,  state and  condition as at Delivery,  fair wear and tear and
        changes and  alterations  properly made by the Lessee as permitted under
        this Lease excepted and shall be with all required trading and operating
        (and if trading,  appropriate trading related) certificates belonging to
        the Ship in full force and effect for a minimum period of six (6) months
        from the date of redelivery.

18.2    Redelivery survey

        At or about the time of redelivery thereof a survey shall, if the Lessor
        so requires,  be made to determine  the state and condition of the Ship,
        her machinery and  equipment.  In that event,  the Lessee and the Lessor
        shall  each  appoint  surveyors  to be  present  at such  survey and the
        surveyors  present  shall  determine  the  condition  of the  Ship,  her
        machinery and equipment and shall state the repairs or work necessary to
        place  the  Ship  at the  date of  redelivery  in the  structure  state,
        condition  and  classification  referred to in clause 18.1.  If the said
        surveyors  disagree they shall refer the matter to a senior  surveyor of
        the relevant  Classification  Society whose  decision shall be final and
        binding on the parties hereto.  All reasonable  costs  occasioned by any
        such survey  including the costs of the said surveyors  appointed by the
        Lessee  and the  Lessor  and,  if  appointed,  the  costs of the  senior
        surveyor of the  Classification  Society  shall be payable by the Lessee
        but if the Ship is found to be in the condition  provided for in clauses
        18.1, fair wear and tear alone and changes and alterations properly made
        by the Lessee as permitted under this Lease excepted, such cost shall be
        payable by the Lessor.

18.3    Storage until sale

        From the end of the Lease  Period  until the Ship  shall have been sold,
        the Lessee shall, at no cost to the Lessor:

18.3.1  continue to perform all its obligations  under this Lease other than its
        obligations to pay periodic Rental and, in particular, it shall continue
        (a) to perform its undertakings under clauses 11 to 14 (both inclusive),
        (b) to procure that the Ship is maintained in accordance  with clause 15
        (save  that  the  Lessee  shall  not be  required  to  procure  that any
        maintenance  and  repairs are  carried  out other than as  necessary  to
        ensure that, until the sale of the Ship, the Ship complies and continues
        to comply in all material  respects with the  provisions of clause 18.1)
        and (c) to procure  that the Ship is insured in  accordance  with clause
        16.1 or clause 16.2; and

18.3.2  unless the Lessor otherwise directs, store or procure the storing of the
        Ship at a place and under conditions  reasonably  approved by the Lessor
        and the  Relevant  Security  Agent until the sale of the Ship shall have
        been completed.

19      Consumable stores

19.1    Upon Delivery

        It is  acknowledged  that  all  consumable  stores,  unused  diesel  and
        lubricating  oils,  bunkers,  duty free stocks and other  merchandise on
        board the Ship at Delivery belong to the Sub-Lessee.

19.2    Upon redelivery

        All consumable stores, unused diesel and lubricating oils and bunkers on
        board the Ship  which are owned by the Lessee or the  Sub-Lessee  at the
        time of re-delivery  shall be sold by the Lessee or, as the case may be,
        the Sub-Lessee to the purchaser of the Ship.

20      Use of equipment and replacement

20.1    Use of equipment and Manuals and Technical Records

        The Lessee shall have the use of all outfit, equipment (including cabin,
        crew and galley equipment),  furnishings,  furniture and fittings, spare
        and replacement  parts which are the property of the Lessor on board the
        Ship at the time of Delivery and the Manuals and  Technical  Records and
        the same or their substantial equivalent shall be returned to the Lessor
        on re-delivery in good order and condition, fair wear and tear alone and
        changes and  alterations  properly made by the Lessee as permitted under
        this Lease excepted.

20.2    Renewal of equipment

        The Lessee  shall at its own expense  from time to time during the Lease
        Period  replace,  renew  or  obtain  substitutions  for  such  items  of
        equipment as shall be so damaged or worn as to be unfit for use provided
        always that in any such case the Lessee shall  procure that title to the
        part replaced,  renewed or substituted shall promptly vest in the Lessor
        and title to any part replaced, renewed or substituted shall remain with
        the Lessor  until the part which  replaced it or the new or  substituted
        part  becomes  the  property  of the Lessor or is  replaced,  renewed or
        substituted by a part which thereupon becomes the property of the Lessor
        and the Lessee agrees that if any replaced,  renewed or substituted part
        is not the property of the Lessor it will as soon as practicable replace
        the same with a part which thereupon becomes the property of the Lessor.

20.3    Alteration of equipment; additional equipment

        The Lessee may at any time alter or remove all or any items of equipment
        or may  fit  any  additional  equipment  required  to  render  the  Ship
        available for any purpose for which the Lessee may require to use her in
        accordance  with the  provisions  of clause 13 provided  that the Lessee
        shall  first  have  obtained  the prior  written  consent  of the Lessor
        thereto if and to the extent such  consent  may be required  pursuant to
        clause 15.2.10.  Any additional  equipment so fitted by the Lessee shall
        be considered the property of the Lessee or relevant  sub-lessee who may
        remove such  additional  equipment at any time before the  expiration of
        the Lease Period. The cost of fitting or removing any equipment together
        with the cost of  making  good any  damage  caused  by such  fitting  or
        removal shall be payable in full by the Lessee who shall  re-deliver the
        Ship's  equipment to the Lessor in  accordance  with the  provisions  of
        clause 20.1  unless it is agreed  between the Lessor and the Lessee that
        any extra  fittings or equipment  which have been supplied by the Lessee
        during the Lease Period shall  remain on the Ship after  redelivery,  in
        which event such fittings or equipment shall as from  redelivery  become
        the property of the Lessor.

21      Encumbrances: Lessor's undertakings

        The  Lessor  warrants  that the Ship and the  Lessor's  interest  in the
        Insurances or any Requisition  Compensation will at the Delivery Date be
        free of any Lessor's  Encumbrances  created by it and undertakes that it
        will not during the Lease Period,  without the prior written  consent of
        the Lessee, create or, by its own acts or omissions, permit to arise any
        Lessor's  Encumbrance over the Ship, or any share or interest therein or
        the Lessor's interest in the Insurances or any Requisition Compensation.

        If,  notwithstanding the Lessor's  undertaking set out above, a Lessor's
        Encumbrance shall arise, the Lessor hereby agrees to discharge  promptly
        such Lessor's Encumbrance. If the Lessor does not promptly discharge the
        Lessor's Encumbrance the Lessee shall be entitled to act as the agent of
        the Lessor for the purpose of procuring such discharge (and for no other
        purpose)  and the Lessor  shall  reimburse  the Lessee in respect of any
        costs reasonably and properly incurred by the Lessee, in its capacity as
        agent, in connection with such discharge.

22      Loss and damage

22.1    Risk

        The Ship shall  throughout  the Lease Period be in every  respect at the
        risk of the Lessee who shall bear all risks howsoever arising whether of
        navigation,  operation  and  maintenance  of the Ship or otherwise  and,
        subject to clause 6.1, of any other  occurrence  of whatever  kind which
        shall deprive the Lessee of the use, possession or enjoyment thereof.

22.2    Total Loss

22.2.1  If the Ship shall  become a Total  Loss  during  the Lease  Period,  all
        insurance  proceeds in respect  thereof  shall be applied in  accordance
        with clause  22.5 and the Lessee  shall on the Total Loss  Payment  Date
        become  liable to pay to the Lessor an amount  equal to the  Termination
        Sum for the Ship as at that date together with all amounts of Rental and
        any other  amounts  then due and payable  under this Lease or any of the
        other  Lease  Documents.  If the  Lessor  serves a notice on the  Lessee
        pursuant to clause 27.1 the provisions of clause 27.1 shall prevail over
        this  clause  and the  Lessee  shall be  obliged  to make  the  payments
        required  to be made under  clause 27.1 in  accordance  with such clause
        notwithstanding  that the date for payment of such  amounts may be prior
        to the Total Loss Payment Date.

22.2.2  For the  purposes  of this  Lease,  a Total Loss shall be deemed to have
        occurred:

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

        (b)     in the case of a constructive  total loss of the Ship,  upon the
                date and at the time notice of  abandonment of the Ship is given
                to the insurers of the Ship for the time being (provided a claim
                for such  constructive  total loss is admitted by the  insurers)
                or, if the  insurers do not admit such a claim,  at the date and
                at the time at either a total loss is  subsequently  admitted by
                the  insurers  or a total  loss is  subsequently  adjudged  by a
                competent court of law or arbitration panel to have occurred or,
                if earlier,  the date  falling one hundred and eighty (180) days
                after  notice  of  abandonment  of the  Ship  was  given  to the
                insurers;

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

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

        (e)     in the case of  hijacking,  theft,  condemnation,  confiscation,
                capture,  detention,  seizure of the Ship  (other than where the
                same  amounts  to  Compulsory  Acquisition  of the  Ship) by any
                persons  which  deprives  the  Lessee of the use of the Ship for
                more than  thirty  (30)  days,  upon the expiry of the period of
                sixty  (60)  days  after  the  date  upon  which  the   relevant
                hijacking, theft, condemnation, confiscation, capture, detention
                or seizure occurred; and

        (f)     in the case of any of the events described in sub-paragraph  (d)
                of the  definition of Total Loss,  upon the expiry of the period
                of one  hundred  and  eighty  (180)  days  referred  to in  such
                sub-paragraph (d).

22.2.3  The Lessee agrees that it will, in the event that,  upon a Total Loss of
        the Ship, the Lessor is disabled from recovering under the Insurances or
        any of them or the amount of the recovery  thereunder is diminished  and
        such disablement or diminution  results from any breach by the Lessee of
        any of its  obligations  under  this Lease or in respect of the terms of
        the  relevant  Insurances,  pay  to  the  Lessor  on  demand  by  way of
        compensation  for the loss of the Ship a  capital  sum  (which  shall be
        applied  in  accordance  with  clause  22.5 as if the  same  had  been a
        recovery  under the  Insurances  in respect of such Total Loss) equal to
        the amount which would but for such  disablement  have been  recoverable
        under the  Insurances  or (as the case may be) a sum equal to the amount
        by which the insurance  recovery has been  diminished or, in either case
        and if greater,  an amount  equal to the Tax  Written  Date Value of the
        Ship.

22.3    Continuation of Lease Period

        The Lessee  shall  continue to pay Rental on the days and in the amounts
        required under this Lease  notwithstanding  that the Ship shall become a
        Total  Loss,  or if for any  reason  the  Lessee  shall  be  permanently
        deprived  of her use  prior  to the end of the  Lease  Period,  provided
        always  that no  further  instalments  of Rental  shall  become  due and
        payable  after the date on which all sums due under clause  22.2.1 shall
        have been paid in full and the Lease Period shall  terminate on the date
        of such final payment.

22.4    Application of Requisition Compensation

        In the event of the Compulsory  Acquisition of the Ship after  Delivery,
        all Requisition  Compensation received by the Lessor shall be applied by
        the Lessor (or, if received by the Lessee, shall be held in trust by the
        Lessee for application) in accordance with clause 22.5.

22.5    Application of Net Total Loss Proceeds and Requisition Compensation

        All Net Total Loss Proceeds and Requisition Compensation received by the
        Lessor shall be applied by the Lessor, subject to clause 10.4 and to the
        provisions of clause 2.1 of the Proceeds Deed, as follows:

22.5.1  first, in retention by the Lessor of an amount equal to one tenth of one
        per cent (0.1%) of the amount of the Net Total Loss Proceeds;

22.5.2  secondly,  in or towards  settlement  of any other  amounts owing by the
        Lessee  to the  Lessor  under  this  Lease  or any  of the  other  Lease
        Documents (including any interest due in respect thereof);

22.5.3  thirdly,  by way of rebate of Rental,  in or towards  settlement  of any
        amounts owing to the Other Lessors under the Other Ship Leases or any of
        the Other Ship Relevant Documents, such amounts to be paid to the Lessor
        Agent for  application  in accordance  with clause 4.3 of the Agency and
        Trust  Deed and  clauses  27.2.2  and  27.2.3 of each of the Other  Ship
        Leases;

22.5.4  fourthly,  if the Lessee shall on or before the date of  application  of
        such  moneys have paid the  Termination  Sum in  accordance  with clause
        22.2.1 or a part  thereof  in or towards  refunding  by way of rebate of
        Rental  to the  Lessee an amount  equal to the  Termination  Sum or part
        thereof so paid by the Lessee under this Lease; and

22.5.5  fifthly,  the  balance  to the  Lessee  by way of  rebate  of  Rental or
        otherwise as appropriate.

22.6    Damage claims

        In the event of repairable damage to the Ship, the Lessor shall, subject
        to clause 2.2.1 of the Proceeds Deed, pay any insurance  moneys received
        by it to the Lessee or, during the Sub-Lease Period, the Sub-Lessee upon
        the Lessee or, during the Sub-Lease  Period,  the Sub-Lessee  furnishing
        evidence  satisfactory  to the Lessor that such damage has been properly
        made good or repaired and that all repair accounts and other liabilities
        whatsoever  in  connection  with the  damage  have been paid in full and
        discharged  by  the  Lessee  or,  during  the  Sub-Lease   Period,   the
        Sub-Lessee, provided always that if a Relevant Event has occurred and is
        continuing,  the Lessor shall be entitled to apply such insurance moneys
        in or towards  settlement  of any amounts due and owing by the Lessee to
        the Lessor under this Lease or any of the other Lease Documents.  If the
        insurers with whom the fire and marine risks insurances are effected are
        prepared  to make  payment  on account of repairs in the course of being
        effected  then such  payment  may only be  requested  by the  Lessee or,
        during the Sub-Lease  Period,  the  Sub-Lessee if no Relevant  Event has
        occurred and is  continuing  and if, in the case of a claim in excess of
        the Casualty  Amount,  the Lessor has first  consented in writing  (such
        consent not to be unreasonably withheld or unreasonably delayed).

22.7    Third party claims

        Any insurance moneys paid under the insurances taken out or entries made
        referred to in clause  16.1.1(b)  shall,  subject to clause 2.2.2 of the
        Proceeds  Deed,  be paid to the person to whom the liability (or alleged
        liability)  covered by such  insurances or entry was incurred or, if the
        liability  (or alleged  liability)  to such person has  previously  been
        discharged by the Lessee or, during the Sub-Lease Period, the Sub-Lessee
        such moneys shall be paid to the Lessee or, during the Sub-Lease Period,
        the  Sub-Lessee  in  reimbursement  of the moneys so  expended  by it in
        satisfaction  of such liability or alleged  liability and, in such case,
        the Lessor shall pay any insurance  moneys  received by it in respect of
        such  liability  or  alleged  liability  to the  Lessee  or,  during the
        Sub-Lease  Period,  the  Sub-Lessee  upon  the  Lessee  or,  during  the
        Sub-Lease Period, the Sub-Lessee  furnishing evidence to the Lessor that
        such  liability or alleged  liability has  previously  been  discharged,
        provided  always that if a Relevant Event has occurred and is continuing
        the  Lessor  shall  be  entitled  to apply  such  moneys  in or  towards
        settlement  of any  amounts  due and owing by the  Lessee to the  Lessor
        under this Lease or any of the other Lease Documents.

22.8    Insufficient insurance recovery

        In the event of repairable  damage to the Ship or a liability or alleged
        liability  covered by the insurances  taken out or entries made referred
        to in clause  16.1.1  being  incurred or alleged,  and if the  insurance
        moneys  paid in  respect  thereof  are  insufficient  to pay the cost or
        estimated  cost of making good or repairing  such damage or  discharging
        the liability or alleged  liability,  the Lessee will pay the deficiency
        or, during the Sub-Lease  Period,  will procure that the Sub-Lessee will
        pay the deficiency.

22.9    Payment of claims

        Notwithstanding  anything to the  contrary  herein,  any moneys  payable
        under the  Insurances  shall be payable in accordance  with the terms of
        the relevant Loss Payable clause and, where relevant, the Proceeds Deed.

22.10   Sale of Ship following Total Loss

        If the  insurers  of the Ship have  satisfied  or admitted in full their
        obligations  under the Insurances  and have expressly  waived any rights
        they may have, or would or might acquire,  in the Ship the Lessor shall,
        as soon as practicable after the Total Loss date,  endeavour to sell the
        Ship. Any such sale shall comply with clauses 3.4 and 3.6.

22.11   Notice of abandonment

        Provided no Relevant  Event shall have  occurred and be  continuing  the
        Lessee shall have the sole right to determine  whether or not a case has
        arisen for the giving of notice of  abandonment  to abandon  the Ship to
        the insurers  and/or claim a  constructive  total loss and the Lessee is
        hereby  irrevocably  authorised  by the Lessor to give the same if it so
        determines.

        The Lessor  shall,  upon the  written  request of the  Lessee,  promptly
        execute such  documents as may be required to enable the Lessee  and/or,
        during the Sub-Lease  Period,  the Sub-Lessee to abandon the Ship to the
        insurers  and/or  claim a  constructive  total loss and the Lessor shall
        give the Lessee and/or,  during the Sub-Lease Period, the Sub-Lessee all
        appropriate assistance in pursuing the said claim.

23      Salvage

        All salvage and towage and all proceeds from derelicts shall, subject to
        the  Lessor's  prior right to retain  thereout any sums which may be due
        from the Lessee to the Lessor under this Lease or any of the other Lease
        Documents,  be for the Lessee's benefit and the cost of repairing damage
        occasioned thereby shall be borne by the Lessee.

24      Requisition for hire

24.1    Effect of requisition for hire

        If the Ship is requisitioned  for hire by any Government Entity or other
        competent  authority during the Lease Period then,  unless and until the
        Ship  becomes a Total Loss  following  such  requisition  and the Lessee
        shall have made payment of all sums due pursuant to clause 22.2.1,  this
        Lease  shall  continue in full force and effect  (subject  always to the
        provisions of clauses 26 and 31.3) for the remainder of the Lease Period
        and the Lessee  shall remain fully  responsible  for the due  compliance
        with all its obligations  under this Lease and the other Lease Documents
        other than such  obligations  which the Lessee is unable to comply  with
        solely by virtue of such requisition.

24.2    Payment of requisition hire

        If the Lessee  shall duly comply with its  obligations  under this Lease
        and the other Lease  Documents  during the Lease Period the Lessee shall
        be entitled to all requisition  hire paid to the Lessor or to the Lessee
        by such  Government  Entity or other  competent  authority on account of
        such requisition.

24.3    Lessor to account for requisition hire

        The Lessor shall,  subject to clause 33.7, pay any  requisition  hire to
        the Lessee promptly upon receipt.

24.4    Reinstatement of Ship

        The  Lessee  shall,  as  soon  as  practicable  after  the  end  of  any
        requisition  for  hire,  cause  the Ship to be put  into  the  condition
        required by this Lease, and where that  requisition  shall end after the
        expiry or termination of the Lease Period,  the Lessee shall, as soon as
        practicable,  cause  the Ship to be put into  the  redelivery  condition
        required  by clause 18,  allowance  being made for fair wear and tear in
        respect  of the  period  from the  expiry  or  termination  of the Lease
        Period.

24.5    Compensation for reinstatement

        The Lessor shall be entitled to all  compensation  payable in respect of
        any change in the  structure,  state or  condition  of the Ship  arising
        during the period of  requisition  for hire. The Lessor shall apply such
        compensation  in  reimbursing  the Lessee for its cost of complying with
        its  obligations  under clause 24.4,  provided always that if a Relevant
        Event has  occurred and is  continuing,  the Lessor shall be entitled to
        apply such compensation in or towards settlement of any amounts owing by
        the Lessee under this Lease or any of the other Lease  Documents and the
        balance, if any, shall be paid to the Lessee.

24.6    Continuing requisition for hire

        Should  the Ship be under  requisition  for hire at the end of the Lease
        Period:

24.6.1  the leasing of the Ship under this Lease shall (unless  otherwise agreed
        between the parties  hereto)  nevertheless be terminated at such end but
        without  prejudice  to the  accrued  rights  of the  parties  including,
        without prejudice to the generality of the foregoing,  the obligation of
        the Lessee contained in clause 24.4, and the Lessor shall be entitled to
        receive and retain any requisition hire payable in respect of the period
        from the expiry or termination of the Lease Period;

24.6.2  the Lessee shall, if and for so long as it is prevented by reason of the
        requisition  for hire from  re-delivering  the Ship under  clause 18, be
        relieved  from its  obligations  so to do,  but shall  consult  with the
        Lessor as to the most convenient method of enabling the Lessor to obtain
        redelivery of the Ship when the Ship is released from such  requisition;
        and

24.6.3  after such release the Lessee shall be given a reasonable opportunity of
        removing any such additional  equipment as is referred to in clause 20.3
        on the terms referred to in such clause.

        Provided  that  nothing in this clause  24.6  shall,  where the Lease is
        terminated  following  the issue of a  Termination  Notice,  operate  to
        modify the dates on which the Lessee is  required  to make any  payments
        (whether of any Termination Sum or otherwise) under this Lease.

24.7    Insurance claims during requisition

        If the Ship shall be  requisitioned  for hire,  insurance  recoveries in
        respect of all claims  whatsoever  (otherwise than in respect of a Total
        Loss) arising during the period of  requisition  shall (to the extent to
        which such recoveries have not been expended by the Lessee in repairs to
        the Ship and to the extent the Ship is still  requisitioned  for hire at
        the end of the Lease Period) be paid to the Lessor and in respect of any
        amount so paid the  Lessee  shall to that  extent be  relieved  from its
        repair  obligations  under the last  sentence  of clause  18.1 and under
        clause 20.3.

25      Security Provisions

25.1    LC Bank credit review

25.1.1  If at any time  during the  Primary  Period the Credit  Rating of the LC
        Bank is  less  than  the  Minimum  LC Bank  Credit  Rating  (other  than
        following the occurrence of a Relevant Bank Event in relation to such LC
        Bank),  the  Lessor  shall be  entitled  to notify the Lessee in writing
        advising the Lessee that either:

        (a)     notwithstanding  the  failure  of the LC  Bank  to  satisfy  the
                Minimum  LC Bank  Credit  Rating,  the  Lessor is  willing,  but
                without  prejudice  to its rights to  exercise  its  entitlement
                under this  clause  upon a further  deterioration  in the Credit
                Rating or under clause 25.1, to allow the LC Bank to continue as
                the "LC Bank" for the  purpose  of this  Lease and the Letter of
                Credit; or

        (b)     the Lessee is required  to replace  the  existing LC Bank with a
                Qualifying Replacement Bank acceptable to the Lessor and procure
                that  such  bank  executes  a new  letter  of credit on the same
                terms, mutatis mutandis, as the existing Letter of Credit.

                Upon receipt of the notice from the Lessor pursuant to this
                clause advising the Lessee that clause 25.1.1(b) is applicable
                the Lessee shall procure that within thirty (30) days of receipt
                of such notice the Lessee shall have complied with the
                obligations imposed on the Lessee by clause 25.1.1(b).

        If the Lessor  determines  that the Lessee has failed to comply with the
        obligations  imposed  on the Lessee by such  sub-clause  within the said
        thirty (30) day period, the Lessee shall become  immediately  obliged on
        such date to give an irrevocable  notice to the Lessor  terminating  the
        Lease Period in accordance with the provisions of clause 3.3 (other than
        with  respect to the period by such  notice) and the Lease  Period shall
        terminate  upon the giving of such  notice.  Save as set out above,  the
        provisions  of clauses 3.3, 3.4 and 3.5 shall apply to such  termination
        of the Lease Period.

25.1.2  If at any time  during the  Primary  Period a Relevant  Bank Event shall
        occur in respect of a Relevant Bank,  the Lessee shall,  if so requested
        by the Lessor by notice in writing and at the  Lessor's  cost (and at no
        cost  to the  Lessee),  consult  with  the  Lessor  in  relation  to the
        replacement of that Relevant Bank and generally  assist the Lessor,  and
        take such steps as the Lessee may  lawfully  and  reasonably  be able to
        take at such  time,  to replace  that  Relevant  Bank with a  Qualifying
        Replacement  Bank acceptable to the Lessor and to provide  assistance in
        respect  of the issue of a new  letter of credit by the  replacement  LC
        bank or,  as the case may be,  the  issue of a new  additional  security
        document on the same terms, mutatis mutandis,  as the existing Letter of
        Credit or, as the case may be, the Additional  Security  Document issued
        by such Relevant Bank.

25.2    Additional Security re: Strip Liability

25.2.1  Where a new Additional  Security Table is required to be prepared by the
        Lessor after the Delivery  Date in  accordance  with  paragraph 9 of the
        Financial  Schedule and the Required  Security  Amount shown in that new
        Additional  Security Table is a negative  figure and in consequence  the
        Total  Security  Amount for and during such Security  Period as shown in
        the new  Additional  Security Table is greater than the aggregate of the
        Letter of Credit Amount, any Additional  Security Amount and the Maximum
        Unsecured Strip Liability Amount for and during any such Security Period
        (including,  without  limitation,  by  virtue  of the fact  that VAT has
        become payable on the amount of any  Termination  Sum payable under this
        Lease), the Lessee shall,  within thirty (30) days of receipt of written
        notice from the Lessor  (which  notice shall attach new such  Additional
        Security Table) either:

        (a)     procure  that,  subject to the approval of the Lessor,  the face
                amount of the Letter of Credit is  increased  by an amount equal
                to the Required  Security  Amount so that, with effect from said
                increase, the Total Security Amount for and during each Security
                Period shown in such new  Additional  Security Table is equal to
                or less than and will  continue  to be equal to or less than the
                aggregate of the Letter of Credit Amount (as so increased),  the
                Maximum  Unsecured  Strip  Liability  Amount and any  Additional
                Security  Amount in each case for and during each such  Security
                Period and thereafter; or

        (b)     constitute  to the  satisfaction  of the Lessor such  additional
                security as shall be acceptable to the Lessor and having a value
                for security  purposes (as determined by the Lessor) at the date
                upon which such additional  security shall be constituted  which
                is equal to the amount of the Required  Security Amount so that,
                when  aggregated with the amount of the Letter of Credit Amount,
                the Maximum  Unsecured Strip Liability Amount and any Additional
                Security Amount for and during any such Security Period shown in
                such new Additional  Security Table,  shall be at such time, and
                will continue to be thereafter, not less than the Total Security
                Amount for and during each such Security  Period and thereafter;
                or

        (c)     prepay the amount of Primary  Rental  notified  by the Lessor to
                the  Lessee,  following  receipt  by the  Lessor of the  written
                notice from the Lessee  referred to below,  in  accordance  with
                paragraph 8 of the  Financial  Schedule and being in such amount
                as will  result,  taking  into  account  such  prepayment,  in a
                reduction in the Total Security  Amount for each Security Period
                shown in such new Applicable  Security Table such that the Total
                Security  Amount for and during each  Security  Period  shown in
                such new  Applicable  Security  Table is equal or less  than and
                will  continue to be equal to or less than the  aggregate of the
                Letter of Credit Amount,  the Maximum  Unsecured Strip Liability
                Amount and any Additional  Security  Amount in each case for and
                during each such Security Period and thereafter.

        If the  Lessee  wishes to  exercise  the  option  referred  to in clause
        25.2.1(c) it shall notify the Lessor  within five (5) days of receipt of
        the notice  from the Lessor  pursuant  to this clause so that the Lessor
        can provide the Lessee  with a  Prepayment  Cash Flow (as defined in the
        Financial  Schedule)  for the purpose of  paragraph  8 of the  Financial
        Schedule;

        The Lessor agrees that for the purpose of clause 25.2.1(b) the provision
        by the Lessee of a letter of credit or bank  guarantee from a Qualifying
        Replacement Bank on terms acceptable to the Lessor in an amount equal to
        the amount of the additional security required to be provided under this
        clause shall be acceptable  additional  security for the purpose of this
        clause.

        If the  action  required  to be taken by the Lessee  under  this  clause
        25.2.1 is not taken  within the time period and  otherwise  on the terms
        contained in this clause the Lessor shall have the option to require the
        Lessee to terminate  the leasing of the Ship under this Lease and if the
        Lessor  wishes to  exercise  this  option it shall  notify the Lessee in
        writing whereupon the Lessee shall become immediately obliged to give an
        irrevocable  notice  to the  Lessor  terminating  the  Lease  Period  in
        accordance with the provisions of clause 3.3 (other than with respect to
        the period of such notice) and the Lease Period shall terminate upon the
        giving of such notice.  Save as set out above, the provisions of clauses
        3.3, 3.4 and 3.5 shall apply to such termination of the Lease Period.

25.2.2  Where either an increase in the amount of the Letter of Credit has taken
        place or any  additional  security  of the type  referred  to in  clause
        25.2.1 has been provided by the Lessee,  in each case in accordance with
        clause  25.2.1 and has not been released in full by the Lessor and a new
        Additional  Security  Table is  required to be prepared by the Lessor in
        accordance  with paragraph 9 of the Financial  Schedule and the Required
        Security  Amount  shown  in that  new  Additional  Security  Table  is a
        positive  figure and in consequence  the Total  Security  Amount for and
        during such Security Period shown in such new Additional  Security Table
        is less than the aggregate of the Letter of Credit  Amount,  the Maximum
        Unsecured Strip Liability Amount and any Additional  Security Amount for
        and during such Security Period (taking into account any VAT that may be
        payable in respect of the  Termination  Sum under this  Lease)  then the
        Lessor shall notify the Lessee (with such notice attaching a copy of the
        new Additional  Security  Table) and on the next Adjustment Date falling
        at least ten (10)  Banking  Days after the  delivery of such  Additional
        Security  Table,  the Lessor  shall  either  agree to a reduction in the
        Letter of Credit Amount and/or, depending on the action previously taken
        by the Lessee pursuant to clause 25.2.1, shall release (whether in whole
        or in  part  and to  the  extent  applicable)  any  additional  security
        provided  pursuant to clause  25.2.1 in an amount equal to the amount of
        the Required Security Amount shown in the new Additional  Security Table
        such that  following such  reduction,  amendment or, as the case may be,
        release the Total Security Amount for and during such Security Period as
        shown  in such  new  Additional  Security  Table  is at such  time,  and
        thereafter  will  continue to be, equal to or less than the aggregate of
        the Letter of Credit  Amount,  the  Maximum  Unsecured  Strip  Liability
        Amount and any  Additional  Security  Amount  for and  during  each such
        Security Period and, as the case may be,  thereafter.  It is agreed that
        any such reduction,  amendment or release pursuant to this clause 25.2.2
        shall be without  prejudice  to the rights of the Lessor to require  the
        provision of additional security in the manner contemplated,  and to the
        extent required, by clause 25.2.1.

25.3    Relevant Bank Change of Law Event

        Upon the occurrence of a Relevant Bank Change of Law Event in respect of
        any Relevant  Bank then the Lessee  shall,  within the  Relevant  Period
        applicable to such Relevant Bank Change of Law Event, either:

25.3.1  change the Relevant Bank Security provided by such Relevant Bank and/or,
        as the  case  may be,  replace  such  Relevant  Bank  with a  Qualifying
        Replacement  Bank,  such  that  the  circumstances  constituted  by such
        Relevant Bank Change of Law Event no longer apply and  thereafter  enter
        into either (a) such  supplemental  documentation  to the Relevant  Bank
        Security as such  Relevant  Bank and the Lessor may consider  reasonably
        necessary or, as the case may be, (b) replacement bank security with any
        such  replacement  bank on the  same  terms,  mutatis  mutandis,  as the
        Relevant Bank Security or with such amendments thereto as the Lessor may
        approve;

25.3.2  provide  such other  security  to replace  the  Relevant  Bank  Security
        provided by such Relevant Bank as the Lessor may approve; or

25.3.3  provide such other  additional  security as the Lessor may approve which
        will result in the Lessor  being  satisfied  that the  aggregate  of the
        payments  to be made by such  Relevant  Bank  under  the  Relevant  Bank
        Security  and the payments  receivable  by the Lessor in respect of such
        additional  security  will be equal,  after the  making of the  required
        deduction or withholding  in respect of the Relevant Bank  Security,  to
        the  amounts  which  would have been made by such  Relevant  Bank to the
        Lessor pursuant to such Relevant Bank Security had no such Relevant Bank
        Change of Law Event occurred in relation to such Relevant Bank.

        If the  Lessee  fails to take any of the steps  referred  to in  clauses
        25.3.1,  25.3.2 or 25.3.3 within such  Relevant  Period and otherwise on
        the terms  contained  in this clause the Lessor shall have the option to
        require the Lessee to terminate the leasing of the Ship under this Lease
        and if the Lessor  wishes to exercise  this  option it shall  notify the
        Lessee in writing whereupon the Lessee shall become immediately  obliged
        to give an irrevocable notice to the Lessor terminating the Lease Period
        in accordance with the provisions of clause 3.3 (other than with respect
        to the period of such notice) and the Lease Period shall  terminate upon
        the giving of such  notice.  Save as set out above,  the  provisions  of
        clauses  3.3, 3.4 and 3.5 shall apply to such  termination  of the Lease
        Period.

        The  provisions of this clause 25.3 are subject to the issue of a notice
        by the Lessor pursuant to the provisions of clause 25.10.

25.4    Relevant Bank Illegality Event

        Upon the  occurrence of a Relevant Bank  Illegality  Event in respect of
        any Relevant  Bank then the Lessee  shall,  within the  Relevant  Period
        applicable to such Relevant Bank Illegality Event, either:

25.4.1  change the Relevant Bank Security provided by such Relevant Bank and/or,
        as the  case  may be,  replace  such  Relevant  Bank  with a  Qualifying
        Replacement  Bank,  such  that  the  circumstances  constituted  by such
        Relevant Bank Illegality Event no longer apply and thereafter enter into
        either (a) such supplemental documentation to the Relevant Bank Security
        as such Relevant Bank and the Lessor may consider  reasonably  necessary
        or, as the case may be,  (b)  replacement  bank  security  with any such
        replacement bank on the same terms,  mutatis  mutandis,  as the Relevant
        Bank Security or with such amendments thereto as the Lessor may approve;
        or

25.4.2  provide  such other  security  to replace  the  Relevant  Bank  Security
        provided by such Relevant Bank as the Lessor may approve.

        If the  Lessee  fails to take any of the steps  referred  to in  clauses
        25.4.1 or 25.4.2 within such Relevant  Period and otherwise on the terms
        contained in this clause the Lessor shall have the option to require the
        Lessee to terminate  the leasing of the Ship under this Lease and if the
        Lessor  wishes to  exercise  this  option it shall  notify the Lessee in
        writing whereupon the Lessee shall become immediately obliged to give an
        irrevocable  notice  to the  Lessor  terminating  the  Lease  Period  in
        accordance with the provisions of clause 3.3 (other than with respect to
        the period by such notice) and the Lease Period shall terminate upon the
        giving of such notice.  Save as set out above, the provisions of clauses
        3.3, 3.4 and 3.5 shall apply to such termination of the Lease Period.

        The  provisions of this clause 25.4 are subject to the issue of a notice
        by the Lessor pursuant to the provisions of clause 25.10.

25.5    Termination security requirements

25.5.1  If at any  time  after  Delivery  the  leasing  of  the  Ship  shall  be
        terminated,  whether  pursuant  to clauses  3.3,  3.4,  3.7, 22 or 27 or
        otherwise, and at the time of such termination the Lessor shall not have
        finally agreed with the Board of Inland Revenue the Lessor's Corporation
        Tax  computations  regarding any  liabilities  to  Corporation  Tax (the
        "Potential  Liabilities")  which it may have with respect to the leasing
        of the Ship to the Lessee  under this Lease or the  termination  of such
        leasing  and the sale of the Ship (and which will be taken into  account
        under  the  Financial  Schedule)  or if  there  shall be a  dispute  (of
        whatsoever  nature)  between the Lessor and the Board of Inland  Revenue
        regarding the Lessor's  Corporation  Tax  computations  of the Potential
        Liabilities,  the Lessee  shall ensure and (when such  termination  is a
        voluntary  termination)  as a condition  to the consent of the Lessor to
        such voluntary  termination  that all the existing  security  including,
        without  limitation,  the Letter of Credit and any  Additional  Security
        held by the Lessor at the time of such termination  shall remain in full
        force and effect  until such time as the Board of Inland  Revenue  shall
        have finally agreed the Lessor's said Corporation Tax computations.

25.5.2  If the  Lessor  is of the  opinion  that  the  amount  of such  existing
        security shall not be sufficient to secure the Potential Liabilities the
        Lessee shall and (where such termination is a voluntary  termination) as
        a condition to the consent of the Lessor to such voluntary  termination,
        constitute to the satisfaction of the Lessor such additional security as
        shall be  acceptable  to the  Lessor and  having a value,  for  security
        purposes  (as  calculated  by the  Lessor),  at the date upon which such
        further  security shall be  constituted  as the Lessor,  in its opinion,
        calculates will, when aggregated with any existing security,  secure the
        Potential   Liabilities   (after   taking  into   account  the  relevant
        circumstances  in which the termination has arisen and the  arrangements
        relating to the Ship which have taken place or are  proposed  shall take
        place in respect  of the  disposal  of the Ship at such time  including,
        without  limitation,  the amount of any Net Sale  Proceeds  or Net Total
        Loss Proceeds  received or  receivable by the Lessor at such time).  For
        the  purpose  of this  clause,  the Lessor  agrees to  discuss  any such
        voluntary  termination with the Lessee and agrees to accommodate,  where
        possible,  any  requests  that  the  Lessee  may  make to  increase  the
        efficiency  of the said  voluntary  termination  and thereby  reduce any
        Potential Liabilities.

25.5.3  For the  purposes of this clause 25.5,  the Lessor's and Lessor  Agent's
        Corporation Tax computations  for an Accounting  Period shall be treated
        as having been agreed with the Board of Inland Revenue on the later of:

        (a)     the seventh (7th) anniversary of the Final Date; or

        (b)     the date on which the Lessor and Lessor Agent determine,  acting
                reasonably  and in good  faith,  and  certify  in writing to the
                Lessee,  as being the date on which they are satisfied  that the
                Corporation Tax computations  for all Accounting  Periods of the
                Lessor and Lessor  Agent have become  conclusive  and the Inland
                Revenue  shall  have no  powers  to  reopen  assessment  of such
                Corporation  Tax  computations in the absence of fraud or wilful
                neglect on the part of the Lessor or Lessor Agent.

25.5.4  If the Lessor is of the opinion that the amount of the security required
        to be provided to secure the  Potential  Liabilities  (and after  taking
        into account the relevant  circumstances  in which the  termination  has
        arisen  including,  without  limitation,  the  amount  of any Net  Sales
        Proceeds  or Net Total  Loss  Proceeds  received  or  receivable  by the
        Lessor)  is in fact less than the  amount  of the  security  held by the
        Lessor at the time of  termination  of the  leasing of the Ship then the
        Lessor  shall,  at the time of  termination  and, to the extent that the
        relevant  security  held by the  Lessor  at such  time  permits  partial
        release or reductions, release the amount of the surplus security to the
        Lessee. Notwithstanding the generality of the foregoing, if security has
        been provided in respect of a Potential  Liability which is attributable
        to an accounting period and the Lessor's and Lessor Agent's  Corporation
        Tax  computation  for that period is treated as agreed or  determined in
        accordance  with the  provisions  of this clause 25.5,  the Lessor shall
        release  such  security  to  the  extent  that  it  exceeds  the  actual
        Corporation Tax, as so determined or agreed, relating to that accounting
        period.

25.5.5  If any  security is  required  to be retained by the Lessor  pursuant to
        this clause then the Lessee  shall be entitled to send a written  notice
        to the Lessor  requesting  that any or all of the  existing  security be
        replaced  by  alternative  security  acceptable  to the Lessor and in an
        amount sufficient to secure the relevant  Potential  Liabilities and the
        Lessor  agrees to consider and discuss  with the Lessee,  in good faith,
        any such alternative security proposals.

25.5.6  Where any opinion or  accommodation  is to be  exercised or given by the
        Lessor  pursuant to this clause 25.5 it shall be  exercised  or given by
        the Lessor in its sole and absolute  discretion  but in so exercising or
        giving that opinion the Lessor shall act reasonably and in good faith.

25.6    Termination of Time Charter

        If the  chartering  of the Ship under the Time Charter shall at any time
        be terminated (including,  without limitation, by effluxion of time) and
        within ninety (90) days of such termination either:

25.6.1  the Time Charter is not  replaced by a new time charter  entered into by
        the Sub-Lessee with the Time Charterer on  substantially  the same terms
        (except as to term) as the Time Charter (including,  without limitation,
        in relation to the amount of charterhire); or

25.6.2  a new time  charter is not entered  into by the  Sub-Lessee  with a time
        charterer  who has a minimum  credit rating of BBB+ by Standard & Poor's
        or Baa1 with Moody's (a "Rated Time Charterer") or with another major or
        national  company  approved by the Lessor (in its  absolute  discretion)
        pursuant to clause  15.2.21  notwithstanding  that such company is not a
        Rated Time Charterer,

        the Lessee shall, within ten (10) Banking Days of its receipt of written
        notice from the Lessor constitute to the satisfaction of the Lessor such
        additional  security as shall be  acceptable  to the Lessor and having a
        value for security  purposes (as  determined  by the Lessor) at the date
        upon which such  additional  security shall be constituted  equal to the
        Strip  Liability  Amount at such time and during  each  Security  Period
        falling  thereafter  and any other  unsecured  obligations of the Lessee
        under this Lease and the other Lease Documents.

        Where the Lessee is required to provide  security to the Lessor pursuant
        to this clause 25.6, the Lessor agrees that it will consider, but in its
        absolute  discretion and without  obligation,  a request from the Lessee
        that the Lessor  accept  additional  security of an amount less than the
        Strip Liability Amount and any other unsecured obligations of the Lessee
        under  this  Lease  and the  other  Lease  Documents  to  recognise  any
        available security value in the Ship at that time.

        The Lessor  agrees that for the purpose of clause 25.6 the  provision by
        the  Lessee of a letter of credit or bank  guarantee  from a  Qualifying
        Replacement  Bank acceptable to the Lessor,  on terms  acceptable to the
        Lessor and in an amount equal to the amount of the  additional  security
        required to be provided under this clause shall be acceptable additional
        security for the purpose of this clause.

        If the action  required to be taken by the Lessee under this clause 25.6
        is not taken within the time period and otherwise on the terms contained
        in this clause the Lessor shall have the option to require the Lessee to
        terminate  the  leasing  of the Ship  under this Lease and if the Lessor
        wishes to  exercise  this  option it shall  notify the Lessee in writing
        whereupon  the  Lessee  shall  become  immediately  obliged  to  give an
        irrevocable  notice  to the  Lessor  terminating  the  Lease  Period  in
        accordance with the provisions of clause 3.3 (other than with respect to
        the period of such notice) and the Lease Period shall terminate upon the
        giving of such notice.  Save as set out above, the provisions of clauses
        3.3, 3.4 and 3.5 shall apply to such termination of the Lease Period.

        Where the Time Charter is replaced in accordance  with clauses 25.6.1 or
        25.6.2  then the  provisions  of this clause 25.6 shall apply with equal
        effect to any subsequent termination of the chartering of the Ship under
        such replacement Time Charter.

25.7    [Clause intentionally deleted]

25.8    Required Security Amount

25.8.1  On the first day of each Adjustment  Period, the Lessor shall notify the
        Lessee in  writing  and shall  advise  the  Lessee  of the  amount  (the
        "Applicable  LC  Increased  Amount") by which the amount of the security
        required to be  provided by the Lessee  pursuant to the Letter of Credit
        Amount  for the  Security  Period  commencing  on the  first  day of the
        relevant  Adjustment Period needs to increase so that during each day of
        that  Security  Period  the  Letter  of  Credit  Amount  is equal to the
        Required LC Amount during each day of that Security  Period.  The Lessor
        shall, as  contemplated by paragraph 2(a) of the Letter of Credit,  copy
        to the LC Bank any such notice  delivered to the Lessee pursuant to this
        sub-clause at the same time such notice is delivered to the Lessee.

25.8.2  Following  receipt of any  written  notice  from the Lessor  pursuant to
        clause 25.8.1, if the Applicable LC Increased Amount for each day of the
        relevant Security Period exceeds the Variable Liability Amount of the LC
        Bank for each  corresponding  day of that Security Period as notified by
        the LC Bank to the Lessor  pursuant to  paragraph  2(b) of the Letter of
        Credit, the Lessee shall, on or before the date falling five (5) Banking
        Days after the commencement of the relevant  Adjustment  Period referred
        to in clause  25.8.1,  procure that the LC Bank agrees,  by means of the
        issue of a notice pursuant to paragraph 2(c) of the Letter of Credit, to
        increase the Letter of Credit  Amount by an amount equal to the relevant
        shortfall such that the  Applicable LC Increased  Amount set out in that
        written notice for each day falling during that Security Period is equal
        to or less  than the  Variable  Liability  Amount  for each day  falling
        during that Security Period.

25.8.3  In addition to the  obligations  contained in clause  25.8.2,  if at any
        time the  Fixed  Liability  Amount  shall be less than the  Required  LC
        Amount  during any  Security  Period,  the Lessor  shall be  entitled to
        notify the Lessee in writing not less than  fifteen  (15)  Banking  Days
        prior to the commencement of the relevant  Security Period in which such
        shortfall  shall arise and,  upon  receipt of that written  notice,  the
        Lessee  shall,  not  later  than  ten  (10)  Banking  Days  prior to the
        commencement of the relevant  Security Period,  procure that the LC Bank
        agrees to increase the Letter of Credit Amount,  in accordance  with the
        provisions of paragraph 2(e) of the Letter of Credit, by an amount equal
        to the relevant  shortfall and with effect from the  commencement of the
        relevant  Security Period such that with effect from the commencement of
        the  relevant  Security  Period,   the  Fixed  Liability  Amount  shall,
        following the relevant increase,  be equal to the Required LC Amount for
        that Security Period and thereafter.

25.8.4  The  provisions  of  this  clause  25.8  set out  the  primary  security
        requirements of the Lessor and apply independently of clause 25.2.

25.9    General

        For the purpose of this clause 25, the value of any additional  security
        provided  or to be  provided to the Lessor  shall be  determined  by the
        Lessor  without any  necessity  for the Lessor  giving to the Lessee any
        reason for that determination save that:

25.9.1  where such  additional  security is  constituted  by security  over cash
        deposits,  the value of such  additional  security shall be equal to the
        amount of such cash deposit at any relevant time; and

25.9.2  where such  additional  security  comprises a letter of credit or demand
        guarantee  issued by a Qualifying  Replacement  Bank,  the value of such
        additional  security shall be the face value of such letter of credit or
        demand guarantee.

        In connection with any Additional Security provided,  or any replacement
        of the LC Bank effected,  in accordance  with this clause 25, the Lessor
        shall be entitled to receive  such  evidence  and  documents of the kind
        referred to in Schedule 1 as may in the Lessor's  opinion be appropriate
        and such favourable legal opinions as the Lessor shall in its reasonable
        discretion  require  and the  Lessor and the Lessee  shall  agree,  as a
        condition precedent to the implementation of such security arrangements,
        such reasonable  changes to the terms of this Lease and any of the other
        Relevant  Documents as the Lessor  considers  necessary having regard to
        the   proposed   nature  of  the  change  or  changes  to  the  security
        arrangements  in respect of this Lease.  Any Additional  Security shall,
        unless otherwise agreed by the Lessor, be free from  Encumbrances  other
        than any Encumbrance in favour of the Lessor.

25.9.3  If either  party  becomes  aware of the  occurrence  of a Relevant  Bank
        Change of Law Event or a Relevant Bank Illegality  Event,  then it shall
        promptly notify the other in writing.

25.9.4  Where any  replacement  security is to be  provided  by a Relevant  Bank
        (other  than the  Initial LC Bank) the Lessor  shall be  entitled,  as a
        condition to the Lessor's  acceptance  of such Relevant Bank and without
        prejudice  to any other  conditions  which may be imposed in  connection
        with such replacement  security, to require that a minimum Credit Rating
        test be applied in respect of such Relevant Bank.

25.10   Letter of Credit Adverse Event and liability reduction notice

25.10.1 If the Lessor  receives an Adverse Event Notice pursuant to paragraph 11
        of the Letter of Credit then,  without  prejudice to the  provisions  of
        clauses  25.3 and 25.4,  the Lessor  agrees to consult with the LC Bank,
        the Lessee and the Lessee Parent in accordance  with paragraph  11(b) of
        the Letter of Credit where such consultation is contemplated by the said
        paragraph 11(b). If,  notwithstanding  any such applicable  consultation
        (where  consultation  is to take place  pursuant  to the said  paragraph
        11(b)),  the LC Bank serves a notice on the Lessor pursuant to paragraph
        11(c) of the Letter of Credit  and,  at the time that  notice is served,
        the Lessee has not complied with its  obligations  under clauses 25.3.1,
        25.3.2 or 25.3.3 or, as applicable,  clauses 25.4.1 or 25.4.2 in respect
        of that  Adverse  Event,  then the Lessor  shall be  entitled to serve a
        written notice on the Lessee and in such circumstances the issue of that
        notice  shall  give  rise to a  Termination  Event  pursuant  to  clause
        26.1.3(d).

25.10.2 If the Lessor  does not  receive a notice  from the LC Bank  pursuant to
        paragraph  2(e) of the Letter of Credit  advising  the  Lessor  that the
        Fixed  Liability  Amount  shall not  increase by an amount  equal to the
        applicable  Additional  Amount by which the  Fixed  Liability  Amount is
        intended to increase at such time in accordance  with the  provisions of
        the said  paragraph  2(e) then,  without  prejudice to the provisions of
        clause 25.8.3, the Lessor shall be entitled to serve a written notice on
        the Lessee and in such circumstances the issue of that notice shall give
        rise to a Termination pursuant to clause 26.1.3(d).

25.11   Demands under the Letter of Credit

        The Lessor  will not make a demand  under a Letter of Credit  unless and
        until:

25.11.1 the  Termination Sum has become due and payable (having regard to clause
        27.4.1(a) for this purpose); and

25.11.2 the  Termination  Sum has not  been  paid  in full on the due  date  for
        payment.

26      Termination Events

26.1    Termination Events

        The  Lessor  and the  Lessee  agree  that it is a  fundamental  term and
        condition  of this Lease that none of the  following  events shall occur
        during the Lease Period and that the  occurrence of any of the following
        events  shall  constitute  a  repudiatory  breach  of this  Lease by the
        Lessee:

26.1.1  Non-payment: any Relevant Party fails to pay any sum payable by it under
        any of the Relevant  Documents  at the time,  in the currency and in the
        manner  stipulated  in the  Relevant  Documents  (and so that,  for this
        purpose,  sums payable on demand shall be treated as having been paid at
        the stipulated time if paid within three (3) Banking Days of demand); or

26.1.2  Breach of Insurance and certain other obligations:

        (a)     the Lessee fails to obtain and/or  maintain the Insurances or if
                any insurer in respect of the Insurances  cancels the Insurances
                or  disclaims  liability  by  reason  of  mis-statement  in  any
                proposal for the  Insurances or for any other failure or default
                on the part of the Lessee,  the  Sub-Lessee,  the Manager or any
                other member of the Golar Gas Group; or

        (b)     the Lessee fails to comply with its  obligations  under  clauses
                11.1.9 or 11.1.10; or

26.1.3  Security provision: the Lessee:

        (a)     fails to comply with any  obligation  on its part  contained  in
                clause 25 to provide  Additional  Security  for its  obligations
                hereunder within the time provided in that clause; or

        (b)     fails to give any  notice of  termination  required  to be given
                under,  and within the time period  specified  in, the  relevant
                sub-clauses of clause 25; or

        (c)     fails to perform its obligations under clauses 25.8.2 and 25.8.3
                within the time period provided in those clauses; or

        (d)     the Lessor  services a notice on the Lessee  pursuant to clauses
                25.10.1 or 25.10.2;

26.1.4  Breach of other obligations: any Relevant Party commits any breach of or
        omits to observe any of the obligations or undertakings  expressed to be
        assumed  by it under any of the  Relevant  Documents  (other  than those
        referred  to in  clauses  15.2.19,  26.1.1,  26.1.2 and  26.1.3)  and in
        respect  of any such  breach or  omission  which is  capable  of remedy,
        within ten (10) Banking Days of the Lessor notifying such Relevant Party
        of such  breach or  omission,  the  Lessee has not  demonstrated  to the
        reasonable  satisfaction  of the Lessor that such breach or omission has
        been remedied; or

26.1.5  Misrepresentation:  any  representation or warranty made or deemed to be
        made or  repeated  by any  Relevant  Party in or  pursuant to any of the
        Relevant  Documents  or in any  document  or  certificate  or  statement
        referred to in or delivered  under any of the  Relevant  Documents is or
        proves to have  been  incorrect  in any  material  respect  when made or
        deemed to be made or repeated  unless the  circumstances  giving rise to
        the incorrectness are, in the reasonable opinion of the Lessor,  capable
        of remedy and are  remedied  within ten (10)  Banking Days of the Lessor
        notifying the Relevant Party of the requirement to remedy; or

26.1.6  Cross-default:

        (a)     at any time the aggregate amount at such time of:

                (i)     any Borrowed  Money or Swap  Liabilities of any Relevant
                        Party or any other  member of the Lessee  Group which is
                        not paid when due and remains unpaid;

                (ii)    any Borrowed  Money of any  Relevant  Party or any other
                        member of the Lessee Group which has become  (whether by
                        declaration  or  automatically  in  accordance  with the
                        relevant agreement or instrument constituting the same),
                        or is capable of being declared due and payable prior to
                        the date when it would otherwise have become due (unless
                        as a result of the exercise by the relevant  person of a
                        voluntary   right  of  prepayment   or  upon   mandatory
                        prepayment  as a  result  of a  change  of law or  other
                        circumstances  not  constituting  an  event  of  default
                        under,  or breach of, any  agreement  regulating  and/or
                        securing the relevant Borrowed Money);

                (iii)   any  facility or  commitment  available  to any Relevant
                        Party or any other member of the Lessee  Group  relating
                        to Borrowed Money which has been withdrawn, suspended or
                        cancelled by reason of any default  (however  described)
                        of the person concerned;

                (iv)    the amount of Swap  Liabilities of any Relevant Party or
                        any other  member of the Lessee  Group  which are due or
                        capable of being declared due upon early  termination of
                        the relevant  transaction by the relevant  counterparty;
                        and

                (v)     any  amounts  demanded  of,  but not  paid  when due and
                        remaining  unpaid  by any  Relevant  Party or any  other
                        member  of the  Lessee  Group  under  any  guarantee  in
                        respect of Borrowed Money or Swap Liabilities,

                exceeds five million Dollars ($5,000,000); or

        (b)     any event set out in clause 26 of any Other  Ship  Lease  occurs
                and is continuing;

26.1.7  Legal process:  any judgment or order made against any Relevant Party is
        not stayed or complied with within seven (7) days or a creditor attaches
        or takes possession of, or a distress, execution, sequestration or other
        process is levied or enforced  upon or sued out  against,  any  material
        part (in the  reasonable  opinion of the  Lessor)  of the  undertakings,
        assets,  rights or revenues of any Relevant  Party and is not discharged
        within seven (7) days; or

26.1.8  Insolvency:  the  Sub-Lessee  or the Manager is deemed unable to pay its
        debts  within the meaning of section  123(1)(a),  (b), (c) or (2) of the
        Insolvency Act 1986 or any other Relevant Party becomes  insolvent under
        the applicable  insolvency  laws of the place of  incorporation  of such
        Relevant  Party  or  stops  or  suspends  making  payments  (whether  of
        principal or interest)  with respect to all or any class of its debts or
        announces an intention to do so; or

26.1.9  Reduction or loss of capital:  a meeting is convened  (without the prior
        written approval of the Lessor) by any Relevant Party for the purpose of
        passing any  resolution  to purchase,  reduce or redeem any of its share
        capital; or

26.1.10 Winding  up: any  petition is  presented  or other step is taken for the
        purpose of winding up any Relevant Party (not being a petition which the
        Lessee or such other Relevant Party can demonstrate to the  satisfaction
        of the  Lessor,  by  providing  an opinion  of  leading  counsel to that
        effect, is frivolous,  vexatious or an abuse of the process of the court
        or relates to a claim to which such  Relevant  Party has a good  defence
        and which is being  vigorously  contested by such Relevant  Party and in
        respect of which reserves acceptable to the Lessor have been made) or an
        order is made or  resolution  passed for the winding up of any  Relevant
        Party or a notice  is issued  convening  a meeting  for the  purpose  of
        passing any such resolution; or

26.1.11 Administration: any petition is presented or other step is taken for the
        purpose of the appointment of an  administrator of any Relevant Party or
        the Lessor  believes that any such petition or other step is imminent or
        an administration order is made in relation to any Relevant Party; or

26.1.12 Appointment  of receivers  and  managers:  any  administrative  or other
        receiver is appointed of any Relevant Party or any material part (in the
        reasonable  opinion of the Lessor) of its assets and/or  undertaking  or
        any other  steps are taken to enforce  any  Encumbrance  over all or any
        material part (in the reasonable opinion of the Lessor) of the assets of
        any Relevant Party; or

26.1.13 Compositions:  any steps are taken,  or negotiations  commenced,  by any
        Relevant  Party or by any of its  creditors  with a view to the  general
        readjustment or  rescheduling  of all or part of its  Indebtedness or to
        proposing any kind of composition,  compromise or arrangement  involving
        such company and any of its creditors; or

26.1.14 Analogous  proceedings:  there occurs, in relation to any Relevant Party
        in any country or  territory in which any of them carries on business or
        to the jurisdiction of whose courts any part of their assets is subject,
        any event which,  in the  reasonable  opinion of the Lessor,  appears in
        that  country  or  territory  to  correspond  with,  or have  an  effect
        equivalent  or similar to, any of those  mentioned in clauses  26.1.8 to
        26.1.12  (inclusive) or any Relevant Party otherwise becomes subject, in
        any such country or  territory,  to the operation of any law relating to
        insolvency, bankruptcy or liquidation; or

26.1.15 Cessation  of  business:  any  Relevant  Party  suspends  or  ceases  or
        threatens  to  suspend  or cease to carry on the whole or a  substantial
        part of its business; or

26.1.16 Repudiation: any Relevant Party repudiates any of the Relevant Documents
        or does or causes or permits to be done any act or thing  evidencing  an
        intention  to  repudiate  any of  the  Transaction  Documents  or if the
        validity or enforceability of any of the Relevant Documents shall at any
        time and for any reason be contested  by any  Relevant  Party which is a
        party thereto, or if any such Relevant Party shall deny that it has any,
        or any further, liability thereunder; or

26.1.17 Arrest: the Ship is arrested,  confiscated,  seized, taken in execution,
        impounded,  forfeited, detained in exercise or purported exercise of any
        possessory  lien or other claim, or otherwise taken from the possession,
        other than due to a Lessor's  Encumbrance,  of the Lessee and/or, during
        the Sub-Lease Period,  the Sub-Lessee and the Lessee and/or,  during the
        Sub-Lease  Period,  the Sub-Lessee  shall fail to procure the release of
        the Ship within a period of ten (10) Banking Days; or

26.1.18 Environment:  the  Lessee  and/or  the  Sub-Lessee  and/or  any of their
        respective   Environmental   Affiliates   fails  to   comply   with  any
        Environmental Law or any Environmental Approval or the Ship or any other
        Relevant Ship is involved in an Environmental  Incident which gives rise
        or would be likely to give rise to Environmental  Claims which could, in
        the opinion of the Lessor, be expected to have a material adverse effect
        on the business, assets, operations,  property or financial condition of
        the Lessee Group taken as a whole; or

26.1.19 Qualifying  purpose:  if,  during the  designated  period (as defined in
        section  106 CAA),  the Ship  shall be used in a manner or for a purpose
        which results in the application of sections 109, 110, 111, 112, 113 and
        117  CAA  (including,   without  limitation  and  where  applicable,  in
        circumstances  arising  in  consequence  of the  conversion  of the Time
        Charter into a bareboat charter pursuant to clause 46(b)(ii) of the Time
        Charter); or

26.1.20 Lessee  ceases to be  Subsidiary:  (a) the  Lessee  shall  cease to be a
        wholly  owned  subsidiary  of Gotaas  Larsen or (b) Gotaas  Larsen shall
        cease to be a wholly owned  subsidiary  of the Lessee  Parent or (c) the
        Relevant Shareholder shall cease to directly or indirectly,  legally and
        beneficially  own twenty  five  percent  (25%) or more of the issued and
        outstanding share capital of the Lessee Parent; or

26.1.21 Termination  of  Sub-Lease:  the  Sub-Lease  terminates  for any  reason
        whatsoever.

26.2    Mandatory Prepayment Events

        Each of the  following  shall be a  Mandatory  Prepayment  Event for the
        purpose of this Agreement:

26.2.1  Seizure:  all or a material part of the undertaking,  assets,  rights or
        revenues  of, or shares or other  ownership  interest  in, any  Relevant
        Party are seized, nationalised, expropriated or compulsorily acquired by
        or under the authority of any  government in any manner which would,  in
        the reasonable opinion of the Lessor, affect the ability of the Relevant
        Party to perform its obligations  under the Relevant  Documents to which
        it is a party; or

26.2.2  Invalidity:  (except  where due to a Relevant Bank  Illegality  Event in
        which case clause 25.4 shall apply) any of the Relevant  Documents shall
        at any  time and for any  reason  become  invalid  or  unenforceable  or
        otherwise  cease to remain in full force and  effect and  (unless in the
        reasonable opinion of the Lessor any such invalidity or unenforceability
        is incapable of  rectification  or remedy) the Relevant Party shall have
        failed to procure within ten (10) Banking Days notice from the Lessor to
        do so that the foregoing is no longer invalid or unenforceable; or

26.2.3  Unlawfulness:  (except where due to a Relevant Bank Illegality  Event in
        which case clause 25.4 shall apply) it becomes impossible or unlawful at
        any time for any Relevant  Party or the Standby  Purchaser to fulfil any
        of the covenants and obligations expressed to be assumed by it in any of
        the  Relevant  Documents or for the Lessor to exercise the rights or any
        of them vested in it under any of the  Relevant  Documents  or otherwise
        and  (unless  in  the   reasonable   opinion  of  the  Lessor  any  such
        impossibility  or unlawfulness is incapable of  rectification or remedy)
        the Relevant Party or the Standby Purchaser shall have failed to procure
        within ten (10)  Banking  Days  notice from the Lessor to do so that the
        foregoing is no longer impossible or unlawful; or

26.2.4  Change in Law: there occurs any Change in Law  (considered by the Lessor
        in its absolute  discretion,  to be  materially  adverse to the Lessor's
        interests)  pursuant  to which  there is,  in the  Lessor's  opinion,  a
        potential  risk of the  Lessor  incurring  any  liability  or  increased
        liability  to any third party by virtue of its rights in relation to the
        Ship or otherwise in connection with the Relevant  Documents  and/or the
        rights and  obligations of the Lessor  thereunder and (a) such liability
        or increased  liability  is not, or does not continue to be,  covered by
        insurance   which  is,  in  the   reasonable   opinion  of  the  Lessor,
        satisfactory  having regard to such liability or increased  liability or
        (b) such  potential  risk is not promptly  removed or  terminated by the
        Lessee  moving  the Ship to,  and  keeping  the Ship in, a  location  or
        locations to which such potential risk would not apply or (c) such other
        steps as the  Lessor  considers  reasonably  necessary  to  remove  such
        potential  risk in such  circumstances  are not  promptly  taken  by the
        Lessee.

27      Lessor's rights following a Termination  Event and Mandatory  Prepayment
        Event

27.1    Termination rights and payments

        At any time after the occurrence of any Termination  Event (and provided
        that the same is  continuing)  the Lessor  may, by notice to the Lessee,
        accept any  repudiation  by the Lessee of this Lease  constituted by the
        occurrence of that Termination Event  (whereupon,  the Lessee agrees and
        acknowledges,  the  Lessee's  and  the  Sub-Lessee's  right,  title  and
        interest in and to the Ship and to possess  and operate the Ship,  shall
        terminate)  and,  subject  to the terms of the Quiet  Enjoyment  Letter,
        retake  possession of the Ship and the Lessee agrees that the Lessor may
        for  this  purpose  enter  upon  any  premises  belonging  to or in  the
        occupation or under the control of the Lessee where the Ship or any part
        thereof may be located and upon the  serving of the  Termination  Notice
        (and  irrespective  of whether  possession is retaken by the Lessor) the
        Lessee shall pay to the Lessor  forthwith upon such termination such sum
        as shall equal the aggregate of:

27.1.1  all amounts due under this Lease and any of the other Lease Documents as
        shall be payable and remain outstanding; and

27.1.2  all  Indemnity  Losses (as  defined  in clause  9.4 but which  Indemnity
        Losses shall not include, for the avoidance of doubt, any loss of profit
        other than any  Termination  Fee)  incurred by the Lessor in  connection
        with such termination including,  without prejudice to the generality of
        the  foregoing,  all  costs  and  expenses  so  incurred  in  recovering
        possession of the Ship or any part thereof and in carrying out any works
        or  modifications  required to bring the Ship or any part  thereof up to
        the condition specified in clause 18.1,

        and  the  Lessee  shall  also  pay to the  Lessor  forthwith  upon  such
        termination  by way of  agreed  compensation  and not as a  penalty  the
        amount of the Termination Sum as at the date of termination.

        If a  Termination  Notice is served  pursuant to this clause  27.1,  the
        Termination Sum shall become due in accordance with such notice and this
        clause 27.1 notwithstanding the existence of a Total Loss at such time.

27.2    Application of Net Sale Proceeds

        Without  prejudice to the  obligation of the Lessee to make the payments
        referred to in clause 27.1, upon any such  termination as is referred to
        in clause 27.1 and provided that the Lessor shall not be prevented  from
        so doing for any reason whatsoever  (including,  without limitation,  if
        prevented  from doing so by reason of the  provisions of clause 9 of the
        Proceeds Deed), the Lessor or, where  applicable,  the Relevant Security
        Agent as agent of the Lessor  pursuant to the  provisions of clause 9 of
        the  Proceeds  Deed  shall  endeavour  to  sell  the  Ship  as  soon  as
        practicable.  The Net Sale  Proceeds  shall be  applied by the Lessor as
        follows:

27.2.1  first, in retention by the Lessor of an amount equal to one tenth of one
        per cent (0.1%) of the Net Sale Proceeds;

27.2.2  secondly,  in  retention  by the Lessor of an amount equal to the lesser
        of:

        (a)     all or any part of the  Termination  Sum which the Lessee  shall
                not,  on or  before  the  date of  application  of the Net  Sale
                Proceeds,  have paid to the  Lessor in  accordance  with  clause
                27.1; and

        (b)     the balance of the Net Sale Proceeds;

27.2.3  thirdly,  in or towards  settlement  of any other  amounts  owing by the
        Lessee  to the  Lessor  under  this  Lease  or any  of the  other  Lease
        Documents (including any interest due in respect thereof);

27.2.4  fourthly,  by way of rebate of Rental,  in or towards  settlement of any
        amounts owing to the Other Lessors under the Other Ship Leases or any of
        the Other Ship Relevant Documents, such amounts to be paid to the Lessor
        Agent for  application  in accordance  with clause 4.3 of the Agency and
        Trust  Deed and  clauses  27.2.2  and  27.2.3 of each of the Other  Ship
        Leases;

27.2.5  fifthly,  in or  towards  refunding  to the  Lessee  by way of rebate of
        Rental an amount equal to all Rental (including, without limitation, any
        Termination Sum) paid to the Lessor by the Lessee under this Lease; and

27.2.6  sixthly,  to the Lessee,  by way of sales  commission  or  otherwise  as
        appropriate.

27.3    Mandatory Prepayment

        On or at any time after the occurrence of a Mandatory  Prepayment  Event
        and whilst it is continuing:

27.3.1  the Lessor may, by notice to the Lessee after the Delivery  Date,  elect
        to treat the  occurrence  of that  event as  constituting  notice by the
        Lessee pursuant to clause 3.3 but without reference to the notice period
        referred to in that clause;

27.3.2  on the date  falling  five (5) Banking Days after the date of the notice
        from the Lessor referred to in clause 27.3.1, the Lessee will pay to the
        Lessor the amounts referred to in clause 27.1 as at the required date of
        that payment;

27.3.3  the Lessor will use reasonable endeavours to sell the Ship in accordance
        with the applicable provisions of clause 3;

27.3.4  any Net Sale  Proceeds from a sale of the Ship pursuant to clause 27.3.3
        will  be  applied  in the  manner  described  in  clause  3.4  or,  if a
        Termination  Event has occurred and is continuing at the time of receipt
        of the Net Sale Proceeds, clause 27.2;

27.3.5  with  effect on and from the date of the  payment  by the  Lessee of all
        amounts  pursuant to clause 27.3.2,  the Lessee shall cease to be liable
        to pay Rental  under this Lease but without  prejudice  to the  Lessee's
        obligations  pursuant  to  paragraphs  4, 6  and/or  7 of the  Financial
        Schedule; and

27.3.6  notwithstanding  anything else to the contrary in this Lease but subject
        to any rights of the Lessor under this Lease following the occurrence of
        a Termination Event, the Lease Period will continue until and end on the
        date on which the Ship is delivered to a purchaser of the Ship following
        a sale pursuant to clause 27.3.3.

27.4    Termination Sum liabilities

27.4.1  Limitation on recourse

        Notwithstanding  anything to the contrary  expressed or implied  herein,
        where the  Termination  Sum  becomes  payable by the Lessee  pursuant to
        clauses 27.1 or 27.3.1 or, if at the time of any  voluntary  termination
        of the leasing of the Ship  pursuant to clause 3.3 a Relevant Bank Event
        has arisen,  the Lessor shall have no recourse against the Lessee or any
        of the assets and  undertakings of the Lessee in respect of such part of
        the Termination Sum as is equal to the Applicable Security Amount at the
        relevant  time and the  relevant  part of the  Termination  Sum which is
        equal to the said Applicable Security Amount shall be recoverable by the
        Lessor  only from and to the extent of the  payments  made by a Relevant
        Bank under the Letter of Credit or other Additional  Security  Document.
        The limitation on recourse contained in this clause 27.4 is given on the
        basis that:

        (a)     the  foregoing  limitation  on recourse  shall be ignored in the
                determination of the Lease Obligations and the Lease Obligations
                shall include all moneys,  obligations and liabilities which are
                to be paid,  repaid,  performed,  satisfied or discharged by the
                Lessee, notwithstanding the foregoing limitation of recourse;

        (b)     to the extent  that a claim or proof is a  necessary  procedural
                step to  enable  the  realisation  or  enforcement  of the  full
                benefit of this Lease or the other Relevant Documents, or to the
                exercise by the Lessor of any right, title, interest and benefit
                in, to,  under or pursuant to this Lease and the other  Relevant
                Documents,  the Lessor shall be entitled to make or file a claim
                or proof in any Insolvency Event in relation to the Lessee,  but
                not itself to take any legal action or  proceeding  to instigate
                any such  Insolvency  Event in  respect  of amounts to which the
                obligations of the Lessee are limited recourse  pursuant to this
                clause; and

        (c)     save where the Lessor has agreed to limit its rights of recourse
                against  the Lessee  under,  or as  referred  to in, this clause
                27.4, the Lessor shall have full recourse  against the Lessee in
                respect  of all  of  the  Lease  Obligations.  Accordingly,  and
                without limiting the generality of the foregoing,  to the extent
                that the  Termination Sum and any other amounts due and owing by
                the  Lessee to the Lessor  under this Lease and the other  Lease
                Documents   exceeds  the  Applicable   Security  Amount  at  the
                applicable time, the Lessee shall be obliged to make payment for
                the  relevant  excess  in full and the  Lessor  shall  have full
                recourse  to the Lessee  and its assets to the extent  that such
                payment is not made.

        Where the limitation on recourse  arises by reason of the existence of a
        Relevant Bank Event at the time of any termination of the leasing of the
        Ship pursuant to clause 3.3, the Lessee acknowledges and agrees that the
        Lessor  shall be entitled to make a demand  and/or,  as the case may be,
        exercise  all its  rights  under any  Letter  of  Credit  or  Additional
        Security Document provided by that Relevant Bank.

27.4.2  Suspense accounts

        Any money  received  by the  Lessor  under  any  Letter of Credit or any
        Additional  Security  Document  may,  following  the  occurrence  of  an
        Insolvency  Event in respect  of either the Lessee or the Lessee  Parent
        which is  continuing,  be  placed  by the  Lessor  to the  credit  of an
        interest  bearing  suspense account with the Account Bank with a view to
        preserving the rights of the Lessor to prove for the whole of its claims
        against the Lessee  and/or the Lessee  Parent or any other person liable
        or, as the Lessor may elect,  may be applied in or towards  satisfaction
        of the  amounts  then due and  payable  to the  Lessor  under  the Lease
        Documents.

28      Notices

        Every notice, request, demand or other communication under this Lease or
        any of the other Lease Documents shall:

28.1.1  be in writing  delivered  personally  or by first class  prepaid  letter
        (airmail if  available),  or  facsimile  transmission  or other means of
        communication in permanent written form;

28.1.2  be deemed to have been received,  subject as otherwise  provided in this
        Lease,  in the case of a letter,  when delivered  personally or five (5)
        days after it has been put to the post and,  in the case of a  facsimile
        transmission or other means of  telecommunication  or permanent  written
        form, at the time of despatch  (provided that if the date of despatch is
        not a business day in the country of the addressee it shall be deemed to
        have been  received at the opening of business on the next such business
        day); and

28.1.3  be sent:

        (1)     to the Lessor at
                c/o  Sovereign  House
                PO Box 302 298  Deansgate
                Manchester  M3 4HH
                Fax No:  0161 953 3517
                Attention:  Corporate Administration Manager

        (2)     to the Lessee at:
                30 Marsh Wall
                London E14 9TP
                Fax No:  (44) 207 517 8601
                Attention:  the President

        or to such other address,  and/or numbers as is notified by one party to
        the other under this Lease.

29      Liens and indemnities

29.1    No authority to impose liens

        Neither  the  Lessee  nor the  Master of the Ship  shall have any right,
        power or authority to create incur or permit to be imposed upon the Ship
        any liens  whatsoever  except for Permitted  Liens. The Lessee agrees to
        exhibit a  certified  copy of this Lease  with the Ship's  papers and to
        exhibit the same to any person having business with the Ship which might
        give rise to any lien thereon other than Permitted Liens.

        The Lessee further  agrees to fasten to the Ship in a conspicuous  place
        and to keep so  fastened  during  the Lease  Period a notice  reading as
        follows:

        "This Ship is the property of Golar Gimi  (Bermuda)  Limited (whose name
        is to be changed to Sovereign  Gimi Limited) (the "Lessor") and is under
        demise  charter to Golar Gas Holding  Company,  Inc. (the  "Lessee") and
        sub-demise  charter to Golar Gimi UK Ltd. (the "Sub-Lessee") and, by the
        terms of the Lease,  neither the Lessee,  the  Sub-Lessee nor the Master
        nor any  servant  or agent  thereof  has any right,  power or  authority
        whatsoever to contract on behalf of the Lessor or to pledge the Lessor's
        credit or to  involve  the  Lessor  in any  liability  whatsoever  or to
        create,  incur,  or permit to be imposed on the Ship any lien whatsoever
        except for general average, crews' wages and salvage",

        or in such other form as the Lessor may reasonably  require from time to
        time.

        The Lessee  shall not remove or cover up such  notice and will not place
        or permit to be placed any other notice  (affecting the ownership of the
        Ship or otherwise  relating to the rights of the Lessor and dealing with
        the rights of any person other than the Lessor, the First Security Agent
        and the  Second  Security  Agent)  in or on the Ship  without  the prior
        written  consent  of the Lessor  (such  consent  not to be  unreasonably
        withheld so long as the same is not inconsistent  with the rights of the
        Lessor.

        The  Lessee  agrees  to give  written  instructions  with  regard to the
        foregoing  matters to the Master of the Ship, such instructions to be in
        such terms as may from time to time be required by the Lessor.

29.2    Release from arrest:  Lessor's vessels

        If the Ship or any other vessel for the time being owned (in whole or in
        part) by or leased to the Lessor  shall at any time have a writ or libel
        filed against it or be arrested, attached or levied upon pursuant to any
        legal  process or purported  legal process or be detained in exercise or
        purported  exercise of any lien or claim of whatsoever  nature,  whether
        arising  out of the use or  operation  of the  Ship or out of the use or
        operation  of any other  vessel  owned by or leased or  chartered to the
        Lessee or the  Sub-Lessee  or otherwise by reason of the act or omission
        of any  of the  aforesaid  persons,  the  Lessee  shall  forthwith  upon
        receiving  notice thereof at its expense procure the release of the Ship
        or such  other  vessel  (as the  case may  require)  from  such  arrest,
        detention,  attachment  or levy or, as the case may be, the discharge of
        the  writ or libel by  providing  bail or  procuring  the  provision  of
        security or  otherwise as the  circumstances  may require and the Lessee
        shall be  responsible  for  discharging  each  and  every  liability  in
        connection with any such process,  claim, lien or other action.  Without
        prejudice to the generality of the other  indemnities  contained in this
        Lease or any of the other Lease Documents, should any other vessel owned
        by the Lessor and leased by it otherwise than to the Lessee be arrested,
        detained,  attached  or levied upon or be the subject of a writ or libel
        in such circumstances, the Lessee shall indemnify the Lessor against all
        claims  made on the Lessor by the  charterers  of such  other  vessel in
        connection with such arrest, detention, attachment, levy, writ or libel.

29.3    Release from arrest: Lessee's vessels

        If the Ship shall at any time have a writ or libel  filed  against it or
        be arrested,  attached or levied upon  pursuant to any legal  process or
        purported legal process or be detained in exercise or purported exercise
        of any lien or claim of whatsoever  nature in each such case arising out
        of the use or  operation of any other vessel for the time being owned by
        the  Lessor or any  other  company  in the  Lessor  Group and  leased or
        chartered by it otherwise  than to the Lessee and should the  charterers
        of such other vessel (being in that situation  under  obligations to the
        Lessor or such other  company in the Lessor  Group  equivalent  to those
        assumed  by the Lessee  under  clause  29.2)  fail to fulfil  their said
        obligations,  provided  that the Lessee  shall  first  have given  prior
        notice thereof to the Lessor and, to the extent  practicable,  consulted
        with the  Lessor or such other  company  in the  Lessor  Group as far in
        advance as is reasonable in all the  circumstances,  the Lessee shall be
        entitled  to act as agent for the  Lessor or such  other  company in the
        Lessor Group to procure release of the Ship or such other vessel (as the
        case may require) from such arrest, detention, attachment or levy or, as
        the case may be, the discharge of the writ or libel and the discharge of
        all  liabilities in connection with such process,  claim,  lien or other
        action but shall be  entitled to be  indemnified  by the Lessor and such
        other  company  in the Lessor  Group  against  all  losses and  expenses
        reasonably and properly so incurred by it.

30      Assignment and sale of Ship

30.1    Assignment by Lessee

        The  Lessee  may not  with  the  exception  of an  assignment  by way of
        security in favour of the First Security  Agent and the Second  Security
        Agent  assign or transfer  any of its rights or  obligations  under this
        Lease or any of the other  Lease  Documents  without  the prior  written
        consent of the Lessor,  but the Lessor shall not  unreasonably  withhold
        its consent in the circumstances of;

30.1.1  any assignment or transfer or novation to a company which is part of the
        Lessee Group where:

        (a)     the Lessee  Parent  Guarantee,  the  Standby  Documents  and any
                Additional Security Documents and the respective  obligations of
                the  Lessee  Parent,  the LC Bank  and any  Additional  Security
                Providers thereunder remain in full force and effect;

        (b)     the  replacement of the Lessee will not give rise to a breach of
                the provisions of clause 13.2.4;

        (c)     the  liabilities  and obligations of the Lessee under this Lease
                will not be increased following such transfer;

        (d)     the  rights of the  Lessor  under this Lease will not be reduced
                and the  liabilities  and  obligations  of the Lessor under this
                Lease  will  not  be  increased  in  each  case  following  such
                transfer; and

        (e)     the Lessor has received a legal  opinion from a lawyer chosen by
                the  Lessor   qualified   and   practising  in  the  country  of
                incorporation of the relevant assignee or transferee which is no
                worse  in form  and  substance  than  the  legal  opinion  to be
                provided  in  favour  of the  Lessor in  respect  of the  Lessee
                pursuant to clause 4.1 and Schedule 1.

30.2    Assignment by the Lessor

        The Lessor may not,  save as provided  below,  assign or transfer any of
        its rights or obligations  under this Lease or any of the other Relevant
        Documents  without the prior written consent of the Lessee which consent
        may not unreasonably be withheld.  Notwithstanding  the above provision,
        the Lessor  shall be at liberty to  transfer  (by way of  assignment  or
        novation) its rights,  benefits or obligations  under this Lease and any
        of the other  Relevant  Documents  to any leasing  company  chosen by it
        within the Lessor Group which is resident in the United  Kingdom for the
        purpose of the charge to Corporation Tax on the basis that:

30.2.1  subject to the First Security  Agent,  the Second Security Agent and the
        Lessee complying with their  obligations  under, and on the basis of the
        provisions  of clause 8.6 of the  Proceeds  Deed,  ownership of the Ship
        shall be  transferred  to such company at the same time and such company
        shall execute a replacement Lessor Mortgage and Lessor Proceeds Accounts
        Assignment in accordance with clause 8.6 of the Proceeds Deed;

30.2.2  any costs, charges or expenses including stamp duties payable in respect
        of any transfer shall be for the Lessor's account;

30.2.3  notwithstanding  any other  provision  of this Lease or any of the other
        Lease Documents all amounts payable or receivable by the Lessee or other
        Relevant Parties under this Lease and the other Relevant Documents shall
        be calculated as if no such transfer had taken place; and

30.2.4  the Lessor  Parent  shall comply with its  obligations  under the Lessor
        Support Letters in respect of such transfer.

30.3    Sale of Ship

        During the Lease Period the Lessor shall not sell,  transfer,  assign or
        otherwise  dispose of the legal title to, or beneficial  interest in the
        Ship,  or  agree  to do  so,  save  as  expressly  contemplated  by  the
        provisions  of this Lease,  the  Proceeds  Deed and the Quiet  Enjoyment
        Letter.

31      Increased costs, funding problems and illegality

31.1    Increased costs

        If any law, regulation or regulatory requirement or any judgment,  order
        or direction of any court, tribunal or authority taking effect after the
        date of this Lease which is binding upon the Lessor in the  jurisdiction
        in which it is formed or in which any action is required to be performed
        by it for the  purposes of this Lease of any  monetary  agency,  central
        bank or competent governmental or other authority shall:

31.1.1  subject  the  Lessor to Taxes or change  the  basis of  Taxation  of the
        Lessor with respect to any payment  under any of the Relevant  Documents
        (other than Taxes or Taxation which are the subject of an indemnity from
        the Lessee to the Lessor  under clause 10 or would be so subject but for
        the provisions of clauses 10.6 and 10.8); or

31.1.2  impose,  modify or deem  applicable any reserve  requirements or require
        the making of any special  deposits  against or in respect of any assets
        or liabilities of, deposits with or for the account of, or loans by, the
        Lessor or its holding company; or

31.1.3  impose on the Lessor or its  holding  company any other  condition  with
        respect to any of the Relevant Documents or its obligations under any of
        the Transaction Documents,

        and, as a result of any of the foregoing,  the cost to the Lessor or its
        holding  company of  funding,  financing  or  re-financing,  directly or
        indirectly,  its  purchase  of the Ship or of owning the Ship or leasing
        the Ship to the  Lessee  under  this  Lease is  increased  or the amount
        payable  or the  effective  return to the  Lessor  under  this  Lease is
        reduced or the Lessor or its holding company makes a payment or foregoes
        a return on or calculated by reference to any amount payable to it under
        this Lease (other than as provided in clause  31.1.1),  then and in each
        such case the Lessor shall as soon as  practicable  after becoming aware
        of the same  notify  the  Lessee of the  circumstances  thereof  and the
        Lessee  shall pay to the Lessor on demand  the  amount  which the Lessor
        specifies (in a certificate  setting forth the basis of the  computation
        of such  amount) is  required  to  compensate  the Lessor or its holding
        company for such increased  cost,  reduced  return,  payment or foregone
        return.

        Any demand  under clause 31.1 may be made at any time whether or not the
        Lease Period shall have terminated or expired.

        For the purpose of this clause 31.1 "holding  company" means the company
        or entity (if any)  within  the  consolidated  supervision  of which the
        Lessor is included.

31.2    Funding problems

        If the Lessor  notifies  the Lessee that  adequate and fair means do not
        exist for  determining  the Default  Rate or for  determining  LIBOR (as
        defined in the  Financial  Schedule)  then the Lessor  shall give notice
        thereof to the Lessee and the Lessor and the Lessee shall meet  together
        to discuss the matter in good faith and,  unless within thirty (30) days
        of the  giving of such  notice the  Lessor  and the  Lessee  arrive,  by
        negotiation in good faith, at an alternative basis reasonably acceptable
        to the  Lessor and the Lessee  for  continuing  the  leasing of the Ship
        hereunder and determining the Default Rate or LIBOR (and any alternative
        basis agreed in writing shall be  retroactive  to and effective from the
        commencement  of the relevant period and shall continue until the Lessor
        determines that  circumstances  are such that such alternative basis may
        cease to be  effective)  the Lessee shall  indemnify the Lessor from and
        against  any  liability,  loss or expense  suffered  or  incurred by the
        Lessor during the relevant  period as a result of the  circumstances  so
        notified by the Lessor to the Lessee.

31.3    Illegality

        If any law, regulation or regulatory requirement or any judgment,  order
        or direction of any court, tribunal or authority binding upon the Lessor
        in the  jurisdiction  in which it is formed  or in which  any  action is
        required to be  performed  by it for the purposes of any of the Relevant
        Documents  (whether  or not in  force  before  the  date of this  Lease)
        renders it unlawful  for the Lessor to continue to lease the Ship to the
        Lessee under this Lease, the Lessor shall promptly inform the Lessee and
        the  Lessor  shall be  entitled  by  written  notice  to the  Lessee  to
        terminate the Lease Period, the termination of the Lease Period to occur
        either (a) forthwith or (b) on a future specified date not being earlier
        than the date upon which it becomes  unlawful for the Lessor to continue
        to lease the Ship to the Lessee under this Lease.

        Such  termination  shall be deemed to be a voluntary  termination of the
        Lease Period in accordance  with clause 3.3  (notwithstanding  that such
        termination shall not have occurred on a Primary Rental Date or that the
        Lessor shall not have received thirty (30) days' notice thereof) and the
        provisions of clauses 3.3 to 3.6 shall apply thereto.

31.4    Mitigation

        If circumstances  arise which would, or would upon the giving of notice,
        result in:

31.4.1  the Lessee being  required to make a payment to the Lessor to compensate
        the Lessor or its holding company for a liability to Taxes, increased or
        additional cost, reduction, payment, foregone return or loss pursuant to
        clause 31.1;

31.4.2  the Lessee  being  required to make an  increased  payment to the Lessor
        pursuant to clause 31.2;

31.4.3  the  provision of  additional  security  and/or the  termination  of the
        leasing of the Ship pursuant to clauses 25.3, 25.4, 25.5 and 31.3; or

31.4.4  the  mandatory  prepayment  of the  amounts  referred  to in clause 27.1
        pursuant to clauses 26.2.3 or 26.2.4,

        then, without in any way limiting,  reducing or otherwise qualifying the
        obligations  of the Lessee under  clauses 25, 26 and this clause 31, the
        Lessor  shall,  at the  cost  of the  Lessee,  endeavour  to  take  such
        reasonable  steps  (and/or,  in the case of  clause  31.1 and  where the
        increased or additional  cost,  reduction,  payment,  foregone return or
        loss is that of its  holding  company,  endeavour  to  procure  that its
        holding company takes such  reasonable  steps) as may be open to it (or,
        as the case may be, its  holding  company)  to  mitigate  or remove such
        circumstances  and shall consult with the Lessee in connection with such
        mitigation  arrangements.  The Lessee  acknowledges that nothing in this
        clause  shall  oblige the Lessor (or its  holding  company)  to take any
        steps which might (in the opinion of the Lessor) be  prejudicial  to the
        Lessor (or,  as the case may be, its holding  company) or be in conflict
        with  the  Lessor's  (or,  as the case may be,  its  holding  company's)
        general banking  policies or involve the Lessor (or, as the case may be,
        its holding company) in expense or an increased administrative burden.

32      Refinancings

32.1    Refinancing by Lessee

32.1.1  Where the First  Bank Loan (as  defined  in the  Proceeds  Deed) and the
        Second Bank Loan (as defined in the  Proceeds  Deed) have been repaid in
        full (or will be repaid in full out of the  proceeds of any  refinancing
        contemplated  by this clause 32), the Lessee shall be entitled,  subject
        to clause 32.2,  to refinance its interest in the Ship and to assign the
        Lessor Mortgage to the relevant  refinancing banks or any security agent
        acting on their behalf and to grant other first and/or  second  priority
        security of the kind required under or in connection with the First Bank
        Loan and the  Second  Bank Loan and more  generally  referred  to in the
        Proceeds Deed.

32.1.2  In connection with any  refinancing  consented to pursuant to clause 32,
        the Lessor  shall  enter into such  documents  as the other party or the
        Lessee may reasonably require to amend this Lease and the other Relevant
        Documents to reflect the new financing structure.

32.2    Conditions

        The  agreement  of the Lessor to any  refinancing  referred to in clause
        32.1.1 shall be subject to the following conditions:

32.2.1  no Relevant Event shall have occurred and be continuing;

32.2.2  the Lessor shall be satisfied that the proceeds of the  refinancing  are
        sufficient to repay the First Bank Loan and the Second Bank Loan in full
        or, if not,  that the Lessee (or any other  person  obliged to repay the
        First Bank Loan and the Second  Bank Loan) has  sufficient  other  funds
        available to repay the First Bank Loan and the Second Bank Loan in full;

32.2.3  the Lessor shall be reasonably  satisfied  that the Third Priority Three
        Party  Deed  shall,  following  the  refinancing,  continue  to  provide
        security  for the  Lessee's  obligations  under this Lease in a form and
        with effect  substantively  equivalent to that  negotiated and agreed in
        relation  to the First Bank Loan and the Second Bank Loan as at the date
        of this Lease;

32.2.4  the Standby  Documents  shall remain in full force and effect  following
        the refinancing  with such amendments to such Standby  Documents  having
        been made as may, with the approval,  or at the request,  of the Lessor,
        be required having regard to the terms of the relevant refinancing:

32.2.5  the refinancing banks or the security agent acting on their behalf shall
        adhere to the provisions of the Proceeds Deed on terms acceptable to the
        Lessor and such  changes as may be  required,  and as may be approved by
        the Lessor,  shall be made to the terms of the Proceeds  Deed to reflect
        such refinancing;

32.2.6  the refinancing shall be on terms whereby:

        (a)     the  principal  amount  shall be no greater than one hundred and
                forty seven million Dollars ($147,000,000);

        (b)     the principal amount shall amortise on a straight-line  basis to
                zero over ten (10) years; or

        (c)     the  refinancing  shall be on terms  whereby the proceeds of the
                refinancing (or part thereof) will be paid direct to the account
                of the First Security Agent to repay the First Bank Loan and/or,
                as the case  may be,  the  Second  Security  Agent to repay  the
                Second Bank Loan in full.

        The amounts  referred to in sub-clauses (a) and (b) assume that the Ship
        and the Other Ships shall all be refinanced at the same time. If in fact
        the Ship and the  Other  Ships are not all  refinanced  at the same time
        then the Lessee shall as an  additional  condition to the consent of the
        Lessor  to any  refinancing,  be  required  to agree  with the  Lessor a
        revised Dollar amount for the purpose of sub-clause (a) above; and

32.2.7  the Lessor shall be entitled to receive such  evidence and  documents of
        the kind  referred  to in Schedule 1 as may in the  Lessor's  opinion be
        appropriate  and such  favourable  legal opinions as the Lessor shall in
        its reasonable discretion require.

33      Miscellaneous

33.1    Entire agreement

        This Lease and the other Lease  Documents  contain the entire  agreement
        between  the Lessor and the Lessee  relating  to the leasing of the Ship
        and the terms and conditions of this Lease and the other Lease Documents
        shall not be varied  otherwise  than by an instrument in writing of even
        date  herewith  or  subsequent  hereto  executed  by or on behalf of the
        Lessor and the Lessee  and shall  supersede  all  previous  term  sheets
        relating thereto.

33.2    Waivers

        No failure or delay on the part of the Lessor in  exercising  any right,
        power or remedy  under  this Lease or any of the other  Lease  Documents
        shall  operate  as a waiver  thereof  nor  shall any  single or  partial
        exercise by the Lessor of any such right,  power or remedy  preclude any
        other or further  exercise  thereof or the  exercise of any other right,
        power or remedy.

33.3    Remedies cumulative

        The remedies  provided in this Lease or any of the other Lease Documents
        are cumulative and are not exclusive of any remedies provided by law.

33.4    Time of the essence

        Subject to the periods of grace  referred to in clause 26, time shall be
        of  the  essence  as  regards  the  performance  by  the  Lessee  of its
        obligations under this Lease and the other Lease Documents.

33.5    General average

        All  rights  and  liabilities  in  respect of the Ship by way of general
        average shall be for the account of the Lessee.

33.6    Partial illegality

        If any  term  or  provision  of this  Lease  or any of the  other  Lease
        Documents  or the  application  thereof to any  person or  circumstances
        shall to any extent be invalid or  unenforceable,  the remainder of this
        Lease and the other  Lease  Documents  and  application  of such term or
        provision to persons or  circumstances  (other than those as to which it
        is already invalid or  unenforceable)  shall not be affected thereby and
        each term and  provision  of this  Lease and the other  Lease  Documents
        shall be valid and be  enforceable  to the fullest  extent  permitted by
        law.

33.7    Set-off

        The  Lessee  authorises  the  Lessor  without  prejudice  to  any of the
        Lessor's  rights of set-off at law, in equity or otherwise,  at any time
        that a Relevant  Event has occurred and is continuing or when  otherwise
        permitted  under this Lease or the other  Lease  Documents  and  without
        notice  to the  Lessee  to set  off or  withhold  from  any  sum or sums
        expressed  in this  Lease  or any of the  other  Lease  Documents  to be
        payable to the  Lessee by the  Lessor any amount due and  payable to the
        Lessor  from the  Lessee  under  this  Lease or any of the  other  Lease
        Documents.  For any such  purpose the Lessor is  authorised  to purchase
        with the sums which  would but for this clause 33.7 be so payable to the
        Lessee, such other currencies as may be necessary to effect such set off
        or  withholding.  The Lessor  shall not be obliged to exercise any right
        given to it by this  clause  33.7.  The Lessor  shall  notify the Lessee
        forthwith  upon the  exercise  or  purported  exercise  of any  right of
        set-off or withholding.

33.8    Further assurance

        The Lessee undertakes that it will at its expense execute, sign, perfect
        and do any and every such further assurance,  document,  act or thing as
        in the reasonable opinion of the Lessor may be necessary or desirable to
        carry out the purpose of this Lease or any of the other Lease  Documents
        or the Standby  Documents  or protect or enforce any right of the Lessor
        hereunder or thereunder or the title of the Lessor in the Ship.

33.9    Counterparts

        This  Lease may be  entered  into the form of two or more  counterparts,
        each  executed by one of the  parties,  and,  provided  both the parties
        shall so enter into this Lease, each of the executed counterparts,  when
        duly  exchanged  or  delivered,  shall be deemed to be an original  but,
        taken together, they shall constitute one instrument.

33.10   Confidentiality

        At all times during the Lease Period,  each of the parties  hereto shall
        keep  confidential  and shall not,  without the prior written consent of
        the other party, issue any press release in relation to the transactions
        evidenced by this Lease and the other Relevant Documents, or disclose to
        any other person, the business, financial or other information contained
        in or  supplied  in  connection  with this  Lease or any other  Relevant
        Document  and the  transactions  contemplated  hereby or  thereby or any
        other agreement entered into after the date hereof by the Lessor and any
        Relevant  Party or in connection  with this Lease or any other  Relevant
        Document,  or  release  copies  or  drafts  of any such  document  which
        disclose or reveal the identity of the parties (or any of them) provided
        that (a) the Lessor will not unreasonably  withhold or delay its consent
        to any  proposed  press  release  and (b) the  parties  hereto  shall be
        entitled, without any such consent, to disclose the same:

33.10.1 in connection with any proceedings  arising out of or in connection with
        this Lease or any of the other Relevant Documents; or

33.10.2 if  required to do so by an order of a court of  competent  jurisdiction
        whether in  pursuance  of any  procedure  for  discovery of documents or
        otherwise; or

33.10.3 pursuant to any law or regulation having the force of law; or

33.10.4 to any fiscal, monetary, tax, governmental or other competent authority;
        or

33.10.5 to the  auditors,  legal,  insurance or other  professional  advisors or
        insurers or underwriters of any member of either the Lessee Group or the
        Lessor Group; or

33.10.6 if required to do so in order to obtain any permits, consents,  licences
        which any Relevant Party is required to obtain  pursuant to the Relevant
        Documents; or

33.10.7 if any of the same is or shall become publicly known otherwise than as a
        result of a breach by such party of this clause 33.10; or

33.10.8 in any manner contemplated by any of the Relevant Documents; or

33.10.9 in the case of the Lessee, to the Lessee Group and the Related Companies
        and in the case of the Lessor, to the Lessor Group provided that in each
        case the Lessee or the Lessor shall  procure that the party to whom such
        disclosure  is made shall  comply with the  requirements  of this clause
        33.10; or

33.10.10 to the First  Security  Agent or any other party to the First Bank Loan
        or to the transactions  arising in respect of the First Bank Loan or, as
        the case may be, to the Second  Security Agent or any other party to the
        Second Bank Loan or to the transactions arising in respect of the Second
        Bank Loan; or

33.10.11 in the case of the  Lessee,  to any  persons who may be involved in the
        refinancing arrangements contemplated by clause 32.

34      Governing law and jurisdiction

34.1    Law

        This Lease is  governed by and shall be  construed  in  accordance  with
        English law.

34.2    Submission to jurisdiction

        The Lessee agrees, for the benefit of the Lessor,  that any legal action
        or proceedings  in connection  with this Lease or any of the other Lease
        Documents  against the Lessee or any of its assets may be brought in the
        English courts.  The Lessee irrevocably and  unconditionally  submits to
        the  jurisdiction  of such courts and  irrevocably  and  unconditionally
        designates,  appoints  and  empowers  Golar  Management  (UK) Limited at
        present of 30 Marsh  Wall,  London E14 9TP to receive  for it and on its
        behalf  service of process  issued out of the English courts in any such
        legal action or proceedings.  The submission to such jurisdiction  shall
        not (and shall not be  construed so as to) limit the right of the Lessor
        to take  proceedings  against the Lessee in any other court of competent
        jurisdiction,  nor shall the  taking of  proceedings  in any one or more
        jurisdictions   preclude  the  taking  of   proceedings   in  any  other
        jurisdiction,  whether  concurrently  or not. The parties  further agree
        that only the courts of England  and not those of any other  State shall
        have  jurisdiction  to  determine  any claim  which the  Lessee may have
        against the Lessor  arising out of or in  connection  with this Lease or
        any of the other Lease Documents.

IN WITNESS  whereof the parties  hereto have entered into this Lease the day and
year first above written.

<PAGE>

                                   Schedule 1

                         List of documents and evidence

1       A copy certified by an officer of the Lessee or the Relevant Party to be
        a true,  complete and up-to-date  copy, of the Articles of Incorporation
        and By-Laws of the Lessee and the  constitutional  documents  of each of
        the other Relevant Parties.

2       A copy,  certified  by a Director or the  Secretary of the Lessee or the
        relevant  company  to be a true  copy,  and as being in full  force  and
        effect and not  amended or  rescinded,  of  resolutions  of the board of
        directors and, if required,  of meetings of the  shareholders of each of
        the Lessee and the other Relevant Parties:

        (a)     approving the transactions  contemplated by such of the Relevant
                Documents to which the relevant company is a party;

        (b)     authorising  a person or  persons  to  execute  on behalf of the
                relevant company such of the Relevant Documents to which it is a
                party and any notices or other  documents  to be given  pursuant
                thereto.

3       A copy certified by a Director or the Secretary of the relevant  company
        to be a true copy, and as being in full force and effect and not revoked
        or withdrawn,  of any power of attorney  issued by the relevant  company
        pursuant to the said resolutions.

4       A list,  certified as true, complete and up to date by a Director or the
        Secretary of each of the Relevant Parties of its directors and officers.

5       Evidence that all governmental and other licences, approvals,  consents,
        registrations and filings necessary for any matter or thing contemplated
        by  the   Relevant   Documents   and   for   the   legality,   validity,
        enforceability, admissibility in evidence and effectiveness thereof have
        been obtained or effected on an unconditional  basis or, if conditional,
        on a basis  approved  by the Lessor  (in its  absolute  discretion)  and
        remain in full force and effect  (or,  in the case of  effecting  of any
        registrations and filings, that arrangements  satisfactory to the Lessor
        have been made for the effecting of the same within any applicable  time
        limit).

6       A copy, certified as a true and complete copy and as being in full force
        and effect and not  amended or  rescinded,  of the  Sub-Lease  in a form
        previously approved by the Lessor.

7       A copy, certified as a true and complete copy and as being in full force
        and effect and not amended or rescinded,  of the Time Charter (including
        the Time  Charter  Novation  Agreement  and any  documents  executed  in
        connection  with the Time  Charter and which amend the terms of the Time
        Charter).

8       Copies of all classification certificates relating to the Ship including
        (without limitation) the Certificate of Financial Responsibility.

9       An original of the Letter of Credit duly executed by the LC Bank.

10      A copy of the  signature  book,  power of attorney or other  evidence of
        signing  authority  satisfactory  to the Lessor of the LC Bank  together
        with  evidence  reasonably  satisfactory  to the  Lessor  as to the  due
        approval and  authorisation  for execution,  delivery and performance by
        the LC Bank of, and the validity and enforceability against the LC Bank,
        of the Letter of Credit.

11      The Lessee Parent Guarantee duly executed by the Lessee Parent.

12      The Proceeds  Deed duly  executed by the parties  thereto other than the
        Lessor.

13      The Third  Priority Three Party Deed duly executed by the Lessee and the
        Sub-Lessee respectively.

14      A copy of the  signature  book,  power of attorney or other  evidence of
        signing authority satisfactory to the Lessor of the First Security Agent
        and  the  Second  Security  Agent  together  with  evidence   reasonably
        satisfactory to the Lessor as to the due approval and  authorisation for
        execution,  delivery and performance by the First Security Agent and the
        Second Security Agent of the Proceeds Deed.

15      The Manager's Undertaking duly executed by the Manager.

16      A letter  from each  Relevant  Party's  agent for  receipt of service of
        proceedings  referred  to in  any  of the  other  Transaction  Documents
        accepting its appointment.

17      Opinions of Holland & Knight LLP,  Conyers,  Dill & Pearman and Hunter &
        Hunter  special  legal  advisers to the Lessor on matters of the laws of
        the Republic of Liberia, Bermuda and the Cayman Islands respectively.

18      The Lessor is satisfied  that at the time of Delivery the Lessee will be
        in compliance with the provisions of clause 13.2.4.

19      Equivalent documents to those referred to in paragraphs 1, 2, 3, 4 and 5
        in relation to the Standby Purchaser.

20      Each of the  Standby  Documents  duly  executed  by each of the  parties
        thereto other than the Lessor.

21      A copy, certified as a true and complete copy and as being in full force
        and  effect  and not  amended  or  rescinded,  of the DOC  issued to the
        Operator and the SMC for the Ship.

22      Evidence that the Ship:

        (a)     maintains the  Classification  with the  Classification  Society
                free   of   all   requirements   and   recommendations   of  the
                Classification  Society  that  are  overdue  or  have  not  been
                complied with in accordance with their relevant terms; and

        (b)     is insured in accordance  with the  provisions of this Lease and
                all requirements of this Lease in respect of such insurance have
                been complied with.

23      The  Protocol of Delivery and  Acceptance  duly signed by the Lessor and
        the Lessee.

24      An insurance  report from Marsh Limited as to the  acceptability  of the
        insurances referred to in paragraph 1(b) above.

25      Evidence  that (a) the  Lessee is a wholly  owned  subsidiary  of Gotaas
        Larsen,  (b) Gotaas  Larsen is a wholly owned  subsidiary  of the Lessee
        Parent and (c) not less than twenty five percent (25%) of the issued and
        outstanding   share   capital  of  the  Lessee  Parent  is  directly  or
        indirectly, legally and beneficially owned by the Relevant Shareholder.

26      Any such further opinions as may be reasonably required by the Lessor.

27      Evidence that the Lessor's  obligations  under a guarantee dated 4 April
        2003 in favour of the Time Charterer have been irrevocably discharged.

<PAGE>

                                   Schedule 2

                         Form of Delivery Request Notice

To:      Golar Gimi (Bermuda) Limited
         c/o  Sovereign House
         298 Deansgate
         Manchester
         M3 4HH
                                                                      April 2003

                           Lease dated [o] April 2003
                             relating to m.v. "GIMI"

We refer to the above  Lease and  hereby  give you  notice  that we wish to take
delivery of the Ship on [o].

We confirm that:

        (a)     no event or  circumstance  has occurred and is continuing  which
                constitutes a Relevant  Event, a Relevant Bank Event, a Relevant
                Bank Change of Law Event or a Relevant Bank Illegality Event;

        (b)     the representations and warranties  contained in clauses 2.1 and
                2.2 of the Lease (and so that  representation  and  warranty  in
                clause  2.1.7  shall for this  purpose  refer to the then latest
                audited  financial  statements  delivered  to the  Lessor  under
                clause  11.1.4) and in clauses 4.1 and 4.2 of the Lessee  Parent
                Guarantee (and so that the representation and warranty in clause
                4.1.6  thereof  shall for this purpose  refer to the then latest
                audited  financial  statements  delivered  to the  Lessor  under
                clause 5.1.4 thereof) are true and correct at the date hereof as
                if made with respect to the facts and circumstances  existing at
                such date; and

        (c)     the  leasing  of the Ship in  accordance  with the Lease will be
                within our  corporate  powers,  has been validly  authorised  by
                appropriate corporate action and will not cause any limit on our
                borrowings (whether imposed by statute, regulation, agreement or
                otherwise) to be exceeded.

Words and  expressions  defined in the Lease shall have the same  meanings  when
used herein.

                              For and on behalf of
                         GOLAR GAS HOLDING COMPANY, INC.

<PAGE>

                                   Schedule 3

             Form of Protocol of Delivery and Acceptance under Lease

                                   m.v. "GIMI"

It is  hereby  certified  that,  pursuant  to a lease  dated o April  2003  (the
"Lease") and made between (1) Golar Gimi (Bermuda)  Limited (whose name is to be
changed to Sovereign  Gimi  Limited)  (the  "Lessor")  and (2) Golar Gas Holding
Company,  Inc.  (the  "Lessee")  in respect  of the m.v.  "GIMI"  (the  "Ship"),
registered under British flag with and on the basis of the confirmation given by
the Lessee below the Ship was delivered by the Lessor to the Lessee and accepted
by the Lessee  from the  Lessor at [o] hours  [GMT] on [o] April 2003 at [insert
location] under, and in accordance with the terms and conditions of, the Lease.

The Lessee hereby confirms that as at the date hereof:

        (a)     no Relevant Event has occurred and is continuing; and

        (b)     the  representations  and  warranties set out in clauses 2.1 and
                2.2 of the Lease and  clauses  4.1 and 4.2 of the Lessee  Parent
                Guarantee  are true and correct as if each was made with respect
                to the facts and circumstances existing at such time.

Dated:  April 2003

                              For and on behalf of
                     Golar Gimi (Bermuda) Limited as Lessor

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

                              For and on behalf of
                    Golar Gas Holding Company, Inc. as Lessee

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

<PAGE>

                                   SCHEDULE 4

                        FINANCIAL SCHEDULE - (Golar Gimi)

1       Definitions and Interpretations

1.1     Definitions

        In this  Schedule  words and  expressions  defined in clause 1.2 of this
        Lease  shall have the  meanings  ascribed to them in such clause and the
        following  expressions  shall have the  following  meanings when used in
        this Schedule and this Lease:

        "Accountancy  Rental Earnings" means  "accountancy  rental earnings" for
        the  purposes  of  Schedule 12 to the Finance Act 1997 in respect of the
        leasing of the Ship under this Lease;

        "Accountancy  Rental Excess" means  "accountancy  rental excess" for the
        purposes  of  Schedule  12 to the  Finance  Act 1997 in  respect  of the
        leasing of the Ship under this Lease;

        "Additional  Security  Table" means any Security  Table  prepared by the
        Lessor pursuant to paragraph 9.2;

        "Adjustment Date" means, for any Adjustment Period, the last day of such
        Adjustment Period;

        "Adjustment Period" means:

        (a)     the period commencing on the Delivery Date and ending on 14 July
                2003;

        (b)     thereafter and until the Tax Payment Date immediately  preceding
                the Primary Period End Date, each successive  period  commencing
                on the last day of the immediately  preceding  Adjustment Period
                and ending on the next succeeding Tax Payment Date;

        (c)     thereafter  the  period  commencing  on  the  Tax  Payment  Date
                immediately  preceding the Primary Period End Date and ending on
                the Primary Period End Date;

        (d)     thereafter the period  commencing on the Primary Period End Date
                and ending on the immediately succeeding Tax Payment Date; and

        (e)     thereafter each successive  period commencing on the last day of
                the immediately  preceding  Adjustment  Period and ending on the
                next succeeding Tax Payment Date;

        PROVIDED THAT:

        (i)     if any Adjustment  Period would  otherwise end on a day which is
                not a Banking  Day then the last day of that  Adjustment  Period
                shall (taking into account any substitution  referred to in (ii)
                and  (iii)  below) be the  immediately  succeeding  Banking  Day
                unless such  Banking Day falls in the next  calendar  month,  in
                which case the last day of that Adjustment  Period should be the
                immediately preceding Banking Day;

        (ii)    if the  Termination  Payment  Date  falls  otherwise  than on an
                Adjustment  Date the Adjustment  Period which would otherwise be
                current  on that date  shall be  treated  as coming to an end on
                that date and an Adjustment Period shall be treated as beginning
                on that date and ending on the next succeeding Tax Payment Date;

       (iii)  the Adjustment Period which would otherwise be current on the
              Final Date in relation to any Cash Flow shall be treated as having
              come to an end on that date and the period ending on such date
              shall be the last Adjustment Period so far as that Cash Flow is
              concerned;

        (iv)    if the  Lessor  pays  or  receives  any  amount  which  is to be
                reflected  in a Cash  Flow on a day  which  does not fall on the
                first day of an  Adjustment  Period  (the "Basis  Period"),  the
                period (the  "Remaining  Period") from and including the date on
                which  the  Lessor  pays or  receives  any  such  amount  to and
                including  the last day of the then  current  Basis Period shall
                constitute  an  Adjustment  Period for that  element only of the
                Notional  Capital  Outstanding and the rate of interest  applied
                during the Basis  Period  shall be the rate  applicable  to such
                part  of  the  Notional  Capital  Outstanding  as is  funded  or
                invested for the Basis  Period and the rate of interest  applied
                during the Remaining Period shall be the rate applicable to such
                part  of  the  Notional  Capital  Outstanding  as is  funded  or
                invested for the Remaining Period;

        (v)     interest  calculated by reference to an Adjustment  Period shall
                be calculated from and including the first day of such period to
                but excluding the last day thereof;

        "After-Tax  Interest Rate" means, at any relevant time, a rate per annum
        calculated in accordance with the following formula:

                           ATR = ((PTR x [1-TR]) + PR)

        Where:

        ATR     is the After-Tax Interest Rate (expressed as a decimal);

        PTR     is the Assumed Rate  (expressed  as a decimal) as at the Primary
                Period End Date;

        TR      is the Corporation Tax Applicable Rate for the Accounting Period
                of the  Lessor  in  which  the  above  Applicable  Rate is to be
                applied (expressed as a decimal); and

        PR      is the Percentage Return (expressed as a decimal);

        "Applicable  Cash Flow"  means the Initial  Cash Flow,  or any Cash Flow
        prepared by the Lessor pursuant to paragraph 4;

        "Applicable  Rate" means, in relation to any Adjustment  Period or other
        relevant period:

        (a)     where  applied  to  a  negative   balance  of  Notional  Capital
                Outstanding,  the  aggregate of LIBOR and the Reserve Asset Rate
                on the first day of that period, and

        (b)     where  applied  to  a  positive   balance  of  Notional  Capital
                Outstanding, LIBID on the first day of that period,

        "Applicable  Security  Table"  means the Initial  Security  Table or any
        Security Table prepared by the Lessor pursuant to paragraph 9.3;

        "Applicable  Tax Report"  means the Initial Tax Report or any Tax Report
        prepared by the Lessor pursuant to paragraph 4.1;

        "Arrangement  Fee"  means the fee of an amount  equal to zero point five
        per cent (0.5%) of the Ship Cost  payable by the Lessor to the  Arranger
        in  accordance  with the letter of  today's  date from the Lessor to the
        Arranger;

        "Assumed Rate" means, subject to paragraph 6.1.4(d),  in relation to any
        Adjustment Period or other relevant period:

        (a)     in  respect of  Notional  Capital  Outstanding  where a negative
                amount the rate of five point  three five per cent  (5.35%)  per
                annum,  which Assumed Rate shall include an amount in respect of
                the Reserve Asset Rate equal to zero per cent (0%); or

        (b)     in  respect of  Notional  Capital  Outstanding  where a positive
                amount the rate of five point two two five per cent (5.225%) per
                annum;

        "Assumptions"  means  the  Variable  Assumptions  and  the  Non-Variable
        Assumptions  set out in Appendix 1 to this  Schedule,  all of which were
        taken into account in preparing the Initial Cash Flow;

        "Base  Currency"  has  the  meaning  attributed  to  that  term  in  the
        definition of "Spot Exchange Rate";

        "Broken Funding Costs" means an amount equal to the loss (if any) to the
        Lessor arising by virtue of any payment being made or received hereunder
        otherwise  than  on the  last  day of an  Adjustment  Period  and in the
        amounts specified herein, the amount of such loss being deemed to be the
        amount  (if any) by which  (i) the cost to the  Lessor of  funding  that
        payment in the London  Inter-Bank  Market at LIBID  determined as at the
        date on which such payment is made or received for the unexpired portion
        of that  Adjustment  Period  exceeds  (ii) the amount of interest  which
        would have  accrued on the amount of such payment  during the  unexpired
        portion of that  Adjustment  Period at the Applicable Rate as determined
        at the commencement of such Adjustment Period;

        "Broken Funding Gains" means an amount equal to the gain (if any) to the
        Lessor arising by virtue of any payment being made or received hereunder
        otherwise  than  on the  last  day of an  Adjustment  Period  and in the
        amounts specified herein, the amount of such gain being deemed to be the
        amount (if any) by which (i) the  amount of  interest  which  would have
        accrued on the amount of such payment  during the  unexpired  portion of
        that  Adjustment  Period at the  Applicable  Rate as  determined  at the
        commencement  of such  Adjustment  Period  exceeds  (ii) the cost to the
        Lessor of funding that payment in the London  Inter-Bank Market at LIBID
        determined  as at the date on which such payment is made or received for
        the unexpired portion of that Adjustment Period;

        "Capital  Allowances"  means any  allowance  made in  respect of capital
        expenditure  on  machinery or plant under the CAA and/or under any other
        enactment  for the time  being  in force  providing  for the  making  of
        similar  allowances  and/or giving similar relief whether  introduced in
        addition to or as a replacement for the same;

        "Cash Flow" means any cash flow  prepared  for the  purposes  hereof and
        required to be provided by the Lessor to the Lessee hereunder;

        "Consolidated  Group Accounts" means any consolidated group accounts for
        the  purposes  of  Schedule  12 to the  Finance Act 1997 of any group of
        companies of which the Lessor is a member;

        "Corporation  Tax Applicable  Rate" means, in relation to any Accounting
        Period,  the  effective  rate of  Corporation  Tax  which is or would be
        applicable (if there were such profits and ignoring for this purpose any
        special rate  applicable to small  companies and to any special class of
        companies  unless the  company  concerned  is itself  such a company) to
        taxable profits arising in such Accounting Period.  Such rate is to be a
        weighted average  calculated on a daily basis where different  statutory
        rates  apply  for  financial  years  which  are  not  the  same  as such
        Accounting Period. If, at the date at which any calculation hereunder is
        to be made, the  Corporation  Tax  Applicable  Rate is not known because
        Corporation Tax rates are fixed retrospectively,  such calculation shall
        (without  prejudice to any  provision of this Lease  providing  for such
        calculation to be adjusted once the rate of Corporation Tax is known) be
        made on the basis that the rate of  Corporation  Tax last fixed will not
        change  unless  there has been an official  announcement  of a change in
        such rate in which case it shall be made on the basis that the rate will
        change in accordance with such announcement;

        "Cumulative Accountancy Rental Excess" means the "cumulative accountancy
        rental  excess" for the  purposes of Schedule 12 to the Finance Act 1997
        in respect of the leasing of the Ship under this Lease;

        "Cumulative  Normal Rental Excess" means the  "cumulative  normal rental
        excess"  for the  purposes  of  Schedule  12 to the  Finance Act 1997 in
        respect of the leasing of the Ship under this Lease;

        "Determination" means any determination,  calculation,  recalculation or
        quantification  made in accordance  with  paragraph 11 of this Financial
        Schedule and  "Determined",  "Determination"  and  "Determine"  shall be
        construed accordingly;

        "Disposal  Value" means  disposal  value for the purposes of sections 61
        and 62 of the CAA;

        "Economically  Burdensome"  means any change in any Variable  Assumption
        which results or is likely to result in the net present value benefit of
        the Lease to the  Lessee  over the  Primary  Period  anticipated  at the
        Delivery  Date and as notified by the Lessee in writing to the Lessor on
        or before the Delivery Date decreasing by more than thirty five per cent
        (35%);

        "Effective  Date" means the date falling ten (10) Banking Days after the
        date on which a new  Applicable  Cash Flow is prepared and  delivered to
        the Lessee pursuant to paragraph 4.2;

        "Event"  means,  where  paragraph 4.9 applies,  any change in any of the
        Variable Assumptions or the Termination Assumptions;

        "Extra Security  Amounts" means in respect of any Security  Period,  the
        amount,  if any, set out in relation to that Security Period in Appendix
        6,  provided  that in the event that the LC Bank has notified the Lessor
        in accordance  with  paragraph 2(e) of the Letter of Credit that it does
        not  consent  to an  increase  by the  Additional  Amounts  of the Fixed
        Liability  Amount for such  Security  Period,  the amount  appearing  in
        column 5 for such Security Period shall be zero;

        "Final Date" means, in relation to any Cash Flow:

        (a)     except where paragraph 6.4 applies, the first anniversary of the
                date on which the last  payment of  Corporation  Tax is shown by
                such Cash Flow to be paid or  relieved  by the Lessor in respect
                of:

                (i)     the Final  Rental in the case of any Cash Flow  prepared
                        for the purpose of determining the Primary Rentals; or

                (ii)    the  Termination  Sum or  the  amount  of  any  revision
                        thereto  (as  appropriate)  in the case of any Cash Flow
                        prepared for the purpose of determining the same; and

        (b)     where  paragraph  6.4.2  applies at any time  before the Primary
                Period  End  Date,  the  date  on  which  the  last  payment  of
                Corporation  Tax is shown by the  Applicable  Cash Flow prepared
                pursuant thereto to be paid or relieved by the Lessor in respect
                of the  Accounting  Period of the  Lessor in which the  fortieth
                (40th)  anniversary of the Delivery Date falls;  and in relation
                to the Applicable  Cash Flow prepared under  paragraph 6.4.2 for
                the Primary Period End Date, the Accounting Period of the Lessor
                in which the Primary Period End Date falls; and

        (c)     where paragraph 6.4.2 applies on the expiry by effluxion of time
                of the Lease Period on the Primary  Period End Date, the date on
                which  the  last  payment  of  Corporation  Tax is  shown by the
                Applicable  Cash Flow  prepared  pursuant  thereto to be paid or
                relieved  by the Lessor in respect of the  Accounting  Period of
                the Lessor in which the first  anniversary of the Primary Period
                End Date falls;

        "Final Rental" means the Rental referred to in paragraph 2.1.5;

        "First Accounting  Period" has the meaning given in Variable  Assumption
        1.2;

        "First UK  Meeting  Date" has the  meaning  given to it in  Non-Variable
        Assumption 2.16;

        "Further  Termination  Cash  Flow"  means  any  Cash  Flow  produced  in
        accordance with paragraph 7;

        "Generally Accepted  Accounting  Principles" means (i) insofar as any of
        the same are  applicable  to the  Lessor or any  Holding  Company of the
        Lessor, the accounting requirements of the Companies Acts, statements of
        standard  accounting  practice,  financial  reporting  standards and any
        other accounting standards having the like effect of financial reporting
        standards  issued by the Accounting  Standards Board Limited  (including
        abstracts  issued by the  Urgent  Issues  Task  Force of the  Accounting
        Standards  Board Limited) or any other body from time to time prescribed
        by  regulations  pursuant to section 256 of the Companies Act 1985,  and
        (ii) any other  accounting  principle  observance of which by the Lessor
        (or any  Holding  Company of the  Lessor) is required in order to ensure
        that its  accounts  and any  Consolidated  Group  Accounts  comply  with
        applicable  law  and  with  the  regulations  of  any   governmental  or
        regulatory body compliance with which is customary by leasing  companies
        generally (or, in relation to any Holding  Company of the Lessor,  banks
        generally)  or which  the  Auditors  advise  the  Lessor in  writing  is
        necessary to ensure that the Auditors can give an unqualified  report on
        the Lessor's or, as the case may be, any Consolidated Group Accounts;

        "Group  Relief"  shall have the meaning  attributed  thereto by Variable
        Assumption 1.11.2

        "Group Relief  Payment" means any payment taken to have been received by
        the Lessor in accordance with Non-Variable Assumption 2.6;

        "Group Relief  Receipt" means, in respect of each Past Tax Payment Date,
        the positive  amount (if any) shown  opposite that date in the column of
        the Applicable Cash Flow headed "Tax";

        "Group Relief  Recipient"  means the Lessor Agent or any Holding Company
        or Subsidiary of the Lessor Agent being a company which  presently draws
        accounts up to 31st December in each year and which pays Corporation Tax
        on  profits  arising in any  Accounting  Period in  accordance  with the
        Corporation Tax (Instalment Payments) Regulations 1998;

        "Initial Cash Flow" means the Cash Flow  printout  annexed as Appendix 2
        to this Schedule;

        "Initial  Insurance  Premium" means the insurance premium payable by the
        Lessor in respect of the first year of operation of the Ship and as more
        fully described in Variable Assumption 1.38;

        "Initial Security Table" means the Security Table prepared in accordance
        with paragraph 9.1 and annexed as Appendix 5;

        "Initial Tax Report" means the Tax Report  annexed as Appendix 3 to this
        Schedule;

        "Inland Revenue Terms" means the basis on which,  from time to time, the
        Inland  Revenue  charge  interest on underpaid  Corporation  Tax and pay
        interest on overpaid  Corporation  Tax and shall include any penalty due
        as a result of an underpayment of Corporation Tax;

        "Interest  Adjustments"  means the amounts calculated in accordance with
        paragraph 5.1.1 and payable in accordance with paragraph 5.1.2;

        "Irrecoverable VAT" means any amounts paid or payable by or on behalf of
        the Lessor in respect of Value Added Tax under or as contemplated by any
        of the  Transaction  Documents  to the  extent  that  the  Lessor  shall
        determine  that the Lessor,  or if the Lessor is a member of a group for
        Value Added Tax purposes, the representative member, has not or will not
        receive a credit (whether by way of credit or repayment) for that amount
        as "input  tax" (as that  expression  is defined in  sub-section  (1) of
        Section  24 of VATA)  under  Sections  25 and 26 of VATA (nor  receive a
        credit for it under any similar or equivalent legislation);

        "Lease  Fee" means the fee in an amount of  (pound)83,536.75  payable on
        the Delivery Date by the Lessor to the Lessor Agent;

        "Lessor's  Professional  Costs"  means the Legal Fee  together  with the
        amount of fees and  disbursements  paid by the  Lessor  to the  Lessor's
        insurance advisers,  accountants and any other professional  adviser the
        Lessor shall  consult in relation to the  preparation,  negotiation  and
        completion of the Transaction Documents;

        "LIBID"  means,  in  relation  to any  period  for which  LIBID is to be
        determined, LIBOR for that period less one-eighth (1/8) of one per cent;

        "LIBOR"  means  in  relation  to any  period  for  which  LIBOR is to be
        determined:

        (a)     if the  relevant  period is equal to or greater  than one month,
                the  rate  for  Sterling  deposits  for  the  number  of  months
                comprised  in the  relevant  period  which  rates  appear on the
                display  designated  as  "Reuters  Page  LIBOR 01" on the Reuter
                Monitor  Money Rates  Service as at or about 11.00 a.m.  (London
                time) on the date on which the relevant period commences or such
                other  page  as may  replace  "Reuters  Page  LIBOR  01" on that
                service  or,  if  there  is no  such  replacement  page  on that
                service,  the page on any other service  displaying  the rate so
                designated  Provided  that if the  period is more than one month
                but not a  whole  number  of  months,  "LIBOR"  shall  mean  the
                interpolated  rate  calculated  by  reference  to LIBOR  for the
                number of months rounded down or up to the nearest whole number;
                or

        (b)     if the  relevant  period  is equal to or more  than one week and
                there  is no  such  page  on  such  service  as  referred  to in
                sub-paragraph  (a) above, or if the relevant period is less than
                one week, the rate per annum reasonably determined by the Lessor
                Agent to be the average (rounded  upwards,  if necessary to five
                decimal  places) of the rates per annum offered by leading banks
                in the London  Interbank  Market to other  leading  banks in the
                London  Interbank  Market for  deposits in Sterling for a period
                equal to, or as near as  possible  equal to,  that  period at or
                about 11.00 a.m. (London time),

        and for any  period in  respect of which  LIBOR is to be  determined  in
        relation  to  a  currency  other  than  Sterling,  the  rate  per  annum
        reasonably  determined  by the Lessor  Agent to be the average  (rounded
        upwards,  if necessary,  to five decimal places) of the rates offered by
        leading  banks in the London  Interbank  Market to leading  banks in the
        London Interbank Market for deposits in that currency for a period equal
        to, or as near as possibly  equal to, that period at or about 11.00 a.m.
        (London time) two Banking Days prior to the  commencement of that period
        or, in any such case, such other rate as may be agreed in writing by the
        Lessor and the Lessee;

        "Other  Currency"  has  the  meaning  attributed  to  that  term  in the
        definition of "Spot Exchange Rate";

        "Non-Variable  Assumptions"  means  the  assumptions  listed  as such in
        paragraph 2 of Appendix 1;

        "Normal Rent" means the "normal rent" for the purposes of Schedule 12 to
        the  Finance  Act 1997 in respect of the  leasing of the Ship under this
        Lease;

        "Normal Rental Excess" means the "normal rental excess" for the purposes
        of  Schedule 12 to the Finance Act 1997 in respect of the leasing of the
        Ship under this Lease;

        "Notional Capital  Outstanding"  means for any day, the sum (as the same
        may be adjusted  pursuant to the provisions of this  Schedule)  shown in
        the column of any Applicable Cash Flow headed "NCI";

        "Past Tax Payment  Date" means any Tax Payment Date  falling  before the
        Effective Date;

        "Percentage  Return"  means,  subject to  paragraph  4.8,  the  Lessor's
        after-tax  nominal  annual  percentage  rate of return of zero point two
        eight four four percent (0.2844%);

        "Prepaid  Rental"  means  the  amount   determined  in  accordance  with
        paragraph 8.3.5;

        "Prepayment"  means any election by the Lessee to make a  prepayment  of
        Primary Rental pursuant to clause 25.2.1(c);

        "Prepayment Amount" has the meaning given in paragraph 8.2;

        "Prepayment  Cash  Flow"  means the Cash  Flow  produced  by the  Lessor
        pursuant to paragraph 8.3;

        "Prepayment  Date" means if the Lessee elects to make a Prepayment,  the
        date falling not less than thirty (30) days after  receipt of the notice
        from the Lessor  referred to in clause  25.2.1,  unless such  Prepayment
        Date would otherwise fall on a day which is not a Banking Day, then such
        Prepayment Date shall be the immediately preceding Banking Day;

        "Primary  Period  End  Date"  means  the  twentieth  anniversary  of the
        Delivery Date;

        "Primary  Rental"  means the  Rental  payable  pursuant  to clause 7 and
        paragraph  2.1 in respect of the  leasing of the Ship during the Primary
        Period;

        "Primary  Rental Date" means 14 July 2003, each Tax Payment Date falling
        thereafter  until  (and  including)  the Tax  Payment  Date  immediately
        preceding the Primary Period End Date, and the Primary Period End Date;

        "Purchaser" means Sovereign Finance plc;

        "Relevant  Amount" means,  in relation to any Past Tax Payment Date, the
        sum of:

        (a)     the Tax Payment or Group Relief  Receipt (as the case may be) in
                respect of that Past Tax Payment Date; and

        (b)     the Revised Tax Payment or Revised Group Relief  Receipt (as the
                case may be) in respect of that Past Tax Payment Date,

        and provided  that for the  purposes  only of  calculating  any Relevant
        Amount,  the amount of any  Revised  Tax  Payment  and the amount of any
        Group Relief  Receipt shall be expressed as a negative  amount,  and the
        amount of any Tax  Payment and the amount of any  Revised  Group  Relief
        Receipt shall be expressed as a positive amount;

        "Rental"  means each amount  calculated  and payable in accordance  with
        this Schedule;

        "Rental Date" means each Primary Rental Date and each  Secondary  Rental
        Date;

        "Reserve  Asset  Rate"  means the rate  determined  in  accordance  with
        Appendix 4 to this Schedule;

        "Revised Group Relief Receipt" means, in respect of any Past Tax Payment
        Date, the amount of the Group Relief Payment which the Lessor would have
        been  assumed (on the basis of the  Variable  Assumptions  as revised to
        take the Event into  account) to have  received on that Past Tax Payment
        Date had the Event occurred before that Past Tax Payment Date;

        "Revised Tax Payment"  means,  in respect of any Past Tax Payment  Date,
        the amount of  Corporation  Tax which the Lessor would have been assumed
        (on the basis of the Variable  Assumptions  as revised to take the Event
        into  account) to have paid on that Past Tax Payment  Date had the Event
        occurred before that Past Tax Payment Date;

        "Risk Asset Weighting"  means, in relation to any form of security,  the
        counterparty  and/or  security  weightings  (expressed  as  percentages)
        attributable  from  time to time  to so  much  of the  transactions  and
        matters contemplated by the Transaction  Documents as is secured by such
        security  for the purpose of  determining  the capital  which the Lessor
        Agent or any other relevant  member of the Lessor's Group is required to
        maintain by the Financial  Services  Authority,  the Bank of England (or
        any other institution  requiring the Bank to maintain a particular level
        of capital,  where the Lessor Agent or any other relevant  member of the
        Lessor's   Group  is  obliged  or   accustomed   to  comply   with  such
        requirement);

        "RPI"  means  the  General  Index of Retail  Prices,  being  that  index
        calculated  for the time  being by the  Central  Statistical  Office  at
        intervals of approximately one month on one date in each and every month
        of each and every year and representing the average change from month to
        month  in  prices  of goods  and  services  bought  by the  majority  of
        consumers in Great  Britain,  or such similar  index as may from time to
        time replace the General Index of Retail Prices and the General Index of
        Retail Prices for any date shall be the most recently  published General
        Index of Retail Prices (or other similar index);

        "Sale Assumptions" has the meaning given in paragraph 6.1.5;

        "Secondary Rental" has the meaning given in paragraph 2.2;

        "Secondary  Rental  Date"  means any date on which  Secondary  Rental is
        payable;

        "Security Period" means:

        (a)     the period commencing on the Delivery Date and ending on 14 July
                2003;

        (b)     thereafter and until the Tax Payment Date immediately  preceding
                the Primary Period End Date, each successive  period  commencing
                on  the  day   immediately   succeeding  the  last  day  of  the
                immediately  preceding  Security  Period  and ending on the next
                succeeding Tax Payment Date;

        (c)     thereafter,   the  period  commencing  on  the  day  immediately
                succeeding  the Tax Payment Date  referred to in (b) above,  and
                ending on the Primary Period End Date;

        (d)     thereafter, in the event that any Potential Liabilities have not
                been  agreed  in  accordance   with  clause  25.5,   the  period
                commencing  on the  Primary  Period  End Date and  ending on the
                immediately succeeding Tax Payment Date;

        (e)     thereafter,   each  successive  period  commencing  on  the  day
                immediately succeeding the last day of the immediately preceding
                Security  Period and ending on the next  succeeding  Tax Payment
                Date  until  such time as the  Potential  Liabilities  have been
                agreed in accordance with clause 25.5,

        PROVIDED THAT if any Security  Period would otherwise end on a day which
        is not a Banking Day, then the last day of that Security Period shall be
        the immediately succeeding Banking Day unless that day falls in the next
        calendar  month,  in which  case it shall be the  immediately  preceding
        Banking Day;

        "Security  Table" means any table prepared in accordance  with paragraph
        9;

        "Security  Termination  Sum"  means,  in  respect  of  each  day in each
        Security  Period,  each Termination Sum which would appear in the column
        of  a  Termination  Cash  Flow  headed   "Termination   Sum"  were  such
        Termination  Cash Flow to be prepared in accordance  with  paragraph 6.1
        and assuming a termination of the Lease in accordance with clause 3.3 on
        each and every day of such Security Period;

        "Share  Acquisition   Documents"  means  the  share  sale  and  purchase
        agreement  entered into on 7 April 2003 between the Lessee as Vendor and
        the Lessor Agent as Purchaser and any and all other  documents  pursuant
        to which the Lessor Agent acquired the share capital of the Lessor;

        "Ship Cost" means the lowest of:

        (a)     the Sterling Equivalent of the expenditure  incurred on the Ship
                by Golar Gimi Inc.;

        (b)     the Sterling  Equivalent of the price paid by the Lessor for the
                Ship to Golar Gimi Inc.; or

        (c)     the fair  market  value of the Vessel as at the First UK Meeting
                Date,  as shown in the  independent  valuation  provided  by the
                Lessee;

        "Spot  Exchange  Rate"  for  any  day and  for  the  purchase  with,  or
        conversion from any currency (the "Base Currency") into another currency
        (the "Other  Currency")  the rate  determined  by the Lessor as the rate
        quoted by the Lessor  Agent in  accordance  with its usual  practice  at
        which the Lessor Agent is able to purchase the Other  Currency  with the
        Base  Currency in London at or about  10.00am Two (2) Banking Days prior
        to such day for delivery on such day and the Lessor's  determination  of
        any such rate  shall be  conclusive  and  binding  on the Lessee for all
        purposes;

        "Sterling  Equivalent"  on any  day for any  amount  denominated  (a) in
        Sterling,  means  that  amount or (b) in a currency  (as Base  Currency)
        other  than  Sterling  (as  Other  Currency),  means the  equivalent  in
        Sterling of that amount,  calculated  by  converting  that Base Currency
        amount into sterling at the Spot Exchange Rate for that day;

        "Tax Authority"  means the Inland Revenue,  H.M. Customs & Excise or any
        other  revenue,  customs,  fiscal,   governmental,   statutory,   state,
        provincial,  local governmental or municipal authority,  body or person,
        whether of the United Kingdom or elsewhere;

        "Tax Loss" means,  for any Accounting  Period of the Lessor,  the result
        (when the same is a negative  figure) of the aggregate of (i) the amount
        relating to Rentals which (in accordance with Variable Assumption 1.10.2
        as the same may be varied  from time to time) the Lessor is  required to
        bring  into  account  for tax  purposes  in such  period;  and  (ii) any
        interest  notionally  receivable by the Lessor on daily balances  during
        the relevant  period in respect of the Lessor's  notional  deposit of an
        amount  equal to the surplus  funds  (represented  by  Notional  Capital
        Outstanding  when that is a positive  figure)  assumed to be invested by
        the  Lessor in  accordance  with  Non-Variable  Assumption  2.1 (if such
        receipts were actual  rather than  notional) to the extent that the same
        would be taxable in such period (the Lessor  preparing its  computations
        in accordance with Variable Assumption 1.10.2, as the same may be varied
        from time to time) less the aggregate of (i) Capital  Allowances assumed
        to be  available  to the Lessor  for that  period in respect of the Ship
        Cost;  (ii) any  interest  notionally  payable  by the  Lessor  on daily
        balances during the relevant period in respect of the Lessor's  notional
        borrowing of amounts equal to negative  balances of the Notional Capital
        Outstanding  from time to time  assumed to be  borrowed by the Lessor in
        accordance with  Non-Variable  Assumption 2.1 to the extent that if such
        interest  payments  were  actual  rather  than  notional  the same would
        qualify  for tax  relief  in  such  period  (the  Lessor  preparing  its
        computations in accordance with Variable  Assumptions  1.10.2 and 1.8 as
        the same may be varied from time to time);  and (iii) the Lease Fee, the
        Arrangement  Fee,  the  Lessor's  Professional  Costs  and  the  Initial
        Insurance  Premium  to  the  extent  that  the  same  are  allowable  in
        accordance  with Variable  Assumptions  1.19, 1.20 and 1.38 (as the same
        may be varied from time to time);

        "Tax  Payment"  means,  in respect of each Past Tax  Payment  Date,  the
        negative  amount (if any) shown  opposite that date in the column of the
        Applicable Cash Flow headed "Tax";

        "Tax  Payment  Date"  means each of the dates  referred  to in  Variable
        Assumption 1.12;

        "Tax Report" means any report  prepared by the Lessor in accordance with
        paragraph 3.2 or 4.1 hereof;

        "Tax  System"  means the law and practice  (of general  application)  in
        relation to Corporation Tax;

        "Tax Written Down Value" means,  in relation to an Accounting  Period of
        the Lessor, the aggregate Ship Cost treated as incurred by the Lessor in
        that  and  all  previous   Accounting  Periods  qualifying  for  Capital
        Allowances (the Lessor preparing its computations in accordance with the
        Variable Assumptions,  as the same may be varied from time to time) less
        the aggregate of all Capital Allowances made to the Lessor in respect of
        the Ship Cost in all previous  Accounting  Periods of the Lessor and any
        Disposal Value which the Lessor is required to bring into account in any
        previous Accounting Period of the Lessor;

        "Termination Assumptions" means the assumptions to be taken into account
        in preparing the Termination  Cash Flow or any Further  Termination Cash
        Flow and which are set out in  paragraph  6.1.4 (as varied  from time to
        time in accordance herewith);

        "Termination  Cash Flow" means the Cash Flow produced in accordance with
        paragraph 6.1;

        "Termination Payment Date" means:

        (a)     where the leasing of the Ship to the Lessee terminates following
                the occurrence of any  Termination  Event pursuant to clause 27,
                the date specified in the notice referred to therein;

        (b)     in the case of a  voluntary  termination  of the  leasing of the
                Ship  pursuant  to clause  3.3,  the date upon which the Ship is
                delivered to and accepted by a purchaser following a sale of the
                Ship pursuant to clause 3.4;

        (c)     where the  leasing of the Ship  terminates  by reason of a Total
                Loss pursuant to clause 22, the Total Loss Payment Date;

        "Termination Sum" has the meaning given in paragraph 6.1.4(e);

        "Total Security Amount" means, in respect of each Security  Period,  the
        highest Security Termination Sum for that Security Period; and

        "Variable Assumptions" means the assumptions listed as such in paragraph
        1 of Appendix 1 (as varied from time to time in accordance herewith).

2       Rentals

2.1     Primary Rental

2.1.1   Subject  to the terms of this  Lease the  Lessee  shall pay the  Primary
        Rentals to the Lessor on the Primary Rental Dates.

2.1.2   The  Primary  Rental  payable on each  Primary  Rental Date shall be the
        amount shown in the Applicable Cash Flow in the column headed  "Rentals"
        opposite that Primary Rental Date.

2.1.3   The Primary  Rental payable under this paragraph 2.1 shall be payable in
        accordance  with clause 7, the first Primary Rental being paid in arrear
        in respect of the period from the  Delivery  Date until 14 July 2003 and
        each subsequent  Primary Rental being payable on each subsequent Primary
        Rental  Date in arrear in  respect of the  period  from the  immediately
        preceding  Primary  Rental Date until the  Primary  Rental Date on which
        such  Primary  Rental is due until the Primary  Rental Date  immediately
        preceding the Primary Period End Date, the Primary Rental payable on the
        Primary  Period  End  Date  being  in  respect  of the  period  from the
        immediately  preceding  Primary Rental Date until the Primary Period End
        Date.

2.1.4   Each instalment of Primary Rental payable under paragraph 2.1.3 shall be
        subject to adjustment in the manner specified in this Schedule.

2.1.5   The Final  Rental shall  (subject to  paragraph  4.6 and except where no
        other  Primary  Rental is capable of  variation)  be an amount  equal to
        forty per cent (40%) of the Ship Cost and shall be payable in respect of
        and shall be  payable  on the  Primary  Period  End Date as shown in the
        Initial  Cash Flow in the column  headed  "Final  Rental"  opposite  the
        Primary Period End Date.

2.2     Secondary Rental

        In respect  of the  Secondary  Period the Lessee  shall on the first day
        following the Primary  Period End Date and on each  anniversary  thereof
        during  the  Secondary  Period  pay to the  Lessor a Rental  ("Secondary
        Rental")  annually in advance equal to zero point one per cent (0.1%) of
        the Ship Cost.

2.3     Early Termination and Prepayment

        If a Primary Rental falls due on the date for which the  Termination Sum
        is  payable,  the Primary  Rental  falling due on that date shall not be
        payable.  If a  Primary  Rental  falls  due on the  date for  which  any
        Prepayment  Amount is payable,  the Primary  Rental  falling due on that
        date shall not be payable (but without prejudice to paragraph 8).

3       Initial Cash Flow and Initial Tax Report

3.1     Initial Cash Flow

        The Lessor has prepared the Initial Cash Flow:

3.1.1   on the basis of the Assumptions;

3.1.2   in accordance with the Initial Tax Report;

3.1.3   to ensure that Primary  Rental payable in paragraph  2.1.3  increases by
        five per cent (5%) per annum and accordingly:

        (a)     that the Primary Rental payable under paragraph 2.1.3 on 14 July
                2004 is 105% of the immediately preceding Primary Rental; and

        (b)     that the Primary Rental payable under paragraph 2.1.3 on each 14
                July  falling  after 14 July 2004 and before the Primary  Period
                End Date is 105% of the Primary Rental  payable under  paragraph
                2.1.3 on the immediately preceding 14 July;

3.1.4   to procure  that,  subject to the  payment by the Lessee of the  Primary
        Rentals on each Primary Rental Date, the Notional Capital Outstanding on
        the Final Date will be zero or as near thereto as may be;

3.2     Initial Tax Report

        The  Initial  Tax Report has been  prepared,  and any revised Tax Report
        prepared  pursuant to  paragraph  4.1 shall be prepared to show,  on the
        basis of  Variable  Assumptions  1.7 and 1.11 (as the same may be varied
        from time to time),  how the taxable  income  arising to the Lessor from
        the  transactions  contemplated  by the  Transaction  Documents  will be
        calculated in the Accounting Period of the Lessor current at the date of
        preparation  thereof  and in all  subsequent  Accounting  Periods of the
        Lessor up to the Accounting Period of the Lessor in which the Final Date
        applied in the preparation of the Applicable Cash Flow falls.

4       New Applicable Cash Flows

4.1     Applicable Tax Reports

        Where an Applicable  Cash Flow is to be prepared in accordance with this
        paragraph  4 the  Lessor  shall  for  the  purposes  of  preparing  such
        Applicable Cash Flow also prepare a new Tax Report (the  "Applicable Tax
        Report")  which shall be delivered to the Lessee at the same time as the
        Applicable Cash Flow.

4.2     New   Applicable   Cash   Flow  -   Changes   in   Variable   Assumption

        As soon as reasonably  practicable  after any day falling after the date
        hereof on which the  Lessor  determines  that there has been a change in
        any of the Variable Assumptions (determined in accordance with paragraph
        4.5) on the basis of which any  Applicable  Cash Flow has been  prepared
        and the occurrence of such an event would, if a new Applicable Cash Flow
        were then prepared, produce different figures in respect of the Notional
        Capital  Outstanding and/or Rentals payable hereunder,  the Lessor shall
        promptly  prepare and deliver to the Lessee a new  Applicable  Cash Flow
        prepared in accordance with paragraph 4.3 which shall take effect on the
        Effective Date.

4.3     Preparation of Applicable Cash Flows

        Where any new  Applicable  Cash Flow is prepared  pursuant to  paragraph
        4.2, such Cash Flow shall:

4.3.1   subject to  sub-paragraphs  4.3.2 to 4.3.7 (inclusive) below be prepared
        on the same basis as the immediately  preceding Applicable Cash Flow was
        prepared;

4.3.2   take into account any changes in any of the Variable  Assumptions  which
        have  occurred  (and  are  known  to the  Lessor)  between  the  date of
        preparation of the  immediately  preceding  Applicable Cash Flow and the
        date of  preparation  of such new  Applicable  Cash  Flow and any  other
        changes  in the  Variable  Assumptions  not taken  into  account  in the
        preparation of any preceding Applicable Cash Flow;

4.3.3   take  into  account  the  Rentals  shown  in the  immediately  preceding
        Applicable  Cash Flow as payable  before the  Effective  Date of the new
        Applicable Cash Flow;

4.3.4   be  prepared  in  accordance  with the  revised  Applicable  Tax  Report
        prepared by the Lessor in accordance with paragraph 4.1;

4.3.5   procure  that each  Primary  Rental  payable  on a Primary  Rental  Date
        falling after the Effective Date shall bear the same ratio to each other
        such Primary Rental as the Primary  Rental payable on the  corresponding
        Primary Rental Date shown in the immediately  preceding  Applicable Cash
        Flow  bears  to  each  of  the  other  Primary  Rentals  shown  in  such
        immediately   preceding  Applicable  Cash  Flow  as  payable  after  the
        Effective Date;

4.3.6   procure  that the Final Rental shall be equal to forty per cent (40%) of
        the Ship Cost; and

4.3.7   procure that, subject to the payment by the Lessee of Primary Rentals on
        each subsequent Primary Rental Date, (including the payment of the Final
        Rental on the Primary Period End Date), the Notional Capital Outstanding
        on the Final Date will be zero or as near thereto as may be.

4.4     Effect of substitution of new Applicable Cash Flows

        As from the Effective  Date of any new  Applicable  Cash Flow,  the same
        shall be  deemed  to be  incorporated  herein  in  substitution  for the
        Initial Cash Flow or, as the case may be, the previous  Applicable  Cash
        Flow,  and  payments  of Primary  Rental to be made  hereunder  shall be
        determined by reference thereto.

4.5     Occurrence of Change

4.5.1   Subject to paragraph 10, for the purposes of this Schedule,  a change in
        a Variable  Assumption or a Termination  Assumption shall be regarded as
        having occurred if:

        (a)     without  prejudice  to  sub-paragraphs  (b) to  (d)  (inclusive)
                below,  the  Lessor  determines  such  Variable   Assumption  or
                Termination Assumption is incorrect;

        (b)     any  statute  or  statutory  instrument  embodying  such  change
                becomes law or if earlier when HM Government or other regulatory
                body makes an official announcement of a change even though such
                change  will only  take  effect  in the  future  and a Cash Flow
                prepared,  in such a case and at that  time,  shall  immediately
                take into account all changes so embodied or announced  provided
                that a further  change shall be regarded as having  occurred if,
                following  an  announcement  of a  change,  such  change  is not
                implemented in accordance with such announcement;

        (c)     the  Lessor  receives  a  determination,  decision,  assessment,
                notice or other  written  communication  from any Tax  Authority
                from which it appears  that any matter  relating to or affecting
                any  Variable  Assumption  or  Termination  Assumption  is being
                disputed  by such  Tax  Authority,  regardless  of any  right or
                decision to dispute,  challenge  or appeal the same (but without
                prejudice  to the terms of the Tax Contest  Letter)  and, in the
                reasonable  opinion  of  the  Lessor,  such  dispute  cannot  be
                resolved  promptly by  negotiation  with such Tax Authority on a
                basis  which  would  confirm the  correctness  of such  Variable
                Assumption  or  Termination  Assumption  provided that a further
                change shall be deemed to occur  depending on the final  outcome
                of any such dispute, challenge or appeal concerning the disputed
                matter; and

        (d)     following a  Termination  Event the Lessor  shall be entitled to
                deem  a  change  in  any  of  the  Variable  Assumptions  or the
                Termination Assumptions to have occurred at any time when it has
                reasonable  grounds for believing  that such a change will occur
                and, in such case, if the change does not in fact occur and take
                effect when anticipated, a further change shall then be regarded
                as having occurred.

4.5.2   A new  Applicable  Cash Flow prepared as a consequence of the occurrence
        of any  such  change  or  deemed  change  in a  Variable  Assumption  or
        Termination  Assumption shall take into account the date from which such
        change or deemed change becomes  effective and such new Applicable  Cash
        Flow shall be accompanied by a notice from the Lessor specifying:

        (a)     the Variable Assumption or the Termination  Assumption which has
                changed;

        (b)     the Lessor's reason or reasons for its  determination  that such
                Variable Assumption or Termination Assumption has changed;

        (c)     the replacement Variable Assumption or Termination Assumption on
                the  basis  of  which  the new  Applicable  Cash  Flow  has been
                prepared; and

        (d)     the date  from  which the  replacement  Variable  Assumption  or
                Termination Assumption is to apply.

4.6     Changes  in  Variable   Assumptions   after   payment  of  Final  Rental

        The  provisions of paragraph 7 shall (mutatis  mutandis)  apply if there
        shall be any change in any of the Variable Assumptions after the payment
        of the Final  Rental by treating  the latest  Applicable  Cash Flow as a
        Termination Cash Flow, and by treating such Final Rental as a payment in
        respect of the Termination Sum.

4.7     Revision of Assumptions

4.7.1   In the  event  of a change  in any of the  Variable  Assumptions  or the
        Termination   Assumptions,   that  Variable  Assumption  or  Termination
        Assumption  shall be deemed to be revised as  necessary  to reflect such
        change and that  Variable  Assumption  or  Termination  Assumption as so
        revised shall be deemed to be incorporated  herein in  substitution  for
        that set out in this  Schedule  (as the same may  previously  have  been
        revised pursuant to this Schedule).

4.8     Risk Asset Weighting

4.8.1   The  Percentage  Return  has been  determined  by the Lessor on the date
        hereof  on the  basis  that the Risk  Asset  Weighting  of the  Lessor's
        investment in the Transactions is an average (the "Average  Weighting"),
        which  Average  Weighting  has  been  calculated  by  reference  to  the
        percentage of the Lessor's  investment in the transactions  contemplated
        in the  Transaction  Documents  which is to be  secured by the Letter of
        Credit  with a Risk  Asset  Weighting  of twenty  per cent (20%) and the
        percentage of the Lessor's  investment in the transactions  contemplated
        by the Transaction  Documents which is to be unsecured with a Risk Asset
        Weighting of one hundred per cent (100%).

4.8.2   In the event that the Lessor  reasonably  determines that the Risk Asset
        Weighting is increased or decreased at any time after the date hereof as
        a result of a change in a  Variable  Assumption  which  gives  rise to a
        change in the Lessor's  investment in the  transactions  contemplated by
        the Transaction Documents, or a change in the percentage of the Lessor's
        investment  secured  by the  Letter  of  Credit,  the  provision  of any
        Additional  Security,  or any change in the  percentage  of the Lessor's
        investment secured by any Additional Security, or any change made by the
        Financial  Services  Authority,  Bank of  England  or other  appropriate
        regulatory body to the capital  required or a change to the structure of
        the  transactions  contemplated by the Transaction  Documents  otherwise
        than as a result of any  voluntary  act or omission by the Lessor or the
        Lessor  Agent or any  member of the  Lessor's  Group,  then,  subject to
        paragraph 4.8.3 below, a new Cash Flow shall be prepared under paragraph
        4.2 and  paragraph  4.3  shall  apply as if there had been a change in a
        Variable Assumption.

4.8.3   Subject to paragraph 4.8.4, where this paragraph 4.8.3 applies:

        (a)     the  Lessor  shall  determine  the  revised  average  Risk Asset
                Weighting  of  the  Lessor's   investment  in  the  transactions
                contemplated by the Transaction  Documents (the "Revised Average
                Weighting"), which Revised Average Weighting shall be calculated
                by reference to the percentage of the Lessor's investment in the
                transactions  contemplated by the Transaction  Documents on each
                Rental Date  falling  prior to the date on which this  paragraph
                4.8.3 is to be applied (the "Application Date") and by reference
                to the percentage of the Lessor's investment in the Transactions
                on each Rental  Date  falling on or after the  Application  Date
                which  is to be  secured  by  the  Letter  of  Credit  or  other
                Additional Security,  and the Risk Asset Weighting  attributable
                thereto,  and the  percentage of the Lessor's  investment in the
                transactions  contemplated by the Transaction  Documents on each
                Rental Date falling on or after the Application Date which is to
                be unsecured, and the Risk Asset Weighting attributable thereto.
                Where this paragraph  4.8.3 applies,  the Lessor shall notify in
                writing to the Lessee  such  Revised  Average  Weighting,  which
                shall be calculated on the same basis as the Average  Weighting,
                or,  as the case  may be,  the last  preceding  Revised  Average
                Weighting  notified  to the  Lessee,  save that such new Revised
                Average  Weighting  shall take into account the  application  of
                paragraph  4.8.2  and the  calculations  to be made  under  this
                paragraph 4.8.3(a);

        (b)     where the Revised Average  Weighting is greater than the Average
                Weighting,  or,  following  any  previous  application  of  this
                paragraph 4.8.3,  the Revised Average  Weighting last calculated
                under this sub-paragraph 4.8.3 (the "Latest Average Weighting"),
                then a new Cashflow Report prepared in accordance with paragraph
                4.2 shall  apply as if there had been a change in an  Assumption
                and in preparing  that Cashflow (and any  subsequent  Cashflow),
                the Percentage Return shall be increased by zero point zero zero
                nine seven  (0.0097) for each one per cent (1%)  increase in the
                Revised Average Weighting over the Latest Average Weighting;

        (c)     where the  Revised  Average  Weighting  is less than the Average
                Weighting or, as the case may be, the Latest Average  Weighting,
                then a new Cashflow Report prepared in accordance with paragraph
                4.2 shall  apply as if there had been a change in an  Assumption
                and in preparing  that Cashflow (and any  subsequent  Cashflow),
                the Percentage Return shall be decreased by zero point zero zero
                nine seven  (0.0097) for each one per cent (1%)  decrease in the
                Revised  Average  Weighting  below the Average  Weighting or the
                Latest Average Weighting;

        (d)     the  increased,  or,  as the case may be,  decreased  Percentage
                Return  calculated in accordance with this paragraph 4.8.3 shall
                apply from the date of  application  of this paragraph 4.8 until
                the  Primary  Period End Date,  or if  earlier,  the date of any
                further application of this paragraph 4.8.

4.8.4   The  Percentage  Return shall not be reduced  below zero point two eight
        four four  (0.2844%) as a result of any  application  of this  paragraph
        4.8.

4.8.5   This  paragraph 4.8 shall apply in the same way to any further change in
        Risk  Asset  Weighting.  In  the  event  of any  change  in  Risk  Asset
        Weighting, the Lessor shall notify the Lessee forthwith.

4.9     Retrospective changes in Variable Assumptions or Termination Assumptions

4.9.1   This  paragraph 4.9 shall apply where the  occurrence of a change in any
        of the Variable  Assumptions or the Termination  Assumption  results, in
        respect of any Past Tax  Payment  Date,  in a Relevant  Amount  which is
        other than zero.

4.9.2   Where this paragraph 4.9 applies,  the new Applicable Cash Flow required
        to be prepared  in  accordance  with  paragraphs  4.2 and 4.3 shall,  in
        respect of any Past Tax Payment Date, be prepared on the basis that:

        (a)     the amount of Corporation  Tax shown as payable,  or as the case
                may be, the Group Relief  Payment  shown as  receivable  on each
                Past Tax Payment  Date is  unchanged  from the amount  shown for
                that date in the immediately preceding Applicable Cash Flow; (b)
                where the  Relevant  Amount is a negative  amount there shall be
                debited to the new  Applicable  Cash Flow in the  column  headed
                "Tax"  on  the  Tax  Payment  Date  immediately  succeeding  the
                Effective Date an amount equal to the Relevant Amount and in the
                column headed "Interest on Overdue Tax" interest on the Relevant
                Amount  calculated  on the Inland  Revenue  Terms for the period
                from and  including  the  relevant  Past Tax Payment Date to but
                excluding  the  Tax  Payment  Date  immediately  succeeding  the
                Effective Date;

        (c)     where the  Relevant  Amount is a positive  amount there shall be
                credited to the new  Applicable  Cash Flow in the column  headed
                "Tax" on the assumed date of the receipt  thereof in  accordance
                with  Non-Variable  Assumption  2.13  an  amount  equal  to  the
                Relevant  Amount and in the column  headed  "Interest on Overdue
                Tax" interest on the Relevant  Amount,  calculated on the Inland
                Revenue  Terms for the period from and  including  the  relevant
                Past Tax Payment Date to but excluding that assumed date.

5       Adjustments for changes in Interest Rates

5.1     Adjustments in respect of Applicable Rate

5.1.1   In respect of the Adjustment Date for each Adjustment  Period commencing
        after the Delivery  Date up to and including  the  Adjustment  Period in
        which the Final Date in relation to the  relevant  Cash Flow falls,  the
        Lessor shall calculate an amount  ("Interest  Adjustment")  equal to the
        difference between:

        (a)     the amount of interest which has been debited or credited to the
                relevant Cash Flow for such Adjustment  Period calculated at the
                Assumed Rate; and

        (b)     the amount of interest which would have been debited or credited
                to that  Cash  Flow if the  amount  of the debit or credit to be
                made had been calculated by reference to the Applicable Rate for
                such Adjustment Period instead of the Assumed Rate,

        which shall be expressed as a positive amount where:

                (i)     the amount calculated under (b) above exceeds the amount
                        calculated  under  (a) above  and the  Notional  Capital
                        Outstanding  during that Adjustment  Period is negative;
                        or

                (ii)    the amount calculated under (a) above exceeds the amount
                        calculated  under  (b) above  and the  Notional  Capital
                        Outstanding  during that Adjustment  Period is positive;
                        and

                shall   be expressed as a negative amount where:

                (iii)   the amount calculated under (a) above exceeds the amount
                        calculated  under  (b) above  and the  Notional  Capital
                        Outstanding  during that Adjustment  Period is negative;
                        or

                (iv)    the amount calculated under (b) above exceeds the amount
                        calculated  under  (a) above  and the  Notional  Capital
                        Outstanding  during that Adjustment  Period is positive;
                        and

                the  Lessor  shall  give  notice to the Lessee not less than ten
                (10)  Banking Days before the  relevant  Adjustment  Date of the
                amount of the Interest Adjustment and in the absence of manifest
                error,  the  Lessor's   calculation  of  such  amount  shall  be
                conclusive and binding on the Lessee.

5.1.2   On each Adjustment Date in respect of each Adjustment Period, the Lessee
        shall pay to the Lessor (where  positive) or the Lessor shall pay to the
        Lessee (where negative) the amount of the Interest Adjustment calculated
        in  accordance  with  paragraph  5.1.1 to the extent  possible by way of
        adjustment to the Rental otherwise payable on that date.

5.2     Adjustments in respect of new Applicable Cash Flow

        Where  any  new  Applicable  Cash  Flow is  prepared  the  Lessor  shall
        separately  calculate  the financial  adjustment  (if any) which has not
        been  taken  into  account  and which  needs to be made as  between  the
        parties  by reason of  adjustments  in respect  of the  Applicable  Rate
        calculated  under  paragraph 5.1 having been based on figures in respect
        of Notional Capital  Outstanding which such new Applicable Cash Flow may
        show to be incorrect,  which  adjustment shall be notified to the Lessee
        and paid in  accordance  with such  calculation  within ten (10) Banking
        Days  of  receipt  by the  Lessee  of such  notice  which  shall  not be
        reflected in any Applicable Cash Flow.

5.3     Consequences of Termination

        The  Lessee  undertakes  and  agrees to  indemnify  the Lessor on demand
        against  any Broken  Funding  Costs (as  certified  to the Lessee by the
        Lessor)  arising to the Lessor as a result of the Lessor  repaying prior
        to its  specified  maturity  any  funding  assumed to be obtained by the
        Lessor in respect of the  transactions  contemplated  by the Transaction
        Documents or in consequence of any Termination, or any Prepayment. If in
        consequence  of such repayment any Broken Funding Gains (as certified to
        the Lessee by the  Lessor)  accrue to the Lessor in  connection  with an
        early repayment of such funding, the Lessor undertakes to pay the Lessee
        an amount equal to such Broken Funding Gains. If the Lessor is unable to
        repay such funding actually entered into by the Lessor,  it shall notify
        the Lessee of the Lessor's best estimate of the Broken  Funding Costs or
        Broken  Funding  Gains  which  would have  resulted to the Lessor if the
        Lessor had in fact repaid such funding and such estimated amount will be
        treated for the purposes of this  paragraph  5.3 as if it were an actual
        amount.

5.4     Payments under this paragraph 5

        Payments  by or to the Lessee  under this  paragraph  5 shall be paid as
        additional Rental or rebates of Rental (as appropriate) but shall not be
        reflected in any Applicable Cash Flow.

6       Termination

6.1     Termination Cash Flow

        In any case where the  Termination  Sum is to be ascertained  the Lessor
        shall,  as  soon  as  practicable  and in any  event,  in the  case of a
        Termination other than following a Termination Event, not later than ten
        (10) Banking Days before the  Termination  Payment Date and, in the case
        of a  Termination  pursuant  to clause 27, on or before the  Termination
        Payment  Date,  prepare  and  deliver  to the  Lessee a Cash  Flow  (the
        "Termination Cash Flow") which shall:

6.1.1   subject as mentioned  below, be prepared on the same basis as the latest
        Applicable  Cash Flow was prepared  and on the basis of the  Assumptions
        but excluding Variable Assumption 1.15;

6.1.2   take into account any changes in any of the Variable  Assumptions  which
        have occurred (in  accordance  with paragraph 4.5) (and are known to the
        Lessor)  between the date of preparation of the latest  Applicable  Cash
        Flow and the date of  preparation of the  Termination  Cash Flow and any
        other such changes in the Variable Assumptions not taken into account in
        the latest Applicable Cash Flow;

6.1.3   take into  account any Primary  Rental  payable  before the  Termination
        Payment Date;

6.1.4   be  prepared  on the basis of the  following  assumptions  ("Termination
        Assumptions",   which   assumptions   shall  be  treated   as   Variable
        Assumptions):

        (a)     that

                (i)     the Ship  will  cease to belong  to the  Lessor  for the
                        purposes  of the  CAA in the  Accounting  Period  of the
                        Lessor in which the Termination Payment Date falls; and

                (ii)    the Ship will be sold and the Net Sale  Proceeds  and/or
                        Net Total  Loss  Proceeds,  as the case may be,  will be
                        received  by the  Lessor  on or before  the  Termination
                        Payment Date;

        (b)     that the aggregate  amount of the Net Sale  Proceeds  and/or Net
                Total Loss Proceeds, as the case may be, will be the only amount
                required to be brought  into  account as  Disposal  Value in the
                Accounting Period in which the Termination Payment Date falls;

        (c)     that the  amount so  required  to be  brought  into  account  as
                Disposal  Value will not be less than the Tax Written Down Value
                of the Ship at the  commencement  of the  Accounting  Period  in
                which the Termination Payment Date falls;

        (d)     where the  Termination Sum is to be ascertained in the case of a
                Termination  pursuant to clause 27, the Assumed  Rate in respect
                of Notional Capital Outstanding where a positive amount shall be
                the best  estimate of LIBID as  determined by the Lessor for the
                date which the Termination Sum is to be calculated;

        (e)     assume  that  the  Lessor  receives  or pays on the  Termination
                Payment Date a single sum (the  "Termination  Sum") of an amount
                that will procure that the Notional  Capital  Outstanding  as at
                the Final Date for the Termination  Cash Flow will be zero or as
                near thereto as may be possible.

6.1.5   For  the  avoidance  of  doubt,  to  the  extent  that  the  Termination
        Assumptions  referred to in sub-paragraphs  6.1.4(a),  (b) and (c) above
        (the  "Sale  Assumptions")  are  correct,  there  shall be  deemed to be
        available to the Lessor in the Accounting  Period of the Lessor in which
        the Termination  Payment Date falls a Capital Allowance equal to the Tax
        Written  Down Value of the Ship at the  commencement  of the  Accounting
        Period in which the Termination Payment Date falls.

6.2     Determination of Termination Sum

6.2.1   The Termination  Sum shall be the number  appearing in the column headed
        "Termination  Sum" of the  Termination  Cash Flow prepared in accordance
        with paragraph 6.1 opposite the Termination Payment Date.

6.2.2   If the  Termination  Cash Flow has  assumed  the receipt of a sum by the
        Lessor, the amount of the Termination Sum shall be payable by the Lessee
        to the Lessor on the Termination Payment Date by way of Rental.

6.2.3   If the  Termination  Cash Flow has  assumed  the payment of a sum by the
        Lessor, the amount of the Termination Sum shall be payable by the Lessor
        to the  Lessee  on the  Termination  Payment  Date by way of  rebate  of
        Rental.

6.3     Termination Fee

6.3.1   Subject to paragraph 6.3.2 below,  if this Lease is terminated  prior to
        the date falling sixty (60) months after the Delivery  Date,  the Lessee
        shall,  in addition  to the  Termination  Sum,  pay to the Lessor on the
        Termination  Payment  Date,  the  Termination  Fee which  shall be of an
        amount equal to:

        A
        -
        B

        where:  A is the aggregate of each amount of the Percentage Return which
                would have been  debited in the column  headed  "Margin"  in the
                latest  Applicable Cash Flow after the Termination  Payment Date
                and until and including the date falling sixty (60) months after
                the  Delivery  Date (on the basis that the Lease  would not have
                Terminated  before  such  date)  discounted  to the  Termination
                Payment  Date at the  rate of five  point  two two five per cent
                (5.225%) per annum; and

                B is  (1-x)  where  x is the  Corporation  Tax  Applicable  Rate
                (expressed as a decimal) for the Accounting Period of the Lessor
                in which the Termination Payment Date falls.

6.3.2   The Termination Fee referred to in paragraph 6.3.1 shall not be payable:
        (i) in the event that this Lease is  terminated  after the date  falling
        sixty (60) months  after the  Delivery  Date;  or (ii) in the event that
        this Lease is  terminated  as a result of a Total  Loss of the Ship;  or
        (iii) in the  event  that  this  Lease is  terminated  as a result  of a
        Relevant  Bank Change of Law Event  pursuant to clause 25.3;  or (iv) in
        the event that this Lease is  terminated  as a result of a Relevant Bank
        Illegality  Event pursuant to clause 25.4; or (v) in the event that this
        Lease is  terminated  as a result of a  Termination  Event  pursuant  to
        clauses  26.1.8 to 26.1.14  (inclusive)  and clause 26.2; or (vi) in the
        event that this Lease is  terminated as a result of the  application  of
        clause 31; or (vii)  where this  Lease is  terminated  prior to the date
        falling  sixty  (60)  months  after  the  Delivery  Date and the  Lessee
        certifies in writing to the reasonable  satisfaction  of the Lessor that
        it  is  terminating  this  Lease  because  it  has  become  Economically
        Burdensome.

6.4     Change  in  Variable   Assumption  1.15  and/or  the  Sale   Assumptions

6.4.1   Any  Applicable  Cash Flow  prepared  to  reflect  a change in  Variable
        Assumption  1.15.1  or,  as the case  may be,  the  Sale  Assumption  in
        paragraph 6.1.4(a),  shall take into account such change and be prepared
        on the assumption that there will be no sale of the Ship or, as the case
        may be, no receipt of Net Sale Proceeds  and/or Net Total Loss Proceeds,
        on or after the Termination Payment Date and that no Disposal Value will
        be required to be brought into account in respect thereof.

6.4.2   Any  Applicable  Cash Flow  prepared  to  reflect  a change in  Variable
        Assumption  1.15.2 or, as the case may be, the Sale  Assumptions,  or as
        the case may be, the  assumption  in  paragraph  6.4.1 (each a "Relevant
        Assumption")  shall take into account such change and be prepared on the
        basis of the following assumptions:

        (a)     that  Capital  Allowances  on the  amount  by which any Net Sale
                Proceeds  and/or Net Total Loss Proceeds  required to be brought
                into account as Disposal Value in the relevant Accounting Period
                are less than the Tax Written  Down Value in respect of the Ship
                Cost  will be  obtainable  in  accordance  with  the Tax  System
                prevailing  at the  date of  such  Cash  Flow in the  Accounting
                Period of the  Lessor in which the  Relevant  Assumption  proved
                incorrect and in each subsequent Accounting Period of the Lessor
                ending before the Primary Period End Date;

        (b)     that  the   Corporation   Tax  Applicable  Rate  for  each  such
                Accounting  Period of the Lessor  subsequent  to the  Accounting
                Period in which such  Applicable Cash Flow is prepared but prior
                to the  Accounting  Period in which the Primary  Period End Date
                falls  will  be the  Corporation  Tax  Applicable  Rate  for the
                Accounting  Period  current  at  the  date  such  Cash  Flow  is
                prepared;

        (c)     that Capital  Allowances  will be obtainable in accordance  with
                the Tax System  prevailing  at the date of  preparation  of such
                Cash Flow for each Accounting  Period of the Lessor ending after
                the  Primary   Period  End  Date  until  the   fortieth   (40th)
                anniversary of the Delivery Date;

        (d)     that, for the purposes of this calculation only, the Corporation
                Tax Applicable  Rate for the Accounting  Period of the Lessor in
                which the Primary Period End Date falls will be the lower of the
                Corporation Tax Applicable Rate for the Accounting Period of the
                Lessor current at such date and 25 per cent; and

        (e)     in an Applicable  Cash Flow prepared for the Primary  Period End
                Date there  shall be  credited  to the column of the  Applicable
                Cash Flow headed "Tax"  opposite the Primary Period End Date the
                allowances   assumed  by  sub-paragraph  (c)  to  be  obtainable
                multiplied by the  Corporation  Tax  Applicable  Rate assumed in
                sub-paragraph  (d) and discounted to the Primary Period End Date
                at the After-Tax Interest Rate.

6.4.3   Any Applicable  Cash Flow prepared  pursuant to this paragraph 6.4 shall
        be prepared on the  assumption  that the Assumed Rate for any Adjustment
        Period commencing after the date of preparation of such Cash Flow is:

        (a)     the  lower  of  (A)  twelve  month  LIBOR  (as at  the  date  of
                preparation of the Applicable  Cash Flow) minus one per cent and
                (B) LIBID (as at the date of preparation of the Applicable  Cash
                Flow) in respect of Notional Capital Outstanding when a positive
                amount; and

        (b)     the  aggregate  of  twelve  month  LIBOR  (as  at  the  date  of
                preparation of such  Applicable Cash Flow) plus four per cent in
                respect of Notional Capital Outstanding when a negative amount.

6.4.4   The  assumptions  made in  sub-paragraphs  6.4.1,  6.4.2(a)  and (b) and
        6.4.3(a)  and (b) above shall be treated as Variable  Assumptions  until
        the  Primary  Period  End Date or,  where the Lease  Period  expires  by
        effluxion of time on that date,  the first  anniversary of that date and
        as  Non-Variable  Assumptions  thereafter;   and  any  change  in  those
        assumptions shall be reflected in a Further  Termination Cash Flow which
        shall only be prepared on each 31 March  falling  after the  Termination
        Payment  Date and on the  Primary  Period End Date and,  where the Lease
        Period expires by effluxion of time on the Primary Period End Date, only
        on the first anniversary of the Primary Period End Date. The assumptions
        made in sub-paragraphs 6.4.2(c) and (d) shall be treated as Non-Variable
        Assumptions.

7       Variation of Termination Sum

7.1     Further Termination Cash Flow

7.1.1   In any case where the Lessor has prepared a Termination  Cash Flow,  the
        Lessor shall prepare a further cash flow (the "Further  Termination Cash
        Flow")  to  take  into  account  any  change  in  any  of  the  Variable
        Assumptions and/or the Termination Assumptions which has occurred and is
        known  to the  Lessor  but  which  was not  taken  into  account  in the
        Termination Cash Flow.

7.1.2   The Further Termination Cash Flow shall be prepared on the same basis as
        the Termination Cash Flow and shall ensure that, in the light of changes
        in the Variable Assumptions and the Termination  Assumptions and subject
        to either  the  receipt  by the  Lessor of a further  single  sum or the
        payment  by the  Lessor  of a single  sum on the  last day of the  month
        following  that in which the Further  Termination  Cash Flow is prepared
        and delivered to the Lessee,  the Notional  Capital  Outstanding  on the
        Final Date for the Further Termination Cash Flow will be zero or as near
        thereto as may be.

7.2     Delivery of Further Termination Cash Flow

        The Lessor shall deliver the Further Termination Cash Flow to the Lessee
        as soon as reasonably  practicable and in any event no later than thirty
        (30)  Banking Days after the change in the  Variable  Assumption  or the
        Termination  Assumption  becomes  known to the Lessor by reason of which
        such Cash Flow is to be prepared.

7.3     Payment of adjustment to the Lessor

        If the Further Termination Cash Flow has assumed the receipt of a sum by
        the Lessor,  the Lessee  shall pay to the Lessor,  by way of  additional
        Rental,  the  amount  of  such  receipt  on the  last  day of the  month
        following  that in which the Further  Termination  Cash Flow is prepared
        and a copy delivered to the Lessee.

7.4     Payment of adjustment to the Lessee

        If the Further Termination Cash Flow has assumed the payment of a sum by
        the Lessor, the amount thereof shall be paid to the Lessee by the Lessor
        by way of rebate of Rental on the last day of the month  following  that
        in which  the  Further  Termination  Cash  Flow is  prepared  and a copy
        delivered to the Lessee.

7.5     Further Changes

        If any further change in the Variable Assumptions and/or the Termination
        Assumptions occurs after the Further Termination Cash Flow was prepared,
        which  would  have  affected  the  same  had it been  known  when it was
        prepared,  the  provisions  of this  paragraph  7 shall  apply,  mutatis
        mutandis, to the same.

8       Prepayment

8.1     Payments

        Where the Lessee  notifies the Lessor in  accordance  with clause 25.2.1
        that it wishes to make a Prepayment, the Lessor shall no later than five
        (5) days before the Prepayment  Date calculate the Prepayment  Amount in
        accordance with this paragraph 8.

8.2     Prepayment Amount

        The Prepayment Amount shall be the aggregate of:

8.2.1   the Prepaid Rental; and

8.2.2   any Broken Funding Costs or, as the case may be, less any Broken Funding
        Gains.

8.3     Prepayment Cash Flow

        When any Prepayment Amount is required to be calculated pursuant to this
        paragraph 8, the Lessor shall,  as soon as practicable  and in any event
        on or before  the date  falling  five (5) days  prior to the  Prepayment
        Date,  produce and  deliver to the Lessee a  Prepayment  Cash Flow.  The
        Prepayment Cash Flow shall:

8.3.1   subject as  mentioned  below be  prepared  on the same basis as the last
        preceding Applicable Cash Flow was prepared;

8.3.2   take into account any changes in any of the Variable  Assumptions  which
        have occurred (and are known to the Lessor) between the date of the last
        preceding  Applicable  Cash Flow and the  preparation  of the Prepayment
        Cash Flow and any other  changes in the Variable  Assumptions  not taken
        into account in the last preceding Applicable Cash Flow;

8.3.3   be prepared on the  assumption  (which  shall be a Variable  Assumption)
        that the Prepaid  Rental  shall be included as Schedule D Case I receipt
        of the Lessor and taxed on the date on which such amount is payable;

8.3.4   assume that:

        (a)     Primary Rental due up to and including the Prepayment Date shall
                be the  Primary  Rental  determined  by  reference  to the  last
                preceding Applicable Cash Flow;

        (b)     the Prepaid Rental is received on the Prepayment Date;

8.3.5   assume that the Lessor  receives on the Prepayment  Date a single sum by
        way of Rental (the  "Prepaid  Rental")  of such amount as would  result,
        subject  to the  receipt  by the Lessor of the  Rentals  referred  to in
        paragraph  8.3.4(b),  in the Total  Security  Amount for and during each
        Security  Period shown in the new Additional  Security Table prepared by
        the Lessor  pursuant  to clause  25.2.1  being equal to or less than the
        aggregate of the Letter of Credit Amount,  the Maximum  Unsecured  Strip
        Liability Amount and any Additional Security Amount in each case for and
        during each such Security Period.

8.4     New Applicable Cash Flow

        Subject  to  the  payment  by the  Lessee  of the  Prepaid  Rental,  the
        Prepayment  Cash Flow  produced in accordance  with  paragraph 8.3 above
        shall be substituted for the last preceding  Applicable Cash Flow to the
        exclusion of any previous Cash Flow.

9       Security

9.1     Initial Security Table

9.1.1   The Lessor has prepared a Security Table (the "Initial  Security Table")
        based on the Initial Cash Flow  setting out in column 2 the  Termination
        Sum on the first day of each Security Period,  in column 3 the Letter of
        Credit  Amount on that date,  in column 4 the  Maximum  Unsecured  Strip
        Liability Amount in each such case for each Security Period specified in
        column 1 and  ending on or before  the  Primary  Period  End Date and in
        column 5 the Extra Security Amounts.

9.2     Additional Security Table

        In any case where the Lessor  prepares an Applicable  Cash Flow pursuant
        to paragraph 4 on or after the date hereof,  the Lessor shall as soon as
        reasonably  practicable prepare and deliver to the Lessee a new Security
        Table  ("Additional  Security  Table")  on the same  basis as the latest
        Applicable  Security  Table was  prepared  save that the new  Additional
        Security Table shall:

9.2.1   take into  account the changes in Variable  Assumptions  which are taken
        into  account in the  preparation  of such new  Applicable  Cash Flow in
        accordance with paragraph 4;

9.2.2   show in column 2 the Total Security Amount for each Security Period;

9.2.3   show in column 3 the  aggregate  of the Letter of Credit  Amount and any
        Additional Security Amount;

9.2.4   show in column 5 the Extra Security Amounts; and

9.2.5   show,  in an  additional  column 6, as a negative  figure,  the Required
        Security  Amount (if any),  being the amount by which the Total Security
        Amount shown in column 2 of the new  Additional  Security  Table exceeds
        the aggregate of the Letter of Credit Amount and any Additional Security
        Amount shown in column 3, the Maximum  Unsecured Strip Liability  Amount
        shown in column 4 and the Extra Security  Amounts,  as  appropriate,  in
        column 5, in each case for and during each Security Period  specified in
        column 1 of the new Additional Security Table or, as the case may be, as
        a positive  figure,  the Required  Security  Amount (if any),  being the
        amount by which the aggregate of each such Letter of Credit Amount,  any
        Additional  Security  Amount and the Maximum  Unsecured  Strip Liability
        Amount and Extra  Security  Amounts  exceeds  each such  Total  Security
        Amount.

9.3     Substitution of new Applicable Security Table

9.3.1   As soon as  practicable  following  the increase in the Letter of Credit
        Amount, the provision by the Lessee of an Additional  Security Amount or
        the payment of a Prepayment Amount by the Lessee, as the case may be, in
        each case in  accordance  with clause  25.2.1 or, the  reduction  in the
        Letter  of Credit  Amount  or the  release  of any  Additional  Security
        Amounts,  as the case may be, in each  case in  accordance  with  clause
        25.2.2,  the  Lessor  shall  prepare  and  deliver  to the  Lessee a new
        Security Table ("Applicable  Security Table") which shall be prepared on
        the same  basis as the new  Additional  Security  Table  referred  to in
        paragraph 9.2 was prepared save that:

        (a)     in the case of an increase or  reduction in either the Letter of
                Credit Amount or the Additional  Security Amount,  it shall show
                the  revised  Letter  of Credit  Amount  or, as the case may be,
                Additional Security Amount; and

        (b)     in the case of the payment by the Lessee of a Prepayment Amount,
                shall also be prepared on the same basis as the Prepayment  Cash
                Flow prepared to calculate such  Prepayment  Amount was prepared
                and accordingly reflecting the revised Total Security Amount,

        in each case in respect of each Security Period.

9.3.2   As from the date  any new  Applicable  Security  Table is  prepared  and
        delivered  to the  Lessee,  the same  shall be  incorporated  herein  in
        substitution for the previous Applicable Security Table.

10      Limitations on Adjustment

        Notwithstanding  anything  in  this  Schedule  and  this  Lease  to  the
        contrary,  the Lessor  shall not be  entitled  or  required  to make any
        adjustment  under the provisions of this Schedule or in the  preparation
        of any Cash Flow and no change  shall be  treated  as  occurring  in any
        Variable  Assumption or Termination  Assumption  where and to the extent
        that,  otherwise than (i) as a result of the occurrence of any change in
        Variable  Assumption  1.13,  (ii) by reason  of any of the  transactions
        effected  under  or  pursuant  to or  contemplated  by  the  Transaction
        Documents and the Share Acquisition  Documents (other than an assignment
        by the Lessor pursuant to clause 30.2), (iii) as a result of a change in
        Generally  Accepted  Accounting  Principles  or,  (iv) as a result  of a
        breach by the  Lessee of any of its  obligations  under the  Transaction
        Documents,  a Variable  Assumption  would but for the provisions of this
        paragraph 10, be treated as changing by reason of:

10.1    the Lessor not duly  claiming on a timely  basis all Capital  Allowances
        available  to it in  respect  of the Ship Cost or not  supplying  to any
        relevant Tax  Authority on a due and timely  basis any  information  and
        documents  which are properly  required by such  authority in support of
        any such  claim  (unless  such  failure  to make a claim or supply  such
        document or  information  on a timely basis results from a breach by the
        Lessee  of  its  obligations  under  this  Lease  or  such  document  or
        information not being available to the Lessor and/or unless such failure
        results  from any  written  request  made by the Lessee to the Lessor in
        relation  to such  claim  or  other  matter  affecting  such  claim)  or
        withdraws,  amends or  postpones  all or any of such  claim for  Capital
        Allowances,  or the  Lessor  not  treating  the  Ship  Cost  as  capital
        expenditure incurred by it for Tax purposes; or

10.2    the group of  companies  of which the  Lessor  Agent is a member for the
        purposes  of Group  Relief not having  sufficient  profits to absorb Tax
        Losses (calculated on the basis of the Initial Cash Flow) of the Lessor;
        or

10.3    any act or omission of the Lessor  (otherwise than as required by law or
        statute)  which  is a  breach  by the  Lessor  of  any  of  its  express
        obligations  under  any of the  Transaction  Documents  to which it is a
        party; or

10.4    the  Lessor  submitting  its  Corporation  Tax  computations  claims  or
        returns,  as  initially  submitted to any  relevant  Tax  Authority,  or
        preparing its accounts on a basis which is inconsistent  with any of the
        Variable  Assumptions  (as the  same  may be  varied  from  time to time
        pursuant to this  Schedule),  save where required by law, Inland Revenue
        practice or Generally Accepted Accounting Principles,  or not submitting
        its Corporation Tax returns and computations on a timely basis; or

10.5    any  voluntary  act or  omission  by the  Lessor  or any  member  of the
        Lessor's  Group  (other  than  as  required  or   contemplated   by  the
        Transaction  Documents or the Share  Acquisition  Documents) at any time
        after the Delivery  Date,  which  results in the Lessor  ceasing to be a
        member of the Lessor's Group for Group Relief purposes; or

10.6    any Non-Variable Assumption not occurring as a fact.

11      Reference to Expert

11.1    Dispute Procedure

11.1.1  If the Lessee does not accept that any determination  made by the Lessor
        has been made  and/or any  Applicable  Cash Flow (other than the Initial
        Cash Flow) or any adjustment thereto or to the Rental (or any adjustment
        thereto) has been prepared  and/or  calculated  in  accordance  with the
        terms and provisions of this Lease, the Lessee may (without prejudice to
        its  obligations to make payment  hereunder in accordance with such Cash
        Flow  and/or  calculation   pending   determination  of  the  matter  as
        hereinafter  provided)  give  notice to the Lessor  within  thirty  (30)
        Banking  Days of  receiving a copy of such Cash Flow and/or  calculation
        from  the  Lessor   together   with  the   Lessee's   reasons  for  such
        non-acceptance.  As soon as practicable after a notification  under this
        paragraph  11.1.1 by the  Lessee,  if required in writing by the Lessee,
        the  Lessor  and the  Lessee  shall  discuss  with each  other  (and any
        relevant advisors) the determination in question. Such discussions shall
        be conducted  conscientiously and in good faith and shall allow time for
        full consideration of the views of both parties of the issues concerned.

11.1.2  If the Lessor and the Lessee cannot agree the  correctness  or otherwise
        of such  determination  within a further  period of twenty (20)  Banking
        Days  of the  Lessee's  notice  referred  to in  paragraph  11.1.1,  the
        Lessee's reasons together with the Lessor's  determination,  calculation
        and/or Cash Flow  and/or any  adjustment  thereto  and reasons  therefor
        shall then be referred to the  Auditors who shall act as experts and not
        as  arbitrators  and  whose  decision  as to  the  correctness  of  such
        determination and/or calculations and/or Cash Flow and/or any adjustment
        thereto in accordance with the terms of this Lease shall,  except in the
        case of manifest error until the same has been corrected,  or save where
        paragraph 11.1.3 below applies,  be conclusive and binding on the Lessor
        and the Lessee.

11.1.3  If the Auditors consider that the determination of the Lessor relates to
        a matter of law, then the matter (together with the material provided to
        the  Auditors  as  referred  to in  paragraph  11.1.1)  will  instead be
        referred to an independent Queen's Counsel (the "QC") who specialises in
        tax matters and who is acceptable  to the Lessor and the Lessee.  In the
        event that the parties  cannot agree on the  appointment  of the QC then
        the Lessee shall  nominate as the QC one out of three tax counsel chosen
        by the Lessor.

11.1.4  The costs of the  Auditors,  or as the case may be, the QC, in so acting
        shall be borne by the Lessee  unless the  amount(s)  resulting  from the
        finding of the Auditors, or as the case may be, the QC, differs from the
        amount(s)  resulting  from the  determination  made by the  Lessor in an
        amount in excess of  (pound)10,000  in respect of a  calculation  of any
        Termination Sum or  (pound)10,000  in respect of each  determination  or
        calculation of any other amount of Rental in which case the costs of the
        Auditors, or as the case may be, the QC, shall be borne by the Lessor.

11.1.5  The Lessor shall  provide the  Auditors,  or as the case may be, the QC,
        with  such  information  as they or he may  reasonably  require  for the
        purposes of this paragraph 11.1.

11.2    If  the  Lessee   considers  that  the  Lessor  ought  to  have  made  a
        determination  but has not done so,  the  Lessee  may  inform the Lessor
        within twenty (20) Banking Days of the date the Lessee  becomes aware of
        the alleged omission, giving its written reasons why it considers that a
        determination  ought to have been made. For the purposes of paragraph 11
        any  omission by the Lessor to make a  determination  as  specified in a
        notice  under  this   paragraph   11.2,   shall   itself   constitute  a
        determination to which paragraph 11.1 shall apply.

11.3    Adjustments

        Should  the  decision  of the  Auditors,  or as the case may be, the QC,
        require an  adjustment  to an amount  previously  paid  hereunder,  such
        adjustment  shall  apply  retrospectively  from the  date on  which  the
        relevant  amount was paid and the amount of any  deficiency or excess in
        or of such amount  previously  paid by or received by the Lessor  shall,
        within ten (10) Banking Days after  receipt by the Lessor and the Lessee
        of written  notice of the decision and of a revised Cash Flow (which the
        Lessor shall  produce  forthwith  after,  and in  accordance  with,  the
        decision of the Auditors, or as the case may be, the QC), be remedied by
        a payment by or to the Lessor by way of  adjustment to the Rental or any
        adjustment thereto (as appropriate).

11.4    Detail of Calculations

        All  determinations  to be made by the Lessor  under this Lease and this
        Financial  Schedule  shall be made  reasonably  and in good  faith.  All
        calculations  provided by the Lessor to the Lessee under this  Financial
        Schedule shall be made in good faith and in reasonably sufficient detail
        to enable the Lessee to substantiate the same.

<PAGE>

                                   Appendix 1

                                 The Assumptions

1       Variable Assumptions

1.1     The  Lessor  will  become  resident  in  the  UK  for  the  purposes  of
        Corporation Tax on the First UK Meeting Date.

1.2     The first Accounting  Period of the Lessor ("First  Accounting  Period")
        will commence on the First UK Meeting Date.

1.3     The Lessor  will be  treated  under  section  13 CAA as having  incurred
        capital expenditure on the provision of the Ship on the Delivery Date in
        an amount equal to the Ship Cost.

1.4     The Lessor  shall be  entitled to Capital  Allowances  by way of writing
        down  allowances of twenty five per cent (25%) per annum on the reducing
        balance  basis  on  the  full  amount  of the  Ship  Cost  such  Capital
        Allowances  commencing  on the  Delivery  Date in the  First  Accounting
        Period (and in respect of the First Accounting  Period being reduced pro
        rata to the proportion which the length of the First  Accounting  Period
        bears to a period  of  twelve  (12)  months),  in which the Ship Cost is
        treated (on the basis  assumed in paragraph  1.3) to have been  incurred
        and to continue in each subsequent Accounting Period of the Lessor until
        but excluding the Accounting  Period referred to in Variable  Assumption
        1.15.1.

1.5     The rate and times at which Capital  Allowances are obtainable under the
        Tax System at the date  hereof  will not change and  Capital  Allowances
        obtained  by the Lessor in respect of the Ship Cost will not at any time
        be withdrawn or postponed in whole or in part nor,  otherwise than on an
        actual  disposal  or  Total  Loss  of the  Ship,  be made  subject  to a
        balancing charge at any time in so far as the Lessor is concerned.

1.6     The rate of Corporation  Tax for the Financial Year ending 31 March 2002
        and each subsequent financial year will be thirty per cent (30%).

1.7

1.7.1   The Lessor will not be required by law or Generally Accepted  Accounting
        Principles to draw up its accounts as at any other date than 31 December
        in any year and/or for any other period than twelve  months,  except for
        the First Accounting Period.

1.7.2   None of the Group Relief Recipients will be required by law or Generally
        Accepted  Accounting  Principles  to draw up its accounts as at any date
        other than 31  December  in any year  and/or for any other  period  than
        twelve months.

1.7.3   None of the  Lessor  (other  than in  respect  of the  First  Accounting
        Period) and any of the Group Relief  Recipients  will be required by law
        to have  Accounting  Periods  which  are  other  than  twelve  months in
        duration nor will any of them be required to draw up their  accounts for
        periods which do not coincide with the relevant Accounting Period.

1.8     Any  interest  payable  or deemed to be  payable in respect of any funds
        borrowed  or deemed to be  borrowed by the Lessor for the purpose of the
        transactions  contemplated by the Transaction  Documents (as represented
        by Notional  Capital  Outstanding  when that is a negative figure) is or
        would if funds had actually  been  borrowed and interest  actually  been
        payable  been  allowed or, as the case may be, have been  allowable as a
        trading expense.

1.9     The Lessor's  taxable  income,  receipts and outgoings in respect of the
        transactions  contemplated by the Transaction  Documents will fall to be
        assessed and dealt with under Case I of Schedule D.

1.10    The Lessor will be entitled to prepare its Corporation Tax  computations
        (and the Inland Revenue will accept such  computations  as the basis for
        charging Corporation Tax):

1.10.1  insofar as they relate to interest received or paid, on a daily accruals
        basis for the period in respect of which it is received or paid;

1.10.2  insofar as they relate to Primary  Rentals,  on the basis that an amount
        shall be brought into account as income in each Accounting  Period equal
        to the greater of:

                (1)     the  Accountancy  Rental  Earnings  for that  Accounting
                        Period; and

                (2)     the Normal Rent for that Accounting Period;

                PROVIDED THAT

                (A)     if the  Accountancy  Rental  Earnings in any  Accounting
                        Period exceed the Normal Rent for that Accounting Period
                        and there is a Cumulative  Normal Rental Excess for that
                        Accounting Period, the amount to be brought into account
                        for the Accounting Period will be the greater of:

                        (1)     the   Accountancy   Rental   Earnings  for  that
                                Accounting  Period  less the  Cumulative  Normal
                                Rental Excess for that Accounting Period; and

                        (2)     the Normal Rent for that Accounting Period; and

                (B)     if the Normal Rent in any Accounting  Period exceeds the
                        Accountancy  Rental Earnings for that Accounting  Period
                        and there is a Cumulative  Accountancy Rental Excess for
                        that  Accounting  Period,  the amount to be brought into
                        account for that  Accounting  Period will be the greater
                        of:

                        (1)     the  Normal  Rental for that  Accounting  Period
                                less the  Cumulative  Accountancy  Rental Excess
                                for that Accounting Period; and

                        (2)     the   Accountancy   Rental   Earnings  for  that
                                Accounting Period.

1.11    Subject in the case of the First Accounting Period to paragraph 1.34, in
        respect  of the First  Accounting  Period and each  subsequent  relevant
        Accounting  Period of the Lessor,  the Lessor  shall have  received  and
        retained  the  benefit  of relief  for the Tax Loss in  respect  of that
        Accounting Period by reason of either:

1.11.1  a set-off of such Tax Loss  against  other  profits of the Lessor  under
        section 393 and/or 393A ICTA; or

1.11.2  the  surrender  by the  Lessor of such Tax Loss or any part  thereof  in
        accordance  with the  provisions  relating to group relief  contained in
        Chapter  IV Part X and  Schedule  18 ICTA as at the  date of this  Lease
        ("Group Relief") to one or more Group Relief  Recipients and the receipt
        of payments for Group  Relief so  surrendered  on the dates,  and in the
        amounts calculated in accordance with Non-Variable Assumption 2.6.

1.12    In respect of the First Accounting  Period and each relevant  Accounting
        Period  of  the  Lessor  thereafter  and in  respect  of  each  Relevant
        Accounting  Period of any Group  Relief  Recipient,  the Lessor and each
        Group Relief Recipient shall be liable to pay twenty five per cent (25%)
        of the total  Corporation Tax on profits for each such Accounting Period
        on each of 14 July  and 14  October  in that  Accounting  Period  and 14
        January and 14 April following the end of that Accounting Period.

1.13    There will be no change in the Tax  System  affecting  the  transactions
        contemplated by the Transaction Documents after the date hereof.

1.14    In  respect  of  the   transactions   contemplated  by  the  Transaction
        Documents:

1.14.1  the accounts of the Lessor  following the First UK Meeting Date, and any
        Consolidated Group Accounts, will be prepared in accordance with SSAP 21
        on the actuarial after tax basis;

1.14.2 the accounts of the Lessor following the First UK Meeting Date, and any
       Consolidated Group Accounts, will be prepared on the assumption that the
       leasing of the Ship will terminate on the Primary Period End Date;

1.14.3  following the First UK Meeting Date there will be no change in the basis
        on which the Lessor prepares its accounts in respect of the transactions
        contemplated by the Transaction Documents;

1.14.4  if and  as  often  as  Variable  Assumption  1.6 is  varied,  a  one-off
        adjustment will be made to the profit and loss account of the Lessor for
        the earliest Accounting Period then possible to reflect the consequences
        of the  change in the rate of  Corporation  Tax and to  ensure  that the
        treatment  described above in relation to the application of SSAP 21 can
        be applied to subsequent Accounting Periods;

1.14.5  there  will be no change in  Generally  Accepted  Accounting  Principles
        after the date of this Lease.

1.15

1.15.1  the Ship will be sold  during  the  Accounting  Period of the  Lessor in
        which the Primary Period End Date falls;

1.15.2  the Net Sale Proceeds or Net Total Loss Proceeds  required to be brought
        into  account as  Disposal  Value will be not less than the Tax  Written
        Down Value of the Ship at the  commencement of the Accounting  Period of
        the Lessor in which the Termination Payment Date falls;

        (and to the extent that this Variable Assumption 1.15 is satisfied there
        shall be deemed to be available to the Lessor a Capital  Allowance equal
        to such Tax Written Down Value).

1.16    The Lessor will not be required to bring into account as Disposal  Value
        any amount in excess of the  aggregate of Net Sale Proceeds or Net Total
        Loss Proceeds.

1.17    The Lessor  will be subject  to no Tax other  than  Corporation  Tax and
        Value  Added Tax in  respect  of the  transactions  contemplated  by the
        Transaction Documents.

1.18    Subject to  paragraph  1.33 the only  amounts  which the Lessor  will be
        required  to bring  into  account  as income in  calculating  UK taxable
        profits by  reference  to the  leasing  of the Ship will be the  Primary
        Rental payable in accordance  with paragraph 2.1,  interest  received or
        assumed to be received by the Lessor in accordance  with this  Financial
        Schedule,  the Termination Sum (or any adjustment thereto),  any Prepaid
        Rental,  any Disposal  Value,  and any other amount  payable  under this
        Lease expressed to be payable by way of Rental.

1.19

1.19.1  the  Arrangement Fee will be  (pound)243,977.59  and will be incurred on
        the Delivery Date;

1.19.2  the  Lease  Fee will be  (pound)83,536.75  and will be  incurred  on the
        Delivery Date;

1.19.3  the Lessor's  Professional  Costs will be  (pound)93,783.37  and will be
        incurred on the Delivery Date.

1.20    The Arrangement Fee, the Lease Fee and the Lessor's  Professional  Costs
        will be allowable as a trading  expense for  Corporation Tax purposes in
        the First Accounting Period.

1.21    The  "designated  period" (as that  expression is defined in section 106
        CAA):

1.21.1  will commence on the First UK Meeting Date; and

1.21.2  in the  "designated  period",  the Ship  will not be used for a  purpose
        which results in sections 109 or 110 CAA applying.

1.22    The United  Kingdom  will not take part in the Third  Stage and the Euro
        will not replace Sterling as the United Kingdom national currency.

1.23    Chapter 10 of Part 2 CAA does not apply to the Ship.

1.24    Section 225 CAA will not apply to the  transactions  contemplated by the
        Transaction Documents.

1.25    Interest on any late  payment of  Corporation  Tax made by the Lessor in
        respect of this Lease,  and interest on any  Relevant  Amount which is a
        negative  amount is (or would be had it  actually  been  payable  by the
        Lessor) deductible in computing the taxable profits of the Lessor.

1.26    Interest on any  overpayment  of  Corporation  Tax made by the Lessor in
        respect of this Lease,  and interest on any  Relevant  Amount which is a
        positive  amount is (or  would  had it  actually  been  received  by the
        Lessor) taxable in computing the taxable profits of the Lessor.

1.27    The Lessee and the Sub-Lessee  will not elect to include the Ship in the
        tonnage  tax regime (as  referred  to in  schedule 22 of the Finance Act
        2000).

1.28    The  Lessee  will  not  elect to make a  Prepayment  of  Primary  Rental
        pursuant to clause 25.2.1(c).

1.29    That any amounts received or receivable from:

1.29.1  the LC Bank under any Letter of Credit;  1.29.2 the Lessee  Parent under
        the Lessee Parent Guarantee;

1.29.3  any Additional Security Provider under any Additional Security;

        will be  treated in the same way for  Corporation  Tax  purposes  as the
        payments  due under the  Transaction  Documents in respect of which such
        amount  is  received  under the  Letter of  Credit,  the  Lessee  Parent
        Guarantee and any Additional Security.

1.30    The Lessor will become a member of the  Lessor's  Group for the purposes
        of Group Relief on the Delivery Date.

1.31    The First UK Meeting Date will occur on 7 April 2003.

1.32    The Delivery Date will occur on 8 April 2003.

1.33

1.33.1  the Lessor will be treated as commencing a trade of operating leasing on
        the First UK Meeting Date and ceasing such trade on the Delivery Date;

1.33.2  no  Capital  Allowances  will be due to the  Lessor in  respect  of such
        trade;

1.33.3  profit of  (pound)16,814.35  will be earned in respect of such trade and
        (pound)32,757.54 of Tax Loss will be available to shelter such profit.

1.34

1.34.1  in  respect  of the First  Accounting  Period  the  Lessor  will only be
        entitled to surrender a proportion of Tax Loss,  that  proportion  being
        equal to

 Tax Loss x number of days from Delivery Date to end of First Accounting Period
            -------------------------------------------------------------------
            total number of days in the First Accounting Period

1.34.2  the balance (being  (pound)15,943.19) of such Tax Loss shall be eligible
        to be set off as in  paragraph  1.33.3  and to the  extent of any excess
        carried  forward and set against  profits  arising in the finance  lease
        trade of the Lessor in later Accounting Periods.

1.35    the Ship Cost will be (pound)48,778,703.86.

1.36    There  will  be no  liability  to Tax  in  respect  of the  transactions
        contemplated by the Deed of Assignment,  Novation and Waiver (as defined
        in the Share Acquisition Documents).

1.37    The Spot  Exchange  Rate as between  Sterling as the Base  Currency  and
        Dollars as the Other  Currency  on the  Primary  Period End Date for the
        purposes of Non Variable Assumption 2.19 is 1:1.

1.38    The Initial Insurance Premium:

1.38.1  will be (pound)6000;

1.38.2  is incurred on the Delivery Date; and

1.38.3  is deductible as a trading  expense for the purposes of Corporation  Tax
        in the Accounting Period in which it is incurred.

1.39    The  Notional  Capital  Outstanding  on 8  April  2003 is  equal  to the
        aggregate of:

        (a)     (pound)48,778,703.86;

        (b)     the Arrangement Fee;

        (c)     the Lease Fee;

        (d)     the Lessor's Professional Costs; and

        (e)     the Initial Insurance Premium.

2       Non-Variable Assumptions

2.1     On  each  Adjustment  Date  the  Lessor  will  pay or  receive  interest
        calculated  (on a daily  basis  and  using a 365 day  year) on the daily
        balances during each Adjustment  Period of Notional Capital  Outstanding
        calculated at the Assumed Rate.

2.2     The Percentage  Return will be applied to the daily negative balances of
        Notional Capital  Outstanding using a year of 365 days during the period
        from the Delivery  Date until the Final Date and the product is shown in
        the column of the Applicable Cash Flow headed "Margin", each such figure
        being  debited to the Cash Flow on each  Primary  Rental Date and on the
        Final Date.

2.3     All  notional  borrowing by the Lessor of funds in  connection  with the
        transactions of which this Lease forms part shall be deemed to have been
        raised in the  United  Kingdom  on a  sterling  advance  from a bank (as
        defined,  for the purposes of section  349(3)(a)  ICTA,  in section 840A
        ICTA) in  circumstances  where at the time when the interest is paid (or
        deemed to be paid) the person  beneficially  entitled to the interest is
        within the charge to Corporation Tax in respect of the interest and on a
        full recourse basis.

2.4     For the purposes of preparing any Applicable Cash Flow only, it shall be
        assumed that the Primary Rentals and any other amount payable under this
        Lease or the other Transaction Documents and which is taken into account
        in any  Applicable  Cash Flow  will be paid on the due date for  payment
        thereof.

2.5     The Lessor shall have no taxable profits other than any it shall make in
        respect of the  transactions  contemplated by the Transaction  Documents
        and shall be  regarded as having no assets on which  Capital  Allowances
        are available other than the Ship.

2.6     Subject only to there being no change in any Variable  Assumption  which
        affects the  operation  of the  following,  and to paragraph  1.34.1,  a
        single Group Relief Recipient will make to the Lessor payments for Group
        Relief which are calculated and receivable on the following basis:-

        (a)     by applying the provisions of section 403A ICTA to determine how
                much of the Lessor's Tax Loss for any  Accounting  Period of the
                Lessor is available for  surrender to the relevant  Group Relief
                Recipient  for  such  Group  Relief  Recipient's   corresponding
                Accounting  Period  (as  that  expression  is used  in the  said
                section 403A);

        (b)     by assuming that,  with the consent of the Lessor,  the relevant
                Group  Relief  Recipient  makes  such claim as is  necessary  to
                procure that the full amount of such Tax Loss is available to it
                by way of Group Relief;

        (c)     by assuming that the relevant Group Relief Recipient pays to the
                Lessor  by way of  Group  Relief  Payment  amounts  equal to the
                product of:

                (i)     the amount of the Tax Loss in respect of each Accounting
                        Period  of the  Group  Relief  Recipient  assumed  under
                        sub-paragraph  (a) above to have been surrendered by the
                        Lessor; and

                (ii)    the  Corporation  Tax Applicable Rate in relation to the
                        Accounting Period of the Group Relief Recipient to which
                        such Tax Loss was surrendered;

        (d)     by assuming that the relevant Group Relief  Recipient makes each
                payment  referred  to in  sub-paragraph  (c)  above  on the date
                assumed  to be the  date for the  payment  by the  Group  Relief
                Recipient  of  Corporation  Tax on profits in  relation  to that
                Accounting Period in Variable Assumption 1.12.

2.7     No payments or recovery of Value Added Tax will be taken into account in
        any Cash Flow.

2.8     The Lessor will pay the Arrangement  Fee, the Lease Fee and the Lessor's
        Professional Costs.

2.9     Subject  to there  being no change  in the  Variable  Assumptions  which
        affects  the  Lessor  or a Group  Relief  Recipient,  any  Group  Relief
        Recipient  will have an  Accounting  Period which ends on 31 December in
        each year.

2.10    Where it is assumed in any of the  Assumptions or in the  preparation of
        any Cash Flow that an amount is  received  or paid by the  Lessor on any
        date,  an amount  equal to such  receipt  or  payment  shall be shown as
        credited or debited to such Cash Flow on such date.

2.11    The aggregate of any Relevant Amount which is a negative amount together
        with  interest  thereon  at the rate and for the period  referred  to in
        paragraph  4.9.2(b) shall be paid by the Lessor to the Inland Revenue on
        the Tax Payment Date immediately succeeding the Effective Date.

2.12    Interest on any Relevant  Amount which is a negative  amount as referred
        to in  Non-Variable  Assumption  2.11 shall be deemed to be  interest on
        underpaid Corporation Tax payable by the Lessor to the Inland Revenue.

2.13    Any Relevant  Amount which is a positive amount shall be received by the
        Lessor  together  with  interest  thereon at the rate and for the period
        referred to in paragraph  4.9.2(c) on the Tax Payment  Date  immediately
        succeeding the monthly anniversary of the Effective Date.

2.14    The amount of any  interest on any  Relevant  Amount which is a positive
        amount as referred to in Non-Variable Assumption 2.13 shall be deemed to
        be interest on overpaid Corporation Tax payable by the Inland Revenue to
        the Lessor.

2.15    The Lessor will not be entitled to Capital  Allowances or any other form
        of Tax relief in respect of the Ship Cost at a rate of more than  twenty
        five per cent. (25%) per annum on a reducing balance basis.

2.16    Immediately following the completion of the acquisition by the Purchaser
        of the shares of the Lessor pursuant to the Share Acquisition Documents,
        a meeting of the board of directors of the Lessor will be held in the UK
        (the "First UK Meeting Date") and all subsequent board meetings at which
        major and  strategic  decisions  relating  to the  Lessor's  business or
        affairs will be taken and subject to any Bermudan law  requirements  all
        general  meetings  of the  Lessor  will  be held  within  the UK and all
        corporate  books and accounts  relating to the Lessor's  affairs will be
        maintained in the UK.

2.17    At the meeting  referred to in  Non-Variable  Assumption  2.16 above and
        after the First UK Meeting Date, at least a majority of the directors of
        the Lessor will be UK residents and at least a majority of the directors
        of the Lessor will be physically  present in the UK at board meetings of
        the Lessor.

2.18    Subject to there being no change in any Variable  Assumption  which will
        affect the Lessor,  after the First UK Meeting Date the Lessor will draw
        up its accounts for periods ending on 31 December in each year.

2.19    The Lessor will pay a fee of the Sterling  Equivalent  of $12,000 on the
        Primary Period End Date or, if earlier,  the Termination Date and no Tax
        relief will be available in respect of such fee.

<PAGE>

                                   Appendix 2

                              The Initial Cash Flow

<PAGE>

                                   Appendix 3

                             The Initial Tax Report

<PAGE>

                                   Appendix 4

                               Reserve Asset Rate

The Reserve Asset Rate for any Adjustment  Period or other relevant period shall
mean the annual percentage rate of interest derived from the following formula:

                             XL + S (L-D) + 0.01 x F
                            -------------------------
                                  100 - (X + S)

Where:

        "X"     is the amount required to be held as a non-interest bearing cash
                ratio  deposit  with  the  Bank of  England  or  other  relevant
                authority expressed as a percentage of an eligible institution's
                eligible liabilities (above any stated minimum);

        "L"     is LIBOR for the relevant Interest Period;

        "S"     is the amount required to be placed as special deposits with the
                Bank of  England or other  relevant  authority,  expressed  as a
                percentage  of an eligible  institution's  eligible  liabilities
                (above any stated minimum);

        "F"     is the amount of Sterling per  (pound)1,000,000  of the fee base
                of an authorised  institution  payable to the Financial Services
                Authority per annum  (disregarding any minimum fee payable under
                the Fees Regulations);

        "D"     is the lower of L and the rate of interest per annum paid by the
                Bank of England or other relevant  authority on special deposits
                at or about 11.00 am on the date of calculation;

PROVIDED THAT:

        (a)     for the  purposes  of  calculating  the  Reserve  Asset  Rate in
                accordance with this Appendix 4:

                (i)     X, L, S and D are included in the formula as numbers and
                        not as percentages (for example, if X=0.15 per cent. and
                        L=7 per cent., XL is calculated as 0.15 x 7;

                (ii)    the  formula is applied on the first day of each  period
                        for  which  is falls to be  calculated  (and the  result
                        shall apply for the duration of such period);

                        (A)     each  amount is rounded up to the  nearest  four
                                decimal places;

                        (B)     if the formula  produces a negative  percentage,
                                the percentage shall be taken as zero;

        (b)     if alternative or additional financial  requirements are imposed
                by the Bank of England,  the Financial Services Authority or any
                other United Kingdom  governmental  authority or agency which in
                the Lessor's  opinion  makes the formula no longer  appropriate,
                the  Lessor  shall  be  entitled  by  notice  to the  Lessee  to
                stipulate  such other  formula as shall be  suitable to apply in
                substitution  for  the  formula.   Any  such  other  formula  so
                stipulated  shall take  effect in  accordance  with the terms of
                such notice; and

        (c)     for the purposes of this Appendix 4:

                (i)     "authorised" and  "institution"  have the meanings given
                        to those terms in the Banking Act 1987;

                (ii)    "Bank of  England  Act"  means the Bank of  England  Act
                        1998;

                (iii)   "eligible  institution"  has the  meaning  given to that
                        term in schedule 2 to the Bank of England Act;

                (iv)    "eligible  liabilities"  has the  meaning  given to that
                        term in the Cash Ratio Deposits  (Eligible  Liabilities)
                        Order 1998 or the applicable substitute order made under
                        the  Bank of  England  Act as in  force  on the  date of
                        application of the formula;

                (v)     "fee base" has the meaning given to the term in the Fees
                        Regulations;

                (vi)    "Fees Regulations" means the Banking  Supervision (Fees)
                        Regulations   2000   or   the   applicable    substitute
                        regulations made under the Bank of England Act as are in
                        force on the date of application of the formula; and

                (vii)   "special deposits" has the meaning given to that term by
                        the Bank of  England on the date of  application  of the
                        formula.

<PAGE>

                                   Appendix 5

                             Initial Security Table

<PAGE>

                                   Appendix 6

                             Extra Security Amounts

Security Period                                            Amount
15 July 03 to 14 October 03                                85,814
15 October 03 to 14 January 04                            182,281
15 April 04 to 14 July 04                                  25,302
15 July 04 to 14 October 04                               140,819
15 October 04 to 14 January 05                            239,893
15 April 05 to 14 July 05                                  65,933
15 July 05 to 14 October 05                               181,044
15 October 04 to 14 January 06                            279,015
15 July 06 to 14 October 06                               105,054
15 October 06 to 14 January 07                            198,574
15 July 07 to 14 October 07                                42,325
15 October 07 to 14 January 08                            138,227
15 October 08 to 14 January 09                             87,635
15 October 09 to 14 January 10                             44,813
15 October 10 to 14 January 11                              6,741
15 July 22 to 14 October 22                                   352
15 October 22 to 14 January 23                             17,424

<PAGE>

                                   Schedule 5

                          Forms of Loss Payable Clause

Hull and Machinery (Marine and War Risks)

By a charterparty  by way of demise made the [o] day of April 2003 between Golar
Gimi  (Bermuda)  Limited (whose name is to be changed to Sovereign Gimi Limited)
(the "Lessor") and Golar Gas Holding Company, Inc. (the "Lessee") the Lessor has
demise chartered the Ship to the Lessee.

By a sub  charterparty  by way of demise made the [o] day of April 2003  between
the Lessee and Golar Gimi UK Ltd. (the "Sub-Lessee"),  the Lessee has sub-demise
chartered the Ship to the Sub-Lessee.

All recoveries under this policy shall be applied as follows:

        (a)     all claims  hereunder in respect of an actual or constructive or
                compromised  or arranged total loss shall be paid in full to the
                Lessor;

        (b)     all claims in respect  of a major  casualty  (that is to say any
                casualty  the claim in respect  of which  exceeds  five  million
                Dollars  ($5,000,000)  (or  the  equivalent)  inclusive  of  any
                deductible) shall be paid in full to the Lessor; and

        (c)     all  other  claims  hereunder  shall  be  paid  in  full  to the
                Sub-Lessee  or to its order  unless and until the  Lessor  shall
                have notified insurers hereunder to the contrary,  whereupon all
                such claims shall be paid to the Lessor.

Protection and Indemnity Risks

Payment of any recovery which Golar Gimi (Bermuda)  Limited (whose name is to be
changed to Sovereign Gimi Limited) (the "Lessor") or Golar Gas Holding  Company,
Inc. (the "Lessee") or Golar Gimi UK Ltd. (the "Sub-Lessee") is entitled to make
out of the  funds of the  Association  in  respect  of any  liability,  costs or
expenses incurred by the Lessor, the Lessee and the Sub-Lessee, shall be paid to
the person to whom the liability (or alleged liability) covered by the entry was
incurred or to the extent that the  liability  (or  alleged  liability)  to such
person  has  previously  been  discharged  by the  Lessor,  the  Lessee  and the
Sub-Lessee, such moneys shall be paid to the Lessor or its order or, as the case
may be, the Lessee or its order or, as the case may be,  the  Sub-Lessee  or its
order in  reimbursement  of the moneys so expended by it in satisfaction of such
liability  (or alleged  liability),  unless and until the  Association  receives
notice to the contrary from the Lessor in which event all  recoveries due to the
Lessee and the Sub-Lessee shall thereafter be paid to the Lessor;  provided that
no liability  whatsoever shall attach to the Association,  its Managers or their
agents for failure to comply with the latter obligations until the expiry of two
clear  Banking  Days from the receipt of such  notice.  The  Association  shall,
unless it receives from the Lessor notice to the contrary,  be at liberty at the
request of the Lessee and the  Sub-Lessee  to provide bail or other  security to
prevent the arrest or obtain the release of the vessel, without liability to the
Lessor.

<PAGE>

                                   Schedule 6

                         Form of Compliance Certificate

                   Compliance Certificate issued pursuant to a
  Lease Agreement dated [o] April 2003 in respect of m.v. "GIMI" (the "Lease")

I, [o], the Chief  Financial  Officer of Golar Gas Holding  Company,  Inc.  (the
"Lessee"), hereby certify that:

1       Attached hereto are the latest [Annual Financial Statements]  [Quarterly
        Financial  Statements]  for the [o] period ended on [o] (the  "Reference
        Date").  Such financial  statements  [were  prepared in accordance  with
        Relevant  GAAP] [were not prepared in accordance  with Relevant GAAP and
        attached  hereto is a statement of the full  details of the  adjustments
        required to in such statements to reflect  Relevant GAAP as necessary to
        calculate the amounts referred to in paragraph 2 below].

2       Attached hereto is a statement of the respective amounts of:

        o       the Cash Balances and Minimum Free Available Cash

        o       Current Assets,  Current  Liabilities and the current portion of
                long-term debt

        o       Annualised EBITDA and Interest Expense

        o       Net Debt,

        as at, and for each relevant period ended on, the Reference Date.

3      The Lessee has complied with each of the financial undertakings set out
       in clause 11.1.9 of the Lease and is not in default in the performance or
       observance of any of such covenants [specify any exceptions].

4       As at [date] no Relevant  Event has occurred and is continuing  [specify
        any exceptions].

5       The person executing this certificate on our behalf has full information
        concerning our financial  affairs and has executed the same after having
        made due investigation and enquiry as to the accuracy of the information
        herein contained.

Terms used herein and not otherwise  defined  herein shall have the meanings set
forth in the said Lease. This certificate is rendered pursuant to clause 11.1.11
of the Lease.

IN WITNESS WHEREOF, the undersigned has set his hand this [o] day of [o] [20o].

GOLAS GAS HOLDING COMPANY INC.

By:  ..........................
     Chief Financial Officer

SIGNED by                        )
GOLAR GIMI (BERMUDA) LIMITED     )    .......................................
                                      Name:
                                      Title:

SIGNED by                        )
GOLAR GAS HOLDING COMPANY, INC.  )    .......................................
                                      Name:
                                      Title:Dated                     2005
                         ------------------------------

                         GOLAR GAS HOLDING COMPANY, INC.                     (1)

                                   (Borrower)

                        BANKS AND FINANCIAL INSTITUTIONS                     (2)
                               referred to herein
                                    (Lenders)

                              NORDEA BANK NORGE ASA
                                DnB NOR BANK ASA
                         CITIGROUP GLOBAL MARKET LIMITED
                          FORTIS BANK (NEDERLAND) N.V.                       (3)
                                (Lead Arrangers)

                              NORDEA BANK NORGE ASA                          (4)
                       (Facility Agent and Security Agent)

                              NORDEA BANK NORGE ASA
                         CITIGROUP GLOBAL MARKET LIMITED
                                DnB NOR BANK ASA                             (5)
                                 (Book Runners)

                                       and

                             NORDEA BANK FINLAND PLC                         (6)
                              (Documentation Agent)

                         ------------------------------
                               FACILITY AGREEMENT
                        for a $300,000,000 Senior Secured
                                    Term Loan
                         ------------------------------

                                                                     NORTON ROSE

<PAGE>

                                    Contents

Clause                                                                      Page

1      Purpose and definitions.................................................1

2      The Commitments and the Loan...........................................20

3      Interest...............................................................21

4      Repayment and prepayment...............................................23

5      Fees commission and expenses...........................................26

6      Payments and taxes; accounts and calculations..........................27

7      Representations and warranties.........................................30

8      Undertakings...........................................................35

9      Conditions.............................................................53

10     Events of Default......................................................53

11     Indemnities............................................................57

12     Unlawfulness and increased costs.......................................58

13     Set-off, pro rata payments.............................................60

14     Accounts...............................................................61

15     Transfer and lending office............................................63

16     Facility Agent, Security Agent and Reference Banks.....................66

17     Notices and other matters..............................................66

18     Governing law and jurisdiction.........................................68

Schedule 1 The Banks and their Commitments....................................69

Schedule 2 The Ships..........................................................70

Schedule 3 Form of Drawdown Notice............................................73

Schedule 4 Documents and evidence required as conditions precedent
         (referred to in clause 9)............................................74

Schedule 5 Repayment Schedule.................................................78

Schedule 6 Form of Transfer Certificate.......................................79

Schedule 7 Calculation of Additional Cost.....................................83

Schedule 8 Form of officer's certificate
           (referred to in clause 8.1.5(b)(iv))...............................85

<PAGE>

THIS AGREEMENT is dated           March 2005 and made BETWEEN:

(1)    GOLAR GAS HOLDING COMPANY, INC. (a Liberian corporation) as Borrower;

(2)    NORDEA BANK NORGE ASA, DnB NOR BANK ASA,  CITIGROUP GLOBAL MARKET LIMITED
       and FORTIS BANK (NEDERLAND) N.V. as Lead Arrangers;

(3)    the banks and  financial  institutions  whose names and addresses are set
       out in Schedule 1 as lenders;

(4)    NORDEA BANK FINLAND PLC, London Branch as Documentation Agent;

(5)    NORDEA BANK NORGE ASA as Facility Agent;

(6)    NORDEA BANK NORGE ASA as Security Agent; and

(7)    CITIGROUP  GLOBAL MARKET LIMITED,  NORDEA BANK NORGE ASA and DnB NOR BANK
       ASA as Book Runners.

IT IS AGREED as follows:

1      Purpose and definitions

1.1    Purpose

       This  Agreement  sets out the terms and  conditions  upon and  subject to
       which the Banks agree,  according to their several  obligations,  to make
       available  to the  Borrower  a term loan of up to three  hundred  million
       Dollars  ($300,000,000)  to (a) refinance  the Previous  Facility and the
       Previous  Second  Facility,  (b) to pay fees  and  expenses  incurred  in
       connection  with this Agreement and (c) to provide for the Borrower's and
       the Golar LNG Group's general corporate and working capital purposes.

1.2    Definitions

       In this Agreement, unless the context otherwise requires:

       "Account  Bank" means Nordea Bank Norge ASA acting  through its office at
       P.O.  Box 1166,  Sentrum,  0107 Oslo,  Norway  (in  respect of one of the
       Earnings  Accounts)  and Nordea Bank Finland Plc,  London  Branch  acting
       through its office at 55 Basinghall  Street,  London EC2V 5NB (in respect
       of the other Earnings Accounts) and includes any other bank designated in
       writing by the Facility  Agent (at the request of the Borrower and acting
       on the  instructions  of the Majority  Banks) to be an "Account Bank" for
       the purposes of the Security  Documents (whether generally or in relation
       to a specific Earnings Account);

       "Additional  Cost"  means,  in  relation  to  any  period,  a  percentage
       calculated  for such period at an annual rate  determined  in  accordance
       with Schedule 7;

       "Additional  Lease  Security  Amount" means the amount of any  additional
       security  from time to time to be provided by the Borrower (or the Parent
       or any other member of the Golar Gas Group)  pursuant to clause 25 or any
       other relevant  provision of the relevant Lease  Agreement,  after having
       first obtained the prior written  consent of the Banks pursuant to clause
       8.3.13;

       "Affiliate"  of any specified  person means any other person  directly or
       indirectly  controlling,  or  controlled  by, or under direct or indirect
       common control with such specified person;

       "Agency  Agreement"  means the  agency and trust  agreement  of even date
       herewith  executed or (as the context may require) to be executed between
       (among  others) the Lead  Arrangers,  the  Facility  Agent,  the Security
       Agent, the Banks, the Borrower and the Guarantors in the agreed form;

       "A&L" means  Alliance & Leicester plc, a company  incorporated  under the
       laws of England with its  registered  office at 49 Park Lane,  London W1K
       1EQ, England;

       "Annual Financial Statements" means annual:

       (a)    financial statements of each Bareboat Charterer;

       (b)    consolidated financial statements of the Golar LNG Group;

       each  comprising a profit and loss  account and a balance  sheet and cash
       flow statement and audited by the Auditors; and

       (c)    unaudited consolidated management accounts of the Golar Gas Group;

       "Annualised  EBITDA"  means at any relevant date the EBITDA for the three
       (3) month period ending on such date multiplied by four (4);

       "Applicable  Security  Amount"  means the amount from time to time of the
       Applicable Security Amount as defined in each of the Lease Agreements;

       "Approved  Brokers"  means, in relation to a Ship, such firm of insurance
       brokers, appointed by its Bareboat Charterer, as may from time to time be
       approved  in  writing  by the  Facility  Agent for the  purposes  of this
       Agreement;

       "Approved Charter" means, in relation to a Ship, the time charterparty in
       respect of such Ship details of which are specified in part 2 of schedule
       2 and any  future  charter  in  respect  of  such  Ship  entered  into in
       accordance   with  clause  8.4.15  and  including  any   extensions   and
       replacements  thereof  pursuant  to the  terms  thereof  approved  by the
       Security Agent, and including any other charters approved by the Security
       Agent for the purposes of this  Agreement and "Approved  Charters"  means
       all of such approved charters;

       "Approved  Charterer" means, in relation to a Ship, the person who is the
       charterer  or  employer  of such Ship under an  Approved  Charter of such
       Ship;

       "Approved Management Agreement" means, in relation to each Ship:

       (a)    as at the Drawdown  Date in respect of such Ship,  the  management
              agreement between the relevant Bareboat  Charterer and the Manager
              thereof  providing  (inter  alia) for the  Manager to provide  the
              technical  management of (inter alia) such Ship,  details of which
              are specified in Part 2 of Schedule 2; and

       (b)    any future management agreement relative (inter alia) to that Ship
              entered into by the relevant  Bareboat  Charterer with an Approved
              Manager on terms  previously  approved by the Facility Agent (such
              approval not to be unreasonably withheld);

       "Approved Manager" means, in relation to a Ship:

       (a)    with effect from the  Drawdown  Date in respect of such Ship,  the
              Manager  for that Ship  (including,  but not limited to, any other
              manager  or  sub-manager  to whom the  Manager  may  delegate  its
              management  of such Ship on terms,  inter  alia,  that the Manager
              remains wholly  responsible as principal to the relevant  Bareboat
              Charterer  for  the due  performance  of the  relevant  management
              obligations); or

       (b)    any other entity  appointed with the prior written  consent of the
              Facility Agent as manager or sub-manager of such Ship;

       "Auditors"  means  PricewaterhouseCoopers  or another first class firm of
       international accountants;

       "Banking  Day" means a day on which  dealings  in deposits in Dollars are
       carried on in the London  Interbank  Eurocurrency  Market and (other than
       Saturday or Sunday) on which banks are open for  business in London,  New
       York City and Oslo (or any other  relevant  place of payment under clause
       6);

       "Banks" means the banks and financial  institutions  listed in Schedule 1
       and includes their successors in title and assignees and transferees;

       "Bareboat  Charter"  means,  in  relation  to a Ship a  bareboat  charter
       entered into between the  Borrower and its relevant  Bareboat  Charterer,
       and "Bareboat Charters" means all of such bareboat charters;

       "Bareboat   Charterer"   means,   in  relation  to  a  Ship  the  company
       incorporated in England and Wales whose registered  office is at 30 Marsh
       Wall, London E14 9TP and whose name is set forth against the name of such
       Ship in  column  (c) of the  table  part 1 of  schedule  2 and  "Bareboat
       Charterers" means all of such bareboat charterers;

       "Bareboat  Charterer's  Earnings"  means,  in relation  to each  Bareboat
       Charterer, the Earnings payable to such Bareboat Charterer;

       "Bareboat  Charterer's  Guarantee"  means,  in  relation  to a Ship,  the
       guarantee  executed (or as the context may require) to be executed by the
       relevant Bareboat Charterer in favour of the Security Agent in the agreed
       form and "Bareboat Charterers' Guarantees" means all of such guarantees;

       "Bareboat Earnings" means, in relation to each Ship, the Earnings payable
       by the Bareboat  Charterer of such Ship to the Borrower under or pursuant
       to the  relevant  Bareboat  Charter  and/or  any  moneys  payable  to the
       Borrower under any guarantee,  security or other  assurance  given to the
       Borrower  at any time in respect  of the  relevant  Bareboat  Charterer's
       obligations under or pursuant to such Bareboat Charter;

       "Book  Runners"  means each of Nordea  Bank  Norge ASA of P.O.  Box 1166,
       Sentrum, 0107 Oslo, Norway, Citigroup plc 33 Canada Square, Canary Wharf,
       London E14 5LB and DnB NOR Bank ASA of Stranden 21, N-0021 Oslo, Norway;

       "Borrower" means Golar Gas Holding Company,  Inc., a company incorporated
       in  Liberia  whose  registered  office is at 80 Broad  Street,  Monrovia,
       Liberia;

       "Borrowed Money" means Indebtedness incurred in respect of:

       (a)    money borrowed or raised and debit balances at banks;

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

       (c)    acceptance or documentary credit facilities;

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

       (e)    deferred  payments  for assets or  services  acquired  (other than
              assets or  services  acquired  on normal  commercial  terms in the
              ordinary  course of business  where payment is deferred by no more
              than one hundred and eighty (180) days);

       (f)    Capitalised Lease Obligations;

       (g)    any other transaction  (including  without limitation forward sale
              or  purchase   agreements)  having  the  commercial  effect  of  a
              borrowing or raising of money;

       (h)    guarantees in respect of Indebtedness of any person falling within
              any of (a) to (g) above; and

       (i)    preference  share  capital in the  Borrower or any other member of
              the  Golar Gas Group  which is or may be  redeemable  prior to the
              Final  Repayment  Date and/or the full and final  discharge of all
              Indebtedness and liabilities of the Borrower under this Agreement;

       "Breakage Costs" shall have the meaning ascribed to it in clause 11.1;

       "capital expenditure" means expenditure incurred in:

       (a)    improving, upgrading or refurbishing any of the Ships or any other
              vessels or other fixed assets of the Golar Gas Group;

       (b)    the acquisition of buildings,  plant, machinery,  vessels or other
              fixed tangible assets of the Golar Gas Group or other  expenditure
              which is to be treated as capital  expenditure in accordance  with
              the  Relevant  GAAP   including   Capitalised   Lease   Obligation
              commitments

       but does not include  expenditure on repairing or maintaining  any of the
       Ships or any other vessels or other fixed assets;

       "Capitalised  Lease Obligation" of any person means the obligation to pay
       rent or other payment  amounts under a lease of (or other  Borrowed Money
       arrangements  conveying the right to use) real or personal property which
       is required to be classified and accounted for as a capitalised  lease or
       a liability on the face of a balance  sheet of such person in  accordance
       with the  Relevant  GAAP (in the case of the Lease  Agreements  net of an
       amount equal to the aggregate of the Applicable  Security  Amounts or any
       Additional Lease Security Amount);

       "Casualty  Amount"  means  five  million  Dollars  ($5,000,000)  (or  the
       equivalent  in any other  currency)  or, if the  context so  requires  in
       respect of any single  refurbishment  of the Ship to be undertaken by the
       Borrower  or, as the case may be,  the  Bareboat  Charterer,  during  the
       period of twenty four (24) months from the date of this Agreement,  eight
       million Dollars ($8,000,000);

       "Charter Guarantee" means, in relation to a Ship:

       (a)    as at the date  hereof,  any  guarantee  in respect of the current
              Approved  Charter  of that Ship  which is  specified  in part 2 of
              Schedule 2; and

       (b)    any  other  guarantee,  letter  of  credit,  Encumbrance  or other
              security given by any person to the relevant Bareboat Charterer or
              (as the case may be) the Borrower in respect of the obligations of
              the Approved Charterer under an Approved Charter of that Ship;

       "Charter  Guarantor"  means,  in relation  to a Ship,  any person who has
       given a Charter Guarantee to the relevant  Bareboat  Charterer or (as the
       case may be) the Borrower;

       "Classification"  means, in relation to each Ship, the classification set
       forth  against  the name of such  Ship in part 1 of  Schedule  2 with its
       Classification Society or such other classification as the Facility Agent
       shall, at the request of the relevant Bareboat  Charterer or (as the case
       may be) the  Borrower,  have  agreed in  writing  shall be treated as the
       Classification   of  such  Ship  for  the  purposes  of  this  Agreement;
       "Classification   Society"   means,   in  relation   to  any  Ship,   the
       classification  society set forth against the name of such Ship in part 1
       of Schedule 2 or such other  classification  society  which the  Facility
       Agent shall, at the request of the relevant Bareboat Charterer or (as the
       case may be) the Borrower, have agreed in writing shall be treated as its
       Classification Society for the purposes of this Agreement;

       "Commitment"  means,  in relation to a Bank,  the amount set out opposite
       its name in Schedule 1 or, as the case may be, in any  relevant  Transfer
       Certificate, as reduced by any relevant term of this Agreement;

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

       "Contribution"  means, in relation to a Bank, the principal amount of the
       Loan owing to such Bank at any relevant time;

       "control" when used with respect to any person means either the ownership
       of more  than  fifty  per cent  (50%) of the  voting  share  capital  (or
       equivalent rights of ownership) of such person or the power to direct the
       management and policies of such person,  directly or indirectly,  whether
       through the ownership of voting securities, by contract or otherwise, and
       the terms "controlling" and "controlled" shall be construed accordingly;

       "Creditors"  means the Lead Arrangers,  the Facility Agent,  the Security
       Agent and the Banks;

       "Current  Assets" means, on a consolidated  basis, the current assets (as
       determined in accordance with the Relevant GAAP) of the Golar Gas Group;

       "Current  Liabilities"  means,  on  a  consolidated  basis,  the  current
       liabilities  (less the current  portion of  long-term  debt,  the current
       portion of long-term  capital lease  obligations  and mark to market swap
       valuations)  (as determined in accordance  with the Relevant GAAP) of the
       Golar Gas Group;

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

       "Disposal  Repayment  Amount" shall have the meaning  ascribed thereto in
       clause 4.4;

       "Disposal  Repayment  Date"  shall have the meaning  ascribed  thereto in
       clause 4.4;

       "Documentation Agent" means Nordea Bank Finland Plc, London branch acting
       through its office at 55 Basinghall Street, London EC2V 5NB;

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

       "Drawdown Date" means the date on which the Loan is drawn down;

       "Drawdown  Notice" means a notice  substantially in the terms of Schedule
       3;

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

       "Earnings  Account"  means any of the  accounts  of the  Borrower  or any
       Bareboat Charterer of any Ship or all of the Bareboat  Charterers with an
       Account Bank  designated in writing by the Facility Agent (at the request
       of the Borrower or (where an existing Earnings Account is to be closed by
       the relevant  Account Bank) the Facility  Agent and in either case acting
       on the  instructions of the Majority Banks) to be an Earnings Account for
       the  purposes of the  Security  Documents  (and  includes  any fixed term
       deposit contract or account  associated with such account and/or arranged
       through the Account Bank as contemplated  by clause  14.1.2(c)) and which
       is subject to an effective Encumbrance in favour of the Security Agent as
       security  for the  obligations  of the Borrower  under this  Agreement in
       accordance  with  clause  14 and  "Earnings  Accounts"  means all of such
       accounts and fixed term deposit contracts and/or accounts;

       "Earnings Account Security" means a deed of assignment or charge executed
       or (as the context may require) to be executed by any person in favour of
       the  Security  Agent in respect of (inter  alia) an  Earnings  Account as
       security for the  obligations of the Borrower under this Agreement in the
       agreed form or in such other form as the  Facility  Agent may  reasonably
       require for the purpose of creating  effective security over such account
       under any applicable laws;

       "EBITDA" means, for any period,  the earnings before interest,  taxes and
       depreciation and amortisation  (calculated as income from operations plus
       any depreciation and amortisation, Interest Expense, and taxes on overall
       net income  deducted in calculating  income from operations in respect of
       such period) of the Golar Gas Group  determined  in  accordance  with the
       Relevant GAAP on a consolidated basis;

       "Eligible  Swap  Contract"  means any swap  contracts  entered or (as the
       context  shall  require) to be entered  into between the Borrower and the
       Swap Banks upon and pursuant to any swap  confirmation made or to be made
       by the Borrower and  incorporating  the terms and  conditions of any ISDA
       Master Agreement made between the Borrower and each of the Swap Banks for
       the purpose of swapping for and/or  capping to a fixed  interest rate the
       Borrower's  exposure  under  this  Agreement  to  fluctuations  in Dollar
       interest  rates and  "continuing  Eligible Swap Contract"  means,  at any
       relevant  time, an Eligible  Swap Contract  under which any party thereto
       has or may have continuing actual or contingent obligations at such time;

       "Eligible Swap Liabilities" means Swap Liabilities owing to any Swap Bank
       incurred under an Eligible Swap Contract;

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

       "Environmental  Approval"  means any consent,  authorisation,  licence or
       approval  of any  governmental  or public body or  authorities  or courts
       applicable   to  any  vessel  or  its   operation   required   under  any
       Environmental Law;

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

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

       "Equity  Distribution"  means,  in  relation  to a  person,  any  of  the
       following:

       (a)    the  purchase,  redemption or other  acquisition  for any value by
              such person or any  Subsidiary  of such person of any  ordinary or
              preference shares of such person's share capital;

       (b)    the repayment,  redemption or acquisition for value by such person
              or any  Subsidiary  of such  person  of any  other  form of Equity
              Finance received or raised by such person; or

       (c)    the declaration or payment of any dividend,  interest,  commission
              or other  costs or  charges  of a  periodic  nature in  respect of
              Equity Finance or the distribution of any of such person's present
              or future assets,  undertakings,  rights or revenues to any of its
              shareholders;

       "Equity Finance" means:

       (a)    the issue for cash of ordinary shares in the Borrower;

       (b)    the issue for cash of  preference  shares in the  Borrower  (other
              than preference share capital which constitutes  Borrowed Money of
              the Borrower);

       (c)    the incurring of Subordinated Debt; or

       (d)    any combination of the foregoing;

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

       "Facility  Agent" means Nordea Bank Norge ASA of P.O. Box 1166,  Sentrum,
       0107 Oslo, Norway or such other person as may be appointed Facility Agent
       for the Banks pursuant to the Agency Agreement;

       "Faraway"  means  Faraway  Maritime  Shipping  Company  Limited a company
       incorporated  in Liberia whose  registered  office is at 80 Broad Street,
       Monrovia, Liberia;

       "Final  Repayment  Date"  means,  subject to clause  6.4,  the final date
       specified in the table in Schedule 5;

       "Flag State" means, in relation to each Ship, the United  Kingdom,  or in
       relation to the Ship known as "Golar Spirit",  the Marshall  Islands,  or
       such other state or territory as the Banks may approve, at the request of
       the relevant Bareboat  Charterer,  as being the "Flag State" of such Ship
       for the purposes of the Security Documents;

       "Free Available  Cash" means, at any relevant time, the aggregate  amount
       credited to and/or invested in Earnings  Accounts,  freely  available for
       use by the  Borrower  and/or any of the  Bareboat  Charterers  which may,
       notwithstanding  any Encumbrance,  right of set-off or agreement with any
       other party,  be withdrawn  and/or encashed and used by it for any lawful
       purpose without restriction (save pursuant to the Security Documents);

       "Golar Gas Group" means the Borrower,  the Bareboat  Charterers and their
       respective Subsidiaries (other than Oxbow, Golar Maritime and Faraway);

       "Golar LNG  Group"  means the  Parent  and its  Subsidiaries  and for the
       purposes  of  the  definitions  of  "Annual  Financial   Statements"  and
       "Quarterly  Financial  Statements" (and the expression  "Golar LNG Group"
       where used in such  definitions) any company or entity whose accounts are
       to be  consolidated  with those of the Parent in accordance with Relevant
       GAAP shall be treated as a Subsidiary of the Parent;

       "Golar Maritime" means Golar Maritime (Asia) Inc. a company  incorporated
       in  Liberia  whose  registered  office is at 80 Broad  Street,  Monrovia,
       Liberia;

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

       "Guarantees"  means each of the Bareboat  Charterers'  Guarantees and the
       Parent Guarantee and "Guarantee" means any of them;

       "Guarantor"  means any of the  Parent  and the  Bareboat  Charterers  and
       "Guarantors" means all of them;

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

       "Insurances"  means,  in relation to any Ship, all policies and contracts
       of insurance (which  expression  includes all entries of such vessel in a
       protection and indemnity or war risks association) which are from time to
       time during the Security  Period in place or taken out or entered into by
       or for the benefit of, inter alia, the relevant Owner and/or the Borrower
       and/or the Bareboat  Charterer (whether in the sole name of such Owner or
       in the joint names of such Owner,  the Borrower,  Bareboat  Charterer and
       any other  person)  in  respect of such Ship or  otherwise  howsoever  in
       connection with such Ship and all benefits thereof  (including  claims of
       whatsoever nature and return of premiums);

        "Interest  Period" means,  in relation to the Loan,  each period for the
       calculation of interest in respect of the Loan  ascertained in accordance
       with clauses 3.2 and 3.3;

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

       "ISPS Code" means the International  Ship and Port Facility Security Code
       constituted   pursuant  to  Resolution  A.924(22)  of  the  International
       Maritime  Organisation  and  incorporated  into the Safety of Life at Sea
       Convention  and includes any  amendments  or  extensions  thereto and any
       regulation issued pursuant thereto;

       "Latest  Drawdown  Date"  means 30 April  2005 or such  later date as the
       Banks in their absolute discretion agree in writing;

       "L/C Bank" means  Bayerische  Landesbank,  a German company acting out of
       its London  branch at 13/14  Appold  Street,  London  EC2A 2NB,  Canadian
       Imperial Bank of Commerce,  a Canadian  company  acting out of its London
       branch at Cottons  Centre,  Cottons Lane,  London SE1 2QL and,  where the
       context so requires, such other bank as may replace the L/C Bank pursuant
       to the Lease Agreements;

       "L/C Deposit Account" means,  with respect to each Lease  Agreement,  the
       account opened by the Borrower with the L/C Banks into which the relevant
       L/C Deposit has been paid;

       "L/C Deposit Money" means, with respect to each L/C Deposit Account, each
       cash deposit  placed by the Borrower in the relevant L/C Deposit  Account
       as security for the Borrower's  obligations under the Lease Agreement and
       any moneys accruing to such account;

       "L/C Deposit Surplus" means, with respect to each L/C Deposit, any amount
       which  may from  time to time  accrue by way of a  financial  benefit  as
       contemplated by the Approved  Charters and which is surplus to the amount
       required by the Borrower to  discharge  its  obligations  under the Lease
       Agreements  and which  would,  but for the  provisions  of  clause  14.2,
       otherwise  be payable  to the  Borrower  or such  other  person as it may
       direct;

       "L/C Deposit Surplus Account" means any account or accounts opened by the
       Borrower with the Account Bank for the purpose of holding any L/C Deposit
       Surplus in accordance with the provisions of clause 14.2;

       "L/C  Documents"  means each of the Letters of Credit  together  with the
       deposit  agreement  and  deposit  charge,  guarantee  and  indemnity  and
       reimbursement  agreement  entered  into  between  the  Borrower  and  the
       relevant L/C Bank in relation thereto;

       "Lead Arrangers"  means Nordea Bank Norge ASA of P.O. Box 1166,  Sentrum,
       0107 Oslo,  Norway,  DnB NOR Bank ASA of Stranden 21, 0021 Oslo,  Norway,
       Citigroup Global Market Limited of 33 Canada Square, Canary Wharf, London
       E14 SLB and Fortis Bank (Nederland)  N.V., Oslo Branch of  Munkedamsveien
       53b, 0250 Oslo, Norway and "Lead Arranger" means any of them;

       "Lease Agreement" means, in relation to a Ship:

       (a)    prior to a Standby Ship  Disposition,  the lease agreement dated 8
              April  2003  entered  into  between  the  relevant  Lessor and the
              Borrower (as lessee thereunder); and

       (b)    following a Standby Ship Disposition, the relevant Standby Lease,

       and "Lease Agreements" means all such lease agreements;

       "Lease Documents" means, for the purposes of this agreement,  each of the
       Lease Agreements and the guarantees relating thereto issued by the Parent
       in favour of the relevant Lessors;

       "Lessor" means, in relation to a Ship, the party listed opposite the name
       of that  Ship in  column  (b) of the  table in part 1 of  schedule  2 and
       "Lessors" means all of such companies;

       "Lessor Parent Support  Letter" means, in relation to a Ship, the support
       letter  issued or (as the  context  may  require)  to be issued by A&L in
       favour of the  Security  Agent with  respect to the  relevant  Lessor and
       "Lessor Parent Support Letters" means all such support letters;

       "Letter of Credit"  means,  with respect to each Ship, a letter of credit
       issued by the relevant L/C Bank in favour of the relevant  Lessor whereby
       the L/C Bank has secured certain  payment  obligations of the Borrower to
       the Lessor under the  relevant  Lease  Agreement  and "Letters of Credit"
       means all such letters of credit;

       "LIBOR" means, in relation to a particular  period, the rate for deposits
       of  Dollars  for a period  equivalent  to such  period  at or about 11 am
       (London  time) on the second  London  Banking Day before the first day of
       such  period  as  displayed  on  Telerate  page  3750  (British  Bankers'
       Association Interest Settlement Rates) (or such other page as may replace
       such page 3750 on such system or on any other  system of the  information
       vendor for the time being designated by the British Bankers'  Association
       to calculate the BBA Interest  Settlement Rate (as defined in the British
       Bankers' Association's  Recommended Terms and Conditions ("BBAIRS" terms)
       dated  August,  1985)),  provided that if on such date no such rate is so
       displayed,  LIBOR for such period shall be the  arithmetic  mean (rounded
       upward if  necessary to four  decimal  places) of the rates  respectively
       quoted  to the  Facility  Agent  by each of the  Reference  Banks  at the
       request of the Facility Agent as such  Reference  Bank's offered rate for
       deposits  of  Dollars in an amount  approximately  equal to the amount in
       relation to which LIBOR is to be  determined  for a period  equivalent to
       such period to prime banks in the London  Interbank Market at or about 11
       am (London  time) on the second  Banking Day before the first day of such
       period;

       "Loan" means the aggregate principal amount borrowed,  or to be borrowed,
       by the Borrower on the Drawdown  Date or (as the context may require) the
       aggregate principal amount owing to the Banks under this Agreement at any
       relevant time;

       "London  Banking Day" means a day on which banks are open for business in
       London;

       "Loss Payable  Clauses"  means the  provisions  regulating  the manner of
       payment of sums receivable under the Insurances of a Ship which are to be
       incorporated  in the  relevant  insurance  documents,  such Loss  Payable
       Clauses to be in the forms set out in schedule 1 to the Proceeds Deeds or
       in such other  forms as may from time to time be agreed in writing by the
       Facility Agent;

       "Majority  Banks" means Banks the aggregate of whose  Commitments  exceed
       sixty six and two thirds per cent.  (66(2)/3%)  of the Total  Commitments
       save  that,  where  the  Commitments  of a  single  Bank  exceed,  or the
       aggregate  Commitments  of  Banks  which  are  Affiliates  of each  other
       together  exceed,  sixty six and two thirds per cent.  (66(2)/3%)  of the
       Total  Commitments,  "Majority  Banks" shall mean Banks the  aggregate of
       whose  Commitments  exceed  the  Commitment  of such  single  Bank or the
       aggregate of the  Commitments  of such Banks who are  Affiliates  of each
       other;

       "Manager" means Golar  Management  (UK) Limited of 30 Marsh Wall,  London
       E14 9TP, England;

       "Manager's  Undertaking"  means,  in  relation  to a Ship,  an  agreement
       entered or (as the context may  require) to be entered  into  between the
       Approved Manager of such Ship and the Security Agent in the agreed form;

       "Margin" means one per cent. (1%);

       "Marshall Island Conditions" means each of the following:

       (a)    originals  of the  duly  executed  Mortgage  over  "Golar  Spirit"
              (governed  by the law of the  Marshall  Islands)  and the Security
              Assignment relating to such Mortgage  (together,  the "Re-flagging
              Documents");

       (b)    any  consents to the  Re-flagging  which may be required  from any
              party under the Proceeds Deed or otherwise;

       (c)    in relation to each of the parties to the  Re-flagging  Documents,
              certified  true  copies  of  resolutions  of each of its  board of
              directors approving such of the Re-flagging  Documents to which it
              is or is to be a party and authorising the signature, delivery and
              performance of each such party's obligations thereunder,  together
              with  originals  or  certified  copies of any  powers of  attorney
              issued  by any  party  pursuant  to  such  resolutions,  or  other
              evidence  acceptable  to  the  Security  Agent  (in  its  absolute
              discretion) of valid delegation of signing authority;

       (d)    documentary evidence that:

              (i)    the  "Golar  Spirit"  is   definitively   and   permanently
                     registered  in the name of the  relevant  Lessor  under the
                     Marshall Islands flag;

              (ii)   the Reflagging  Documents have been registered  against the
                     "Golar Spirit" on the Marshall Islands register;

              (iii)  the "Golar  Spirit"  is in the  absolute  and  unencumbered
                     ownership  (other  than  Permitted   Encumbrances)  of  the
                     relevant Lessor;

              (iv)   the "Golar  Spirit"  maintains  the class +1A1,  Tanker for
                     Liquefied Gas  (-163(degree)C,  0.5 ton/m3, 0.7 kg/cm2, DAT
                     -10(degree)): MV+KV, EO with Det Norske Veritas free of all
                     overdue    recommendations    and    conditions   of   such
                     Classification Society; and

              (v)    each  of the  insurers/brokers  in  respect  of the  "Golar
                     Spirit"'s  insurances have confirmed that such Ship remains
                     insured and will remain  insured  with/through  them on the
                     same terms as  required by the terms of this  Agreement  at
                     the time of and following the re-flagging;

       (e)    a favourable legal opinion from Holland & Knight LLP in respect of
              Marshall  Islands'  law  confirming  (inter alia) the validity and
              registration of the Re-flagging  Documents under Marshall  Islands
              law; and

       (f)    any  further  opinions,  consents,  agreements  and  documents  in
              connection with the Re-flagging Documents which the Security Agent
              may request by notice to the Borrower;

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

       "Mortgage" means, in relation to a Ship:

       (a)    prior to a Standby Ship  Disposition,  a first priority  statutory
              British  ship  mortgage  of such  Ship and the  deed of  covenants
              collateral thereto to be executed by the relevant Lessor in favour
              of the  Borrower  (in its  capacity as lessee) and with respect to
              the Ship  known as "Golar  Spirit"  in the event that such Ship is
              reflagged in accordance with the terms of this Agreement,  a first
              preferred  Marshall  Islands  ship  mortgage to be executed by the
              relevant  Lessor in favour of the  Borrower  (in its  capacity  as
              lessee); and

       (b)    after a  Standby  Ship  Disposition,  a first  priority  statutory
              mortgage  of such Ship and deed of  covenants  collateral  thereto
              each  executed by the Standby  Purchaser in favour of the Security
              Agent in an agreed form,

       and "Mortgages" means all of such mortgages and collateral deeds;

       "Net  Debt"  means,  on a  consolidated  basis,  an  amount  equal to the
       aggregate  of all  Borrowed  Money of the  Golar  Gas  Group  other  than
       Subordinated Debt minus Free Available Cash;

       "Net Sale Proceeds"  means, in relation to a Ship, the sale price of such
       ship  receivable  by the  relevant  Owner (after  deducting  the relevant
       Owner's   reasonable  costs  and   out-of-pocket   expenses  incurred  in
       connection  with such  sale  including  reasonable  and  proper  costs of
       drydocking the relevant ship and carrying out any repairs on the ship for
       the purposes of complying  with its  obligations  under the relevant sale
       agreement);

       "Notices of Assignment" means, in relation to a Ship, the various notices
       of assignment and  acknowledgements  in the forms set out in the relevant
       schedules to the relevant Security Assignment, Three Party Deed and other
       Security  Documents  (as  applicable)  or, in such other form as may from
       time to time be required or agreed in writing by the Facility Agent;

       "Operating  Costs" means, in relation to any Ship during any period,  all
       moneys paid by or on behalf of the Borrower or the Bareboat  Charterer of
       such Ship during such period in respect of:

       (a)    liabilities  incurred  for the  purpose  of  operating  such  Ship
              including costs of manning, insuring,  repairing,  maintaining and
              drydocking such Ship in accordance  with the  requirements of this
              Agreement, the Lease Agreements and any Approved Charters;

       (b)    all proper and reasonable  expenses of managing and  administering
              the corporate affairs of such Bareboat Charterer;

       (c)    any  remuneration  of the Approved  Manager of such Ship under the
              Approved Management Agreement for such Ship;

       (d)    amounts  incurred by way of capital  expenditure  on the  relevant
              Ship which is permitted under clause 8.3.2;

       (e)    amounts required to discharge  liabilities or obligations to third
              parties  incurred in the ordinary  course of the operation of such
              Ship;

       (f)    the  repair or making  good any loss or  damage  arising  out of a
              casualty  to  the  Ship  or  any  collision,   accident  or  other
              circumstances  resulting in death or personal injury to any person
              and/or damage to any property or economic interests; and

       (g)    any  amount  equal to the  approved  proportion  of any proper and
              reasonable  costs and expenses of managing and  administering  the
              corporate  affairs of the Borrower  (and,  for this  purpose,  the
              approved  proportion  shall be such proportion as may from time to
              time be approved in writing by the Facility Agent having regard to
              the number of vessels owned by, or bareboat  chartered to, members
              of the Golar Gas Group);

       "Owner" mean, with respect to each Ship:

       (a)    prior to a Standby Ship Disposition, the relevant Lessor; and

       (b)    following a Standby Ship Disposition, the Standby Purchaser;

       "Oxbow" means Oxbow Holdings Inc. a company  incorporated  in the British
       Virgin  Islands  whose  registered  office is at PO Box 3321,  Road Town,
       Tortola, British Virgin Islands;

       "Parent"  means Golar LNG Ltd. a company  incorporated  in Bermuda  whose
       registered  office  is  at  Par-la-Ville  Place,  14  Par-la-Ville  Road,
       Hamilton HM08, Bermuda;

       "Parent  Guarantee"  means the  guarantee  issued or (as the  context may
       require) to be issued by the Parent in favour of the Security Agent in an
       agreed form;

       "Permitted Encumbrance" means:

       (a)    any  Encumbrance  created or existing  pursuant to the Transaction
              Documents  (which  for  this  purpose  shall  be  the  Transaction
              Documents as defined in the Proceeds Deed); and

       (b)    Permitted Liens;

       "Permitted  Liens" means, to the extent not yet required to be discharged
       pursuant to the terms of the relevant Mortgage:

       (a)    any ship repairer's or outfitter's possessory lien in respect of a
              vessel  owned or bareboat  chartered  by a member of the Golar Gas
              Group or the  Bareboat  Charterers  provided  that (i) the lien on
              such vessel is for an amount not  exceeding  two  million  Dollars
              ($2,000,000), (ii) all such liens (including the relevant lien) on
              all  vessels  owned by  members of the Golar Gas Group at the time
              such lien arises or is  conferred by contract are for an aggregate
              amount not exceeding an amount equal to the product of two million
              Dollars  ($2,000,000)  multiplied  by the  number  of Ships at the
              relevant  time and (iii) no such lien shall be deemed a  Permitted
              Lien if it is incurred at a time when a Default has  occurred  and
              is  continuing  until  such  time  as  the  Default  is no  longer
              continuing;

       (b)    any  ship  repairer's  lien or  outfitter's  possessory  lien  not
              falling within paragraph (a) of this definition but which has been
              previously approved in writing by the Majority Banks;

       (c)    any lien on a vessel for  current  master's,  officer's  or crew's
              wages outstanding in the ordinary course of trading; and

       (d)    any lien for salvage;

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

       "Port of Registry" means, in relation to each Ship, the port (if any) set
       forth against the name of such Ship in Part 1 of schedule 2 or such other
       port of registry  (if any) in a Ship's Flag State  approved in writing by
       the Facility Agent acting on the  instructions of the Banks at which such
       Ship is, or is to be registered  on, or at any relevant  time after,  the
       date hereof;

       "Pounds",  "Sterling" and the symbol  "(pound)" means the lawful currency
       for the time being of the United Kingdom;

       "Previous  Facility" means the two hundred and sixty five million Dollars
       ($265,000,000)  term loan made  available by certain  banks and financial
       institutions pursuant to a loan agreement dated 8 April 2003;

       "Previous  Second  Facility"  means the second  priority  credit facility
       dated 8 April 2003 between,  amongst others, the Borrower and Nordea Bank
       Norge ASA in its capacity as agent for certain other banks;

       "Proceeds  Account" means, in relation to a Ship, the Dollar and Sterling
       accounts opened by the Lessor with the Proceeds  Account Bank pursuant to
       and in  accordance  with  clause 2.8 of the  relevant  Proceeds  Deed and
       "Proceeds Accounts" means all such accounts;

       "Proceeds  Account  Assignment"  means, in relation to each Account,  the
       account  charge or  assignment  (as the case may be) entered into between
       the  Borrower  (as lessee) in favour of the  Security  Agent in an agreed
       form and "Proceeds Account Charges" means all such charges;

       "Proceeds Account Bank" means Nordea Bank Finland plc, London Branch;

       "Proceeds Deed" means, in relation to each Ship, the deed of proceeds and
       priorities between the Security Agent, the relevant Lessor, the Borrower,
       the Standby Purchaser, and the Proceeds Account Bank with respect to such
       Ship to be entered into on or about the date hereof and "Proceeds  Deeds"
       means all such proceeds and priority deeds;

       "Quarterly Financial Statements" means quarterly:

       (a)    financial statements of each Bareboat Charterer;

       (b)    consolidated financial statements of the Golar LNG Group; and

       (c)    consolidated management accounts of the Golar Gas Group;

       prepared as at 31 March,  30 June and 30 September  (but not 31 December)
       in each year (or three,  six or nine (but not  twelve)  months  after the
       commencement  of the Borrower's  accounting  period should its accounting
       reference date be changed, with the prior written consent of the Facility
       Agent  (acting  on the  instructions  of the  Banks)  from  31  December)
       comprising a profit and loss account and a balance  sheet and a cash flow
       statement;

       "Quiet Enjoyment  Letter" means, in relation to each Ship (other than the
       "GOLAR  SPIRIT"),  each letter entered or (as the context may require) to
       be entered into between the relevant Lessor (or, following a Standby Ship
       Disposition,  the Standby Purchaser), the Borrower, the relevant Bareboat
       Charterer,  the Security Agent and the relevant Approved Charterer; in an
       agreed form, and "Quiet Enjoyment Letters" means all such letters;

       "Reference Banks" means Nordea Bank Norge ASA, DnB NOR Bank ASA, Citibank
       N.A. and Fortis Bank  (Nederland) N.V. and/or any other Bank appointed as
       such pursuant to the Agency Agreement;

       "Registry" means, in relation to each Ship, such registrar,  commissioner
       or  representative  of the relevant Flag State who is duly authorised and
       empowered to register the relevant  Ship,  the relevant  Owner's title to
       such  Ship  and the  relevant  Mortgage  under  the  laws and flag of the
       relevant Flag State;

       "Relevant GAAP" means accounting principles, concepts, bases and policies
       generally  adopted and accepted in the respective  jurisdiction  in which
       the  Borrower,  the  Bareboat  Charterers  and the Parent are required to
       produce and file accounts from time to time;

       "Relevant  Fraction"  shall  mean for the  purpose of the  definition  of
       "Relevant Insured Amount",  clause 4.2.1 and clause 4.4, a fraction whose
       numerator is the market value of the relevant Ship and whose  denominator
       is the  aggregate of the market  values of all the Ships which remain the
       subject of a Security  Assignment or any Mortgage  granted by the Standby
       Purchaser (including such Ship) at the relevant date;

       "Relevant Insured Amount" means, in relation to a Ship as at any relevant
       date, an amount in Dollars equal to the Relevant Fraction as at such date
       of the Loan as at such date;

       "Relevant  Jurisdiction"  means  any  jurisdiction  in which or where any
       Security  Party is  incorporated,  resident,  domiciled,  has a permanent
       establishment,  carries on, or has a place of  business  or is  otherwise
       effectively connected;

       "Repayment  Dates" means,  subject to clause 6.4, the dates  specified in
       the table in schedule 5;

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

       "Rollover Date" means the last day of an Interest Period;

       "Security  Agent" means  Nordea Bank Norge ASA of P.O. Box 1166  Sentrum,
       0107,  Oslo,  Norway or such other  person as may be  appointed  security
       agent and trustee for the Banks pursuant to the Agency Agreement;

       "Security  Assignment"  means,  in  relation  to  a  Ship,  the  security
       assignment  entered or (as the  context may  require) to be entered  into
       between  the  Borrower  and  the  Security  Agent  with  respect  to  the
       Borrower's right, title and interest in, to and under the relevant Lease,
       the relevant Proceeds Account  Assignment and the relevant Mortgage in an
       agreed form and "Security Assignments" means all such assignments;

       "Security  Documents"  means  this  Agreement,  the  Proceeds  Deed,  the
       Mortgages,   the  Security  Assignments,   the  Three  Party  Deeds,  the
       Subsidiary Pledges, the Guarantees,  the Agency Agreement,  the Manager's
       Undertakings,  the Quiet Enjoyment Letters,  the Subordination  Deed, any
       Earnings Account Security, the Lessor Parent Support Letters, the Standby
       Purchaser Assignment,  the Standby Purchaser Share Security and any other
       documents  as may have been or shall  from time to time after the date of
       this Agreement be executed to guarantee and/or secure all or any part of,
       any  moneys  from time to time  owing by the  Borrower  pursuant  to this
       Agreement (whether or not any such document also secures moneys from time
       to time owing  pursuant  to any other  document or  agreement)  or by any
       other person;

       "Security  Party"  means any member of the Golar LNG Group who may at any
       time be a party to any of the Security Documents;

       "Security  Period"  means  the  period  commencing  on the  date  of this
       Agreement and so long as any moneys are owing,  actually or contingently,
       under the Security Documents and while all or any part of the Loan or the
       Commitments remain outstanding;

       "Ships" means each of the ships listed in Part 1 of schedule 2 and "Ship"
       means any of them;

       "Solvent" means with respect to any person on a particular  date, that on
       such  date (a) the fair  market  value of the  assets  of such  person is
       greater than the total amount of  liabilities  (including  the present or
       expected value of contingent liabilities) of such person, (b) the present
       fair  saleable  value of the assets of such  person is  greater  than the
       amount  that will be  required to pay the  probable  liabilities  of such
       person for its debts as they become absolute and matured, (c) such person
       is  able  to  realise  upon  its  assets  and pay  its  debts  and  other
       liabilities,  including contingent obligations,  as they mature, (d) such
       person does not have unreasonably  small capital and (e) such person does
       not intend to or believe it will incur debts beyond its ability to pay as
       they mature;

       "Standby  Lease" means with respect to a Ship,  the Standby Lease defined
       in the relevant Proceeds Deed;

       "Standby  Purchaser"  means LNG Shipping  Co., a Cayman  Islands  company
       having its registered  office at P.O. Box 694 GT, CIBC Financial  Centre,
       11 Dr. Roys Drive, George Town, Grand Cayman, Cayman Islands;

       "Standby  Purchaser  Account Bank" means Nordea Bank Finland plc,  London
       Branch in such capacity;

       "Standby  Purchaser  Assignment" means, in relation to a Ship, entered or
       (as the  context  may  require)  to be entered  into  between the Standby
       Purchaser and the Security Agent  containing an assignment by the Standby
       Purchaser  of its rights,  title and  interests  in and to the  earnings,
       insurance  and  requisition  compensation  in  respect  of the Ship,  the
       Standby  Purchaser  Proceeds  Accounts and the Standby Lease and "Standby
       Purchaser Assignments" means all such assignments.

       "Standby  Purchaser Dollar Proceeds Account" means such Dollar account of
       the Standby  Purchaser with the Standby  Purchaser Account Bank which the
       parties hereto may agree shall be the "Standby  Purchaser Dollar Proceeds
       Account" for the purposes of the Proceeds Deed;

       "Standby  Purchaser Proceeds Accounts" means the Standby Purchaser Dollar
       Proceeds Account and the Standby Purchaser  Sterling Proceeds Account and
       "Standby Purchaser Proceeds Account" means either of them;

       "Standby Purchaser Shareholder" means Canadian Imperial Bank of Commerce;

       "Standby  Purchaser Share Security" means the share charge entered or (as
       the context may require) to be entered into between the Standby Purchaser
       Shareholder and the Security Agent  containing a first priority charge by
       the Standby Purchaser  Shareholder of its rights,  title and interests in
       and to the shares in respect of the Standby Purchaser;

       "Standby Purchaser Sterling Proceeds Account" means such Sterling account
       of the Standby  Purchaser with the Standby  Purchaser  Account Bank which
       the parties  hereto may agree shall be the  "Standby  Purchaser  Sterling
       Proceeds Account" for the purposes of the Proceeds Deed;

       "Standby  Ship  Disposition"  shall have the meaning given thereto in the
       relevant Proceeds Deed;

       "Subordinated Debt" of a person means any Indebtedness of the Borrower or
       any of its  Subsidiaries  which is a Security  Party  owing to the Parent
       which is subject to the Subordination Deed;

       "Subordination Deed" means a deed entered or (as the context may require)
       to be entered into between the  Guarantors,  the Borrower,  Gotaas-Larsen
       Shipping Corporation and the Security Agent in the agreed form;

       "Subsidiary"  of a  person  means  any  company  or  entity  directly  or
       indirectly controlled by such person and a "wholly owned Subsidiary" of a
       person  means a  Subsidiary  which has no members  except such person and
       that person's wholly owned Subsidiaries and its or their nominees;

       "Subsidiary  Pledge"  means,  in  relation to a Bareboat  Charterer,  the
       pledge of all of the  issued  stock of such  company  entered  or (as the
       context may  require) to be entered  into by the Manager in favour of the
       Security  Agent in an agreed form and  "Subsidiary  Pledges" means all of
       such pledges;

       "Swap  Banks"  means DnB NOR Bank ASA,  Nordea Bank Norge ASA,  Citibank,
       N.A. and Fortis Bank  (Nederland  N.V.) and includes their  successors in
       title and assignees and transferees;

       "Swap  Liabilities"  means  Indebtedness  incurred  in  respect of swaps,
       forward exchange  contracts,  futures and other  derivatives (but so that
       when calculating the value of any derivative transaction, only the marked
       to market value shall be taken into account) and guarantees in respect of
       such Indebtedness;

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

       "Three  Party Deed"  means,  in relation to a Ship, a three party deed in
       respect of such Ship  executed  or (as the  context  may  require)  to be
       executed by the Borrower and the relevant Bareboat Charterer in favour of
       the Security Agent in an agreed form and "Three Party Deeds" means all of
       such three party deeds;

       "Total  Commitments"  means,  at any  relevant  time,  the  total  of the
       Commitments of all the Banks at such time;

       "Total Loss" in relation to a Ship means:

       (a)    actual,  constructive,  compromised or arranged total loss of such
              vessel; or

       (b)    the Compulsory Acquisition of such vessel; or

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

       (d)    the expiry of one  hundred  and eighty  (180) days (or such longer
              period as the  Borrower  and the  Security  Agent may agree) after
              such vessel shall have been requisitioned for hire by a Government
              Entity or other competent authority, whether dejure or de facto;

       "Total Loss  Proceeds"  means,  in respect of a Ship, the proceeds of any
       policy or contract of  insurances  arising in respect of a Total Loss and
       any  Requisition   Compensation  received  in  respect  of  a  Compulsory
       Acquisition;

       "Total Loss Repayment  Date" means, in relation to a Ship, the date which
       is the earlier of:

       (a)    the date one hundred and twenty  (120) days after such ship became
              a Total Loss or such later date as may be agreed in writing by the
              Facility Agent (acting on the  instructions of the Majority Banks)
              if they are satisfied that the relevant Ship was properly  insured
              at the time of such  Total  Loss and that  insurance  proceeds  in
              respect of such Total Loss will be recovered in amounts sufficient
              to enable the Borrower to comply with its  prepayment  obligations
              under clauses 4.4 of this  Agreement  arising as a consequence  of
              such  Total  Loss  and  will be  applied  in  accordance  with the
              Security Documents by the later date so agreed; and

       (b)    the date upon which insurance proceeds or Requisition Compensation
              in  respect  of such  Total  Loss  are  received  by the  relevant
              Bareboat Charterer (or the Security Agent as the relevant Bareboat
              Charterer's assignee pursuant to the relevant Three Party Deed);

       "Transaction  Documents" means  collectively the Approved  Charters,  the
       Bareboat Charters and the Approved Management Agreements;

       "Transfer  Certificate" means a transfer  certificate for the purposes of
       clause 15.3  substantially  in the form set out in schedule 6 (or in such
       other form as the Banks may approve or require); and

       "Transferee  Bank" and "Transferor  Bank" shall have the meaning ascribed
       to those expressions in clause 15.3.

1.3    Insurance terms

       In clause 8.4.1:

1.3.1  "excess  risks"  means  the  proportion  (if any) of claims  for  general
       average,  salvage and salvage  charges and under the  ordinary  collision
       clause not  recoverable  in  consequence  of the value at which a Ship is
       assessed for the purpose of such claims exceeding her insured value;

1.3.2  "protection  and indemnity  risks" means the usual risks  (including  oil
       pollution)   covered  by  a  United  Kingdom   protection  and  indemnity
       association or a protection and indemnity association which is managed in
       the  United  Kingdom  or  Norway  (including,   without  limitation,  the
       proportion (if any) of any sums payable to any other person or persons in
       case of collision which are not recoverable  under the hull and machinery
       policies  by  reason  of the  incorporation  therein  of  Clause 8 of the
       Institute Time Clauses (Hulls) (1/11/95) or the Institute Amended Running
       Down  Clause  (1/10/71)  or any  equivalent  provision)  or (if placed on
       Norwegian  terms) means  protection and indemnity risks as defined in the
       Norwegian Marine Insurance Plan of 1996 as amended; and

1.3.3  "war risks"  includes those risks covered by the standard form of English
       marine  policy with  Institute War and Strikes  Clauses - Time  (1/11/95)
       attached or similar cover or (if placed on Norwegian terms) means the war
       risks  described  in the  Norwegian  Marine  Insurance  Plan  of  1996 as
       amended.

1.4    Accounting terms

       All accounting  terms not otherwise  defined in this Agreement shall have
       the meanings  assigned to them in accordance  with Relevant GAAP (whether
       or not such is indicated in this Agreement).

1.5    Headings

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

1.6    Construction of certain terms

       In any Security Document unless the context otherwise requires:

1.6.1  references  to clauses and schedules are to be construed as references to
       clauses of, and schedules to, such  Security  Document and  references to
       such Security Document include its schedules;

1.6.2  references to (or to any specified provision of) any Security Document or
       any other  document  shall be construed as  references  to such  Security
       Document,  that provision or that document as in force for the time being
       and as amended in accordance with terms thereof,  or, as the case may be,
       with the agreement of the relevant parties and (where such consent is, by
       the terms of any Security Document or the relevant document,  required to
       be  obtained as a condition  to such  amendment)  with the consent of the
       Facility Agent;

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

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

1.6.5  references to a time of day are to London time;

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

1.6.7  references to any person includes such person's  assignees and successors
       in title;

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

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

1.7    Majority Banks

       Where  this  Agreement  provides  for  any  matter  to be  determined  by
       reference  to the opinion of the  Majority  Banks or to be subject to the
       consent or request of the Majority Banks or for any action to be taken on
       the instructions of the Majority Banks, such opinion, consent, request or
       instructions shall (as between the Banks) only be regarded as having been
       validly given or issued by the Majority Banks if all the Banks shall have
       received  prior  notice of the  matter on which  such  opinion,  consent,
       request or  instructions  are  required to be obtained  and the  relevant
       majority  of Banks  shall have  given or issued  such  opinion,  consent,
       request or  instructions  but so that the Borrower shall be entitled (and
       bound) to assume that such notice  shall have been duly  received by each
       Bank  and  that  the  relevant  majority  shall  have  been  obtained  to
       constitute Majority Banks whether or not this is in fact the case.

1.8    Agreed forms

       In this  Agreement,  any  document  expressed  to be "in the agreed form"
       means  a  document  in  a  form  agreed  by  (and  for  the  purposes  of
       identification  signed by or on behalf of) the  Borrower and the Facility
       Agent or (in the case of any of the other Security  Documents) a document
       in the form  actually  executed by both the  relevant  Security  Party or
       relevant Security Parties and the Security Agent.

1.9    Meaning of "associate" and "acting in concert"

       For the purposes of this Agreement:

1.9.1  any question  whether a person is an associate of another person is to be
       determined  in accordance  with the  following  provisions of this clause
       (any  provision  that a person is an  associate  of another  person being
       taken to mean that they are associates of each other);

1.9.2  a  person  is an  associate  of an  individual  if  that  person  is  the
       individual's husband or wife or is a relative,  or the husband or wife of
       a relative, of the individual or of the individual's husband or wife;

1.9.3  a person is an  associate  of any person with whom he is in  partnership,
       and of the husband or wife or a relative of any  individual  with whom he
       is in partnership;

1.9.4  a person is an  associate  of any person whom he employs or by whom he is
       employed;

1.9.5  a person in his  capacity  as  trustee of a trust  (other  than a pension
       scheme or an employees'  share scheme) is an associate of another  person
       if the  beneficiaries  of the  trust  include,  or the terms of the trust
       confer a power  that may be  exercised  for the  benefit  of,  that other
       person or an associate of that other person;

1.9.6  a company or other entity is an associate of another company or entity:

       (a)    if the same person has control of both, or a person has control of
              one and persons who are his associates,  or he and persons who are
              his associates, have control of the other; or

       (b)    if a group of two or more  persons has control of each  company or
              other entity, and the groups either consist of the same persons or
              could be regarded as  consisting  of the same  persons by treating
              (in one or more  cases) a member of either  group as replaced by a
              person of whom he is an associate;

1.9.7  a company is an associate of another  person if that person is a director
       of or has  control  of it or if  that  person  and  persons  who  are his
       associates together have control of it;

1.9.8  any two or more persons acting together to secure or exercise  control of
       a company or other entity shall be treated in relation to that company or
       other entity as  associates of each other and of any person acting on the
       instructions of any of them to secure or exercise  control of the company
       or other entity,

1.9.9  for the purposes of this clause 1.9:

       (a)    a person is a relative of an individual if he is that individual's
              brother,  sister,  uncle, aunt, nephew,  niece, lineal ancestor or
              lineal descendant, treating:

              (i)    any relationship of the half blood as a relationship of the
                     whole  blood  and the  stepchild  or  adopted  child of any
                     person as his child; and

              (ii)   an illegitimate child as the legitimate child of his mother
                     and reputed father;

       and any  references  in this  Agreement  to a husband  or wife  include a
       former husband or wife and a reputed husband or wife;

       (b)    any  director or other  officer of a company or other entity is to
              be treated as employed by that company or other entity;

1.9.10 a person is to be taken as having  control of a company  or other  entity
       if:

       (a)    that  person  owns more than  fifty per cent.  (50%) of the voting
              share capital (or equivalent  rights of ownership) of such company
              or entity; or

       (b)    such person has the power to direct the policies and management of
              such company or entity by contract or otherwise

       and  where  two or more  persons  together  satisfy  either  of the above
       conditions,  they are to be taken as having  control  of the  company  or
       entity; and

1.9.11 persons acting in concert comprise persons who,  pursuant to an agreement
       or  understanding  (whether  formal or  informal),  actively  co-operate,
       through the  acquisition  by any of them of shares in a company to obtain
       or  consolidate  control  over  ten per  cent.  (10%)  or more of (i) the
       ordinary  share  capital or (ii) the voting  rights  attributable  to the
       ordinary  share capital of that company and for this purpose  persons who
       are  associates  of each other shall be presumed to be persons  acting in
       concert unless the contrary is  demonstrated  to the  satisfaction of the
       Agent.

2      The Commitments and the Loan

2.1    Amount

       Upon and subject to the terms and  conditions  of this  Agreement  and in
       reliance on the  representations  and  warranties  in clause 7, the Banks
       agree to lend to the Borrower the  principal  sum of up to three  hundred
       million  Dollars  ($300,000,000).  The obligation of each Bank under this
       Agreement shall be to contribute that proportion of the Loan which, as at
       the Drawdown Date, its Commitment bears to the Total Commitments.

2.2    Obligations several

       The  obligations  of each Bank  under this  Agreement  are  several;  the
       failure of any Bank to perform  such  obligations  shall not  relieve any
       other Bank, the Lead Arrangers, the Facility Agent, the Security Agent or
       the Borrower of any of their respective  obligations or liabilities under
       this Agreement nor shall the Lead  Arrangers,  the Facility Agent, or the
       Security Agent be responsible for the obligations of any Bank (except for
       its own obligations, if any, as a Bank) nor shall any Bank be responsible
       for the obligations of any other Bank under this Agreement.

2.3    Interests several

       Notwithstanding  any other term of this Agreement (but without  prejudice
       to the  provisions of this Agreement  relating to or requiring  action by
       the Majority  Banks) the  interests of the Lead  Arrangers,  the Facility
       Agent, the Security Agent and the Banks are several and the amount due to
       the Lead Arrangers,  the Facility Agent, the Security Agent (each for its
       own  account) and to each Bank is a separate and  independent  debt.  The
       Lead Arrangers, the Facility Agent, the Security Agent and any Bank shall
       have the right to protect  and  enforce  its rights  arising  out of this
       Agreement  and it shall  not be  necessary  for the Lead  Arrangers,  the
       Facility Agent, the Security Agent or any Bank (as the case may be) to be
       joined as an additional party in any proceedings for this purpose.

2.4    Drawdown

       Subject to the terms and conditions of this Agreement,  the Loan shall be
       made to the Borrower  following  receipt by the  Facility  Agent from the
       Borrower of a Drawdown  Notice not later than 10 a.m.  (Oslo time) on the
       3rd Banking Day before the proposed  Drawdown Date (or such later date as
       the Facility Agent may, in its absolute  discretion,  agree).  A Drawdown
       Notice shall be effective  on actual  receipt by the Facility  Agent and,
       once given, shall, subject as provided in clause 3.7.2), be irrevocable.

2.5    Amount

       The principal  amount  specified in the Drawdown  Notice for borrowing on
       the  Drawdown  Date shall,  subject to the terms and  conditions  of this
       Agreement, not exceed three hundred million Dollars ($300,000,000).

2.6    Availability

       Upon  receipt  of a  Drawdown  Notice  complying  with the  terms of this
       Agreement the Facility Agent shall promptly  notify each Bank thereof and
       of the  date  on  which  the  Loan  is to be  made  and,  subject  to the
       provisions  of  clause  9, on such  date on which the Loan is to be drawn
       down each of the Banks shall make  available  to the  Facility  Agent its
       portion of the Loan for payment by the Facility Agent in accordance  with
       clause 6.2.

2.7    Application of proceeds

       Without prejudice to the Borrower's  obligations under clause 8.1.3, none
       of the Creditors  shall have any  responsibility  for the  application of
       proceeds of the Loan by the Borrower.

2.8    Termination of Commitments

       If  the  Loan  is not  drawn  down  by  the  Latest  Drawdown  Date,  the
       Commitments shall thereupon be automatically cancelled.

3      Interest

3.1    Normal interest rate

       The Borrower  shall pay interest on the Loan in respect of each  Interest
       Period  relating  thereto on each  Rollover  Date (or,  in the case of an
       Interest  Period of more than three  months,  by  instalments,  the first
       instalment three months from the commencement of such Interest Period and
       the  subsequent  instalments at intervals of three months or, if shorter,
       the period from the date of the preceding  instalment  until the Rollover
       Date relative to such Interest  Period) at the rate per annum  determined
       by the  Facility  Agent to be the  aggregate  of (a) the Margin,  (b) the
       Additional Cost (if any) and (c) LIBOR. Any portion of the interest equal
       to Additional Cost shall be for the account of Banks whose  participation
       in the Loan is subject to the Additional Cost.

3.2    Selection of Interest Periods

       The Borrower may by notice  received by the Facility Agent not later than
       10 a.m. (Oslo time) on the third Banking Day before the beginning of each
       Interest  Period  specify  whether  such  Interest  Period  shall  have a
       duration  of three (3) or six (6)  months  (or such  other  period as the
       Borrower may select and all of the Banks may agree in writing).

3.3    Determination of Interest Periods

       Every Interest Period shall be of the duration  specified by the Borrower
       pursuant to clause 3.2 but so that:

3.3.1  the first  Interest  Period in respect of the Loan shall  commence on the
       Drawdown  Date and each  subsequent  Interest  Period  for the Loan shall
       commence on the last day of the previous Interest Period;

3.3.2  if any Interest Period would otherwise overrun a Repayment Date, then the
       Loan shall be divided into parts, so that there is one part in the amount
       of the repayment  instalment  due on each  Repayment  Date falling during
       that Interest Period and having an Interest Period ending on the relevant
       Repayment  Date and another part in the amount of the balance of the Loan
       having an Interest  Period  ascertained in accordance with clause 3.2 and
       the other provisions of this clause 3.3; and

3.3.3  if the Borrower  fails to specify the  duration of an Interest  Period in
       accordance  with the  provisions  of clause 3.2 and this  clause 3.3 such
       Interest  Period  shall have a duration of three (3) months or such other
       period as shall comply with this clause 3.3.

3.4    Default interest

       If the Borrower fails to pay any sum (including,  without limitation, any
       sum  payable  pursuant  to this  clause  3.4) on its due date for payment
       under any of the Security  Documents,  the Borrower shall pay interest on
       such sum on demand from the due date up to the date of actual payment (as
       well after as before judgment) at a rate determined by the Facility Agent
       pursuant to this clause 3.4.  The period  beginning  on such due date and
       ending on such date of payment shall be divided into  successive  periods
       of not more than three  months as selected by the  Facility  Agent (after
       consultation  with the Banks) each of which (other than the first,  which
       shall  commence on such due date)  shall  commence on the last day of the
       preceding  such  period.  The rate of  interest  applicable  to each such
       period shall be the aggregate (as determined by the Facility Agent of (a)
       two per cent (2%) per annum, (b) Margin,  (c) the Additional Cost and (d)
       LIBOR for such  period  provided  that if such unpaid sum is an amount of
       principal which became due and payable, by reason of a declaration by the
       Facility  Agent under clause  10.2.1 or a prepayment  pursuant to clauses
       4.4, 4.7 or 12.1 on a date other than a Repayment Date relating  thereto,
       the first  such  period  selected  by the  Facility  Agent  shall be of a
       duration  equal to the period  between the due date of such principal sum
       and such  Repayment  Date and interest shall be payable on such principal
       sum during such period at a rate of two per cent (2%) per annum above the
       aggregate  of the  Margin,  the  Additional  Cost  and the  rate of LIBOR
       applicable  thereto  immediately  before it shall have  become so due and
       payable.  Default  interest  shall be due and  payable on the last day of
       each such period as  determined  by the Facility  Agent  pursuant to this
       clause  3.4 or, if  earlier,  on the date on which the sum in  respect of
       which such default  interest is accruing  shall actually be paid. If, for
       the reasons  specified in clause  3.7.1 the  Facility  Agent is unable to
       determine a rate in  accordance  with the  foregoing  provisions  of this
       clause 3.4,  each Bank shall  promptly  notify the Facility  Agent of the
       cost of funds to such  Bank and  interest  on any sum not paid on its due
       date for payment shall be calculated  for each Bank at a rate  determined
       by the  Facility  Agent  to be two per  cent  (2%) per  annum  above  the
       aggregate  of the Margin,  the  Additional  Cost and the cost of funds to
       such Bank.  Each Bank shall  (without  prejudice to the obligation of the
       Borrower to pay such interest) provide  reasonable detail as to the basis
       on which it has determined such cost of funds.

3.5    Notification of interest rate

       The Facility  Agent shall  notify the Borrower and the Banks  promptly of
       each rate of interest determined by it under this clause 3.

3.6    Reference Bank quotations

       If any Reference Bank is unable or otherwise fails to furnish a quotation
       for the purpose of calculating LIBOR pursuant to the proviso contained in
       the definition of LIBOR the interest rate shall be determined, subject to
       clause 3.7, on the basis of the  quotations  furnished  by the  remaining
       Reference Banks.

3.7    Market disruption; non-availability

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

       (a)    the  Facility  Agent shall have  determined  (which  determination
              shall,  in the absence of manifest error, be prima facie evidence)
              that adequate and fair means do not exist for  ascertaining  LIBOR
              during such Interest  Period in accordance  with the definition of
              LIBOR in clause 1.2; or

       (b)    where  applicable,  none  of  the  Reference  Banks  supplies  the
              Facility  Agent with a quotation  for the  purpose of  calculating
              LIBOR; or

       (c)    the Facility  Agent shall have  received  notification  from Banks
              with  Contributions  aggregating  more  than one third of the Loan
              (or, prior to the Drawdown Date, Commitments  aggregating not less
              than one third of the Total  Commitments) that deposits in Dollars
              are not available to such Banks in the London  Interbank Market in
              the  ordinary  course of  business in  sufficient  amounts to fund
              their  Contributions for such Interest Period or, where applicable
              in accordance with the definition of LIBOR in clause 1.2, that the
              arithmetic  mean  of the  quotations  for  LIBOR  supplied  by the
              Reference Banks does not accurately reflect the cost to such Banks
              of obtaining such deposits,

       the Facility Agent shall forthwith give notice (a "Determination Notice")
       thereof to the Borrower and to each of the Banks. A Determination  Notice
       shall contain  particulars of the relevant  circumstances  giving rise to
       its issue.

3.7.2  After the giving of any Determination  Notice,  the undrawn amount of the
       Commitment shall not be borrowed until notice to the contrary is given to
       the Borrower by the Facility Agent.

3.7.3  During  the period of ten (10) days  after any  Determination  Notice has
       been given by the Facility  Agent under clause 3.7.1 each  affected  Bank
       shall  certify  an  alternative   basis  (the  "Substitute   Basis")  for
       maintaining  its   Contribution.   The  Substitute   Basis  may  (without
       limitation) include alternative interest periods,  alternative currencies
       or  alternative  rates of interest  but shall  include a margin above the
       cost of funds (including  Additional Cost if any) to such Bank equivalent
       to the Margin.  Each Substitute  Basis so certified shall be binding upon
       the Borrower and shall take effect in accordance  with its terms from the
       date  specified  in the  Determination  Notice  until  such  time  as the
       Facility  Agent  notifies  the  Borrower  that none of the  circumstances
       specified  in  clause  3.7.1  continues  to exist  whereupon  the  normal
       interest rate fixing provisions of the Agreement shall apply.

4      Repayment and prepayment

4.1    Repayment

       The  Borrower  shall  repay the Loan by  instalments  in the  amounts and
       (subject always to clause 6.4) on the Repayment Dates set out in schedule
       5.

4.2    Mandatory Prepayment

4.2.1  If, in relation to a Ship,  the  chartering  of that Ship under the Lease
       Agreement  with respect to that Ship  terminates  pursuant to clause 27.3
       (Mandatory  Prepayment) of such Lease Agreement then without the need for
       any notice by any party hereto,  the Commitment of each Bank with respect
       to the amount which is equal to one hundred and fifteen percent (115%) of
       the  Relevant  Fraction  of the  Loan  shall be  reduced  to zero and the
       principal  amount of the Loan in such amount (or, if less,  the principal
       amount of the Loan then  outstanding)  and accrued interest thereon shall
       become  due and  payable  on the date  when the  chartering  of that Ship
       terminates in accordance with the terms of the Lease  Agreement  relating
       to that  Ship and on such date or,  as the case may be,  upon such  first
       written  demand  the  Borrower  shall  forthwith  pay such  amount to the
       Facility Agent as enables the Facility  Agent to reduce the  Indebtedness
       in the amount described in clause 4.4.2.

4.2.2  If the  Total  Loss  Proceeds  or the  Lessor  Proceeds  (as such term is
       defined in the relevant  Proceeds  Deed)  received by the Security  Agent
       pursuant  to the terms of the  relevant  Proceeds  Deed are less than the
       aggregate  of the  amount  required  to be paid in  accordance  with this
       clause 4.2, the Borrower  shall  forthwith pay to the Facility Agent such
       additional amount as shall be required to pay the deficit.

4.3    Voluntary prepayment

       The  Borrower  may prepay the Loan in whole or in part (being one million
       Dollars   ($1,000,000)   or  whole   multiples  of  one  million  Dollars
       ($1,000,000)) on any Rollover Date relating to the part of the Loan to be
       prepaid  without  premium or penalty subject always to the payment by the
       Borrower of any Breakage Costs in accordance  with clause 11.1 hereof and
       provided that immediately prior to, and immediately after such prepayment
       (unless the whole of the Loan has been prepaid),  the Borrower will be in
       compliance with the financial covenants in clause 8.5.

4.4    Prepayment on Total Loss and disposal of a Ship, etc.

4.4.1  Before Drawdown Date

       On a Ship becoming a Total Loss (or suffering damage or being involved in
       an incident which in the opinion of the Facility  Agent,  in consultation
       with the Borrower,  may result in such Ship subsequently being determined
       to be a Total Loss) before the Drawdown Date, the obligation of the Banks
       to advance the Loan shall  immediately cease and the Commitments shall be
       reduced to zero.

4.4.2  After the Drawdown Date

       If, on or after the Drawdown Date:

       (a)    a Ship becomes a Total Loss; or

       (b)    a Ship is sold  following  the  exercise  by the  Borrower  of its
              rights under  clause 3.3 of a Lease  Agreement  and in  accordance
              with clause 8.4.14 is sold,

       the Loan shall be reduced on the  applicable  Disposal  Repayment Date by
       the relevant Disposal Repayment Amount.

4.4.3  Defined terms

       For the purposes of this clause 4.4:

       "Disposal  Repayment  Amount"  means in relation to a Disposal  Repayment
       Date,  the amount in  Dollars  which is in  relation  to a Ship which has
       become a Total Loss or is being sold, the amount which is one hundred and
       fifteen per cent.  (115%) of the Relevant  Fraction of the Loan as at the
       Disposal Repayment Date (or, if less, the amount of the Loan); and

       "Disposal Repayment Date" means:

       (a)    where a Ship has become a Total  Loss,  its Total  Loss  Repayment
              Date; or

       (b)    where a Ship is being sold in accordance  with clause 8.4.14,  the
              date upon which the sale of such Ship is completed by the transfer
              of title to such Ship to the  purchaser in exchange for payment of
              the relevant purchase price; or

4.4.4  Valuation of Ships

       For  the  purposes  of this  clause  4.4 and to  determine  the  Relevant
       Fraction of the Loan, the Ships shall be valued in accordance with clause
       8.2 at the cost of the  Borrower  save  that,  in the case of the sale of
       such a Ship,  the  value of such Ship  shall,  for the  purposes  of this
       clause,  be deemed to be the Net Sale Proceeds of such Ship or, if higher
       and if the  purchaser  is a member of the Golar LNG  Group,  the value of
       such Ship as determined in accordance with clause 8.2.

4.4.5  Valuation conclusive and costs

       The values  determined in  accordance  with clause 4.4.4 shall be binding
       upon the parties  hereto for the  purposes of  determining  the  Disposal
       Repayment  Amount  for  a  Disposal  Repayment  Date  and  all  costs  in
       connection  with the Facility  Agent  obtaining  any  valuation  for such
       purpose shall be borne by the Borrower.

4.4.6  Date of Total Loss

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

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

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

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

       (d)    in the case of  Compulsory  Acquisition  of a vessel,  on the date
              upon which the relevant  requisition of title or other  compulsory
              acquisition of such vessel occurs; and

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

4.4.7  Application of Total Loss and disposal proceeds

       Provided no Default has  occurred  and is  continuing  and  provided  the
       Borrower  shall  have  complied  with  clauses  4.4 and  4.5,  any of the
       insurance  moneys or Requisition  Compensation in respect of a Total Loss
       of a Ship received by the Facility  Agent or the Security  Agent pursuant
       to the  Proceeds  Deeds  or any  Security  Document  shall be paid to the
       relevant Bareboat  Charterer or (if and to the extent necessary to ensure
       compliance   with  clause  4.4)  retained  by  the  Facility   Agent  for
       application  in or  towards  making any  prepayment  and paying any other
       moneys  required  under clauses 4.4 and 4.5. For this  purpose,  any such
       moneys so received (or the relevant part thereof) may be applied,  if the
       Borrower  and the Security  Party to whom such moneys  belong so requests
       the  Facility  Agent in writing  before the date of receipt  thereof,  in
       effecting  any  prepayment  required  in  accordance  with clause 4.4 and
       paying  related  amounts  due under  clause  4.5.  The  surplus  (if any)
       remaining  after such payments shall be paid to the Earnings  Account for
       application in accordance with clause 4 of the Agency Agreement.

4.5    Amounts payable on prepayment

       Any prepayment under this Agreement shall be made together with:

4.5.1  accrued  interest  on the  amount  to be  prepaid  to the  date  of  such
       prepayment (calculated in respect of any period during which the relevant
       Substitute  Basis has  applied by virtue of clause  3.7.3,  at a rate per
       annum  equal  to the  aggregate  of (i) the  Margin  and  (ii)  the  cost
       (including any Additional  Cost) to such Bank of funding its Contribution
       for such period);

4.5.2  any additional amounts payable under clauses 6.7 and 12.2; and

4.5.3  all other sums payable by the  Borrower to the  relevant  Bank under this
       Agreement  or any of the  other  Security  Documents  including,  without
       limitation any amounts payable under clause 11.

4.6    Notice of prepayment; reduction of repayment instalments

4.6.1  No prepayment may be effected under clause 4.3 or 4.7 unless the Borrower
       shall have given the Facility  Agent at least ten Banking Days' notice of
       its intention to make such  prepayment.  Every notice of prepayment shall
       be  effective  only on actual  receipt by the  Facility  Agent,  shall be
       irrevocable,  shall specify the amount to be prepaid and shall oblige the
       Borrower to make such prepayment on the date specified. No amount prepaid
       may be  reborrowed.  Any amount  prepaid  under  clause 4.3 or clause 4.7
       shall be applied in reducing the repayment  instalments  under clause 4.1
       in inverse  order of maturity or (if the  Borrower so requests in writing
       in the  notice  of its  intention  to make such  prepayment)  in order of
       maturity.  Any  amount  prepaid  pursuant  to clause  4.2 or 4.4 shall be
       applied in reducing the repayment instalments under clause 4.1 pro rata.

4.6.2  The  Borrower  may not  prepay  the  Loan  or any  part  thereof  save as
       expressly provided in this Agreement.

4.7    Additional voluntary prepayment

4.7.1  The Borrower may also prepay (in whole but not in part),  without premium
       or penalty,  but without  prejudice to its obligations under clauses 3.7,
       6.7 and 12.2:

       (a)    the  Contribution  of any Bank to which the  Borrower  shall  have
              become  obliged to pay  additional  amounts  under  clauses 6.7 or
              12.2; or

       (b)    any Bank's  Contribution  to which a Substitute  Basis  applies by
              virtue of clause 3.7.3.

       Upon any notice of such  prepayment  being given,  the  Commitment of the
       relevant Bank shall be reduced to zero.

4.8    Prepayment of Earnings on default

       If an Event of Default  occurs and is  continuing  the Borrower  shall be
       obliged to pay all  Earnings  (not  required  for  payment  of  scheduled
       amounts of  principal  and  interest  under this  Agreement  or Operating
       Costs) to the Facility Agent for  application  towards  prepayment of the
       Loan  (which  the  Facility  Agent  shall do at the end of each  Interest
       Period).

5      Fees commission and expenses

5.1    Fees and commissions

       The Borrower shall pay to the Facility Agent:

5.1.1  Arrangement fee

       on the  Drawdown  Date,  for  the  account  of the  Facility  Agent  (for
       distribution amongst the Banks, at the discretion of the Lead Arrangers),
       a  non-refundable  arrangement  fee in an amount  equal to zero point six
       five percent (0.65%) of the Total Commitments as of the Drawdown Date;

5.1.2  Commitment commission

       on the Drawdown  Date (only if ten (10)  Business  Days or more after the
       date hereof),  a commitment fee in an amount equal to fifty percent (50%)
       of the Margin on the unutilised  Commitment of each Bank accrued from the
       date of this Agreement until and including the Drawdown Date;

5.1.3  Agency fee

       on the Drawdown Date and on each anniversary of such date until no moneys
       are owing  under the  Security  Documents  and the  Borrower is no longer
       under any obligation, actual or contingent, under this Agreement, for the
       account of the Facility  Agent, an agency fee of an amount agreed between
       the Borrower and the Facility Agent in a separate letter.

5.2    Expenses

5.2.1  The Borrower  shall pay to the Facility  Agent and/or the Security  Agent
       and/or the  Documentation  Agent (as the case may be) on a full indemnity
       basis on demand all reasonable  expenses  (including legal,  printing and
       out-of-pocket expenses) incurred:

       (a)    by  any of the  Creditors  in  connection  with  the  negotiation,
              preparation,  execution and, where  relevant,  registration of the
              Security  Documents,  the  syndication  of  the  Loan  (including,
              without limitation,  preparation of any information memoranda) and
              of any  amendment or extension of or the granting of any waiver or
              consent under, any of the Security Documents; and

       (b)    any  of  the  Creditors  in  contemplation  of,  or  otherwise  in
              connection with, the enforcement of, or preservation of any rights
              under,  any of the  Security  Documents or otherwise in respect of
              the moneys owing under any of the Security Documents

       (c)    together  with interest at the rate referred to in clause 3.4 from
              the date on which  such  expenses  were  incurred,  to the date of
              payment (as well after as before judgment).

5.3    Value added tax

       All fees,  commissions  and  expenses  payable  pursuant to this clause 5
       shall be paid  together  with an  amount  equal to any  value  added  tax
       payable by any Creditor in respect of such fees and  expenses.  Any value
       added tax chargeable in respect of any services  supplied by any Creditor
       under this Agreement shall, on delivery of a value added tax invoice,  be
       paid in addition to any sum agreed to be paid hereunder.

5.4    Stamp and other duties

       The Borrower shall pay all stamp, documentary, registration or other like
       duties or Taxes  (including any duties or Taxes payable by the Creditors)
       imposed on or in connection with any of the Security  Documents and shall
       indemnify  the Creditors  against any liability  arising by reason of any
       delay or omission by the Borrower to pay such duties or taxes.

6      Payments and taxes; accounts and calculations

6.1    No set-off or counterclaim; distribution to the Banks

       The Borrower acknowledges that in performing their obligations under this
       Agreement,  the Banks will be incurring  liabilities  to third parties in
       relation  to the  funding of amounts to the  Borrower,  such  liabilities
       matching  the  liabilities  of the  Borrower  to the Banks and that it is
       reasonable  for the Banks to be  entitled  to receive  payments  from the
       Borrower  gross  on the due date in order  that  the  Banks  are put in a
       position to perform  their  matching  obligations  to the relevant  third
       parties. Accordingly all payments to be made by the Borrower under any of
       the Security  Documents shall,  subject to the provisions of the Proceeds
       Deeds, be made in full,  without any set-off or  counterclaim  whatsoever
       and,  subject as provided in clause 6.7, free and clear of any deductions
       or withholdings,  in Dollars (except for costs, charges or expenses which
       shall,  at the request of the Facility  Agent, be payable in the currency
       in  which  they  are  incurred)  on the due  date to the  account  of the
       Facility  Agent at such bank as the Facility  Agent may from time to time
       specify for this purpose. Save where this Agreement specifically provides
       for a payment to be made for the account of a particular Bank (including,
       without  limitation,  clauses 3.1, 4.7, 5.2, 6.7, 11.1,  11.2, 11.3, 12.1
       and 12.2) in which case the Facility Agent shall  distribute the relevant
       payment to the Bank concerned,  payments to be made by the Borrower under
       this Agreement shall be for the account of all the Banks and the Facility
       Agent  shall  forthwith  distribute  such  payments  in like funds as are
       received by the Facility Agent to the Banks  rateably in accordance  with
       their Commitments or Contributions, as the case may be.

6.2    Payments by the Banks

       All sums to be advanced by the Banks to the Borrower under this Agreement
       shall be remitted in Dollars on the  Drawdown  Date to the account of the
       Facility  Agent at such bank as the Facility  Agent may have  notified to
       the Banks and  shall be paid by the  Facility  Agent on such date in like
       funds as are received by the Facility  Agent to the account  specified in
       the Drawdown Notice.

6.3    Facility Agent may assume receipt

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

6.4    Non-Banking Days

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

6.5    Calculations

       All interest,  commissions,  fees and other  payments of an annual nature
       under any of the Security  Documents  shall accrue from day to day and be
       calculated  on the basis of actual days  elapsed and a three  hundred and
       sixty (360) day year.

6.6    Certificates conclusive

       Any certificate or  determination of the Facility Agent or any Bank as to
       any rate of interest or any other amount pursuant to and for the purposes
       of any of the Security Documents shall, in the absence of manifest error,
       be  conclusive  and  binding  on the  Borrower  and  (in  the  case  of a
       certificate or determination by the Facility Agent) on the Banks.

6.7    Grossing-up for Taxes

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

6.8    Grossing-up for Taxes - Banks

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

6.9    Bank accounts

       Each Bank shall  maintain,  in  accordance  with its usual  practice,  an
       account or accounts  evidencing  the  amounts  from time to time lent by,
       owing to and paid to it under the Security Documents.  The Facility Agent
       shall maintain a control account showing the Loan and other sums owing to
       the Facility  Agent,  the Security Agent and the Banks under the Security
       Documents and all payments in respect thereof made from time to time. The
       control  account shall,  in the absence of manifest error, be prima facie
       evidence as to the amount from time to time owing to the Facility  Agent,
       the Security Agent and the Banks under the Security Documents.

6.10   Partial payments

       If,  on any date on  which a  payment  is due to be made by the  Borrower
       under any of the Security Documents,  the amount received by the Facility
       Agent from the  Borrower  falls short of the total  amount of the payment
       due to be made by the  Borrower on such date then,  without  prejudice to
       any rights or remedies  available  to the  Facility  Agent,  the Security
       Agent and the Banks under any of the  Security  Documents,  the  Facility
       Agent shall apply the amount  actually  received  from the Borrower in or
       towards  discharge of the  obligations of the Borrower under the Security
       Documents in the following order, notwithstanding any appropriation made,
       or purported to be made, by the Borrower:

6.10.1 firstly,  in or towards payment, on a pro-rata basis, of any unpaid fees,
       costs and expenses of the Facility Agent and the Security Agent under any
       of the Security Documents;

6.10.2 secondly,  in or towards payment to the Facility Agent, of any proportion
       of the agency fee payable  under clause 5.1.3 which shall have become due
       but remains unpaid;

6.10.3 thirdly,  in or towards payment to the Banks, on a pro-rata basis, of any
       accrued  interest  which  shall have become due under the  Agreement  but
       remains unpaid;

6.10.4 fourthly, in or towards payment to the Banks, on a pro-rata basis, of any
       principal  which shall have become due under this  Agreement  but remains
       unpaid; and

6.10.5 fifthly,  in or towards  payment of any other sum which shall have become
       due under this  Agreement but remains  unpaid (and, if more than one such
       sum so remains unpaid, on a pro-rata basis).

       The order of  application  set out in this clause 6.10.1 to 6.10.5 may be
       varied by the Facility Agent if all the Banks so direct.

6.11   Claw-back of Tax benefit

       If,  following  any such  deduction or  withholding  as is referred to in
       clause 6.7 from any payment by the Borrower,  any Creditor  shall receive
       or be granted a credit  against or remission for any Taxes payable by it,
       that Creditor  shall,  subject to the Borrower  having made any increased
       payment in accordance with clause 6.7 and to the extent that the relevant
       Creditor  can do so without  prejudicing  the  retention of the amount of
       such  credit  or  remission  and  without  prejudice  to the right of any
       Creditor to obtain any other relief or  allowance  which may be available
       to it,  reimburse the Borrower with such amount as that Creditor shall in
       its absolute  discretion  certify to be the  proportion of such credit or
       remission  as will  leave  it  (after  such  reimbursement)  in no  worse
       position  than it would have been in had there been no such  deduction or
       withholding  from  the  payment  by  the  Borrower  as  aforesaid.   Such
       reimbursement   shall  be  made  forthwith  upon  the  relevant  Creditor
       certifying  that the amount of such credit or remission has been received
       by it. Nothing  contained in this Agreement  shall oblige any Creditor to
       rearrange  its tax affairs or to disclose any  information  regarding its
       tax affairs and computations.  Without prejudice to the generality of the
       foregoing,  the  Borrower  shall not, by virtue of this clause  6.11,  be
       entitled to enquire about any Creditor's tax affairs.

7      Representations and warranties

7.1    Continuing representations and warranties

       The Borrower represents and warrants to each of the Creditors that:

7.1.1  Due incorporation

       each of the Security  Parties is duly  incorporated  and validly existing
       under the laws of its  country of  incorporation  as a limited  liability
       company  and has  power  to  carry  on its  business  as it is now  being
       conducted and to own its property and other assets;

7.1.2  Corporate power

       the  Borrower  has  power to  borrow  the  Loan and each of the  Security
       Parties has power to execute  and  deliver  and  perform its  obligations
       under the Security Documents and the Transaction Documents to which it is
       or is to be a party;  all  necessary  corporate,  shareholder  and  other
       action  has  been  taken  to  authorise  the   execution,   delivery  and
       performance  of the same and no  limitation on the powers of any Security
       Party to borrow will be exceeded as a result of the  obligations  of such
       Security Party under the Security Documents;

7.1.3  Binding obligations

       the Security  Documents  constitute or will,  when  executed,  constitute
       valid,  legally  binding  and  enforceable  obligations  of the  relevant
       Security Parties;

7.1.4  No conflict with other obligations

       the execution and delivery of, the performance of its obligations  under,
       and compliance with the provisions of, the relevant Transaction Documents
       and the Security Documents by the relevant Security Parties will not:

       (a)    contravene  any  existing   applicable  law,   statute,   rule  or
              regulation or any judgment, decree or permit to which any Security
              Party is subject;

       (b)    conflict  with, or result in any breach of any of the terms of, or
              constitute a default under,  any agreement or other  instrument to
              which any  Security  Party is a party or is subject or by which it
              or any of its property is bound;

       (c)    contravene or conflict  with any  provision of the  constitutional
              documents of any Security Party; or

       (d)    result in the  creation or  imposition  of or oblige any  Security
              Party or any other  member  of the  Golar Gas Group to create  any
              Encumbrance  (other  than a Permitted  Encumbrance)  on any of the
              undertakings,  assets, rights or revenues of any Security Party or
              any other member of the Golar Gas Group;

7.1.5  No filings required

       save for the  registration  of the Mortgages  with the relevant  Registry
       under  the  laws  of  the  relevant  Flag  State,   the  registration  or
       presentation of particulars of charge of any of the Security Documents in
       England or Bermuda with the relevant  Registrar of  Companies,  it is not
       necessary   to  ensure  the   legality,   validity,   enforceability   or
       admissibility  in evidence  of the  Transaction  Documents  or any of the
       Security Documents that they or any other instrument be notarised, filed,
       recorded, registered or enrolled in any court, public office or elsewhere
       in any Relevant  Jurisdiction or that any stamp,  registration or similar
       tax or charge be paid in any Relevant  Jurisdiction  on or in relation to
       the Transaction  Documents and each of the Transaction  Documents and the
       Security Documents is in proper form for its enforcement in the courts of
       each  Relevant  Jurisdiction  except  that  for  enforcement  of any such
       document in a court of competent jurisdiction in Liberia, a stamp must be
       affixed to such document prior to its presentation to the court;

7.1.6  Choice of law

       the  choice of  English  law to govern  the  Transaction  Documents,  the
       Security Documents and the submissions therein by the Security Parties to
       the  non-exclusive  jurisdiction  of the  English  courts  are  valid and
       binding;

7.1.7  No immunity

       no  Security  Party nor any of its assets is  entitled to immunity on the
       grounds of  sovereignty  or otherwise from any legal action or proceeding
       (which shall  include,  without  limitation,  suit,  attachment  prior to
       judgement, execution or other enforcement);

7.1.8  Bareboat Charterers

       each of the  Bareboat  Charterers  is a  wholly-owned  Subsidiary  of the
       Manager; and

7.1.9  Shareholdings in the Borrower

       the Parent will on the Drawdown Date own directly or indirectly,  legally
       and beneficially, all the issued share capital of the Borrower.

7.2    Initial representations and warranties

       The Borrower  represents  and warrants  (and shall be deemed to represent
       and warrant) to each of the Creditors:

7.2.1  No default in respect of other Indebtedness

       no  Security  Party nor any  other  member of the Golar LNG Group is (nor
       would with the giving of notice or lapse of time or the  satisfaction  of
       any other condition or combination thereof be) in breach of or in default
       under any agreement relating to Indebtedness to which it is a party or by
       which it may be bound and no member of the Golar Gas Group is liable  for
       Borrowed Money or Swap Liabilities save as are permitted by clause 8.3.9;

7.2.2  Information

       the  information  and  reports  furnished  by any  Security  Party to the
       Facility Agent,  the Lead  Arrangers,  the Security Agent or the Banks in
       connection with the negotiation and preparation of the Security Documents
       was, to the best of such Security  Party's and the  Borrower's  knowledge
       and belief fair and accurate in all material  respects when given (or, in
       the case of any projections, was based on reasonable assumptions) subject
       to any  qualifications  given  in  writing  at the  time of  giving  such
       information or contained  within such  information and there are no other
       facts the omission of which would have made any fact or statement therein
       misleading in any material respect;

7.2.3  Compliance with Environmental Laws and Approvals

       except as may already have been  disclosed  by the Borrower  prior to the
       date of this Agreement in writing to, and acknowledged in writing by, the
       Facility Agent:

       (a)    to the best of the  Borrower's  knowledge  and  belief  after  due
              enquiry,  all members of the Golar LNG Group have  complied in all
              respects with the provisions of all applicable Environmental Laws;

       (b)    to the best of the  Borrower's  knowledge  and  belief  after  due
              enquiry,  all  members  of the Golar LNG Group have  obtained  all
              Environmental Approvals and are in compliance in all respects with
              all such applicable Environmental Approvals; and

       (c)    no member of the Golar LNG Group has  received  any  notice of any
              Environmental  Claim against any member of the Golar LNG Group, or
              any Ship;

7.2.4  No Environmental Claims

       except as may already have been  disclosed  by the Borrower  prior to the
       date of this Agreement in writing to, and acknowledged in writing by, the
       Facility Agent,  there is no Environmental  Claim pending or, to the best
       of the  Borrower's  knowledge  and belief after due  enquiry,  threatened
       against any member of the Golar LNG Group, or any Ship;

7.2.5  No Environmental Incidents

       except as may already have been  disclosed  by the Borrower  prior to the
       date of this Agreement in writing to, and acknowledged in writing by, the
       Facility Agent, to the best of the Borrower's  knowledge and belief after
       due enquiry there has been no emission,  spill, release or discharge of a
       Pollutant from any Ship;

7.2.6  No other Environmental problems

       except as may have  already been  disclosed by the Borrower  prior to the
       date of this Agreement in writing to and  acknowledged in writing by, the
       Facility  Agent,  to the best of the knowledge and belief of the Borrower
       and its directors and other officers  (having made due enquiry) there are
       no circumstances  arising from any breach of Environmental  Laws or which
       may give rise to an Environmental  Claim which  constitutes,  or may give
       rise to, the Event of Default specified in clause 10.1.25;

7.2.7  Copies true and complete

       the copies of the Transaction  Documents  delivered or to be delivered to
       the Facility  Agent  pursuant to clause 9 are, or will when delivered be,
       true and complete copies of such  documents;  each of such documents will
       when delivered constitute valid,  binding and enforceable  obligations of
       the Security Parties and any other members of the Golar Gas Group who are
       parties  thereto  and there will have been no  amendments  or  variations
       thereof or defaults thereunder;

7.2.8  Consents obtained

       every  consent,  authorisation,  licence or approval of, or  registration
       with or declaration  to,  governmental or public bodies or authorities or
       courts  required by any Security  Party (and  considered  by the Facility
       Agent,  in its absolute  discretion,  to be material)  to  authorise,  or
       required  by any  Security  Party  in  connection  with,  the  execution,
       delivery,  validity,  enforceability  or admissibility in evidence of the
       Transaction   Documents  and  each  of  the  Security  Documents  or  the
       performance by any Security Party of its  obligations  under the Security
       Documents  has been  obtained or made and is in full force and effect and
       there  has  been  no  default  in  the  observance  of any  condition  or
       restriction  (if any) imposed in, or in connection  with, any of the same
       and except as disclosed in writing by the Borrower to the Facility  Agent
       prior to the date of this Agreement;

7.2.9  Pari passu

       the obligations of the Borrower under this Agreement are direct,  general
       and  unconditional  obligations  of the  Borrower  and rank at least pari
       passu with all other  present  and future  unsecured  and  unsubordinated
       Indebtedness of the Borrower with the exception of any obligations  which
       are mandatorily preferred by law and not by contract;

7.2.10 No withholding Taxes

       no Taxes are imposed by  withholding  or  otherwise  on any payment to be
       made  by any  Security  Party  under  the  Transaction  Documents  or the
       Security Documents;

7.2.11 No Stamp Taxes

       No stamp or other  documentation Taxes are imposed on or by virtue of the
       execution or delivery by any Security Party of the Transaction  Documents
       or the  Security  Documents  or any other  document or  instrument  to be
       executed or delivered under any of the Security Documents;

7.2.12 No Default

       no Default has occurred and is continuing;

7.2.13 Ships

       each Ship will on the Drawdown Date be:

       (a)    in the absolute ownership of the relevant Lessor free and clear of
              all Encumbrances  (other than Permitted  Encumbrances) who will on
              the Drawdown Date be the sole,  legal and beneficial owner of such
              Ship;

       (b)    registered in the name of the relevant Lessor through the relevant
              Registry  as a ship under the laws and flag of the  relevant  Flag
              State;

       (c)    operationally seaworthy and in every way fit for service;

       (d)    classed  with  the  relevant  Classification  free of all  overdue
              requirements and  recommendations  of the relevant  Classification
              Society;

       (e)    managed  by an  Approved  Manager  under  an  Approved  Management
              Agreement; and

       (f)    continuing in the service of the relevant Approved Charterer under
              its Approved Charter (if any);

7.2.14 Compliance with Approved Charters

       each Bareboat  Charterer  has complied in all material  respects with the
       provisions of the relevant Approved Charter;

7.2.15 Compliance

       each Bareboat Charterer and Approved Manager has complied at all material
       times in all  material  respects  with  the ISM  Code  and to the  extent
       applicable, the ISPS Code;

7.2.16 No litigation

       no  litigation,  investigation  (to the  knowledge of the officers of the
       Borrower),  arbitration  or  administrative  proceeding  is taking place,
       pending or, to the knowledge of the officers of the Borrower,  threatened
       against  any  Security  Party or any other  member of the Golar LNG Group
       which could have a material  adverse  effect on the  business,  assets or
       financial condition of any Security Party;

7.2.17 Ship's employment

       other than pursuant to the Approved  Charters,  no Ship is nor will on or
       before the Drawdown  Date be subject to any charter or contract or to any
       agreement  to enter into any charter or contract  which,  if entered into
       after the date of this  Agreement  would have required the consent of the
       Security  Agent  under  this  Agreement  and  there  is no  agreement  or
       arrangement  whereby  the  Earnings  of any Ship  after  the date of this
       Agreement may be shared with any other person;

7.2.18 Freedom from Encumbrances

       none  of  the  Ships  nor  their  respective   Earnings,   Insurances  or
       Requisition Compensation nor any other properties or rights which are, or
       are to be, the  subject  of any of the  Security  Documents  nor any part
       thereof will be on the Drawdown  Date  subject to any  Encumbrance  other
       than Permitted Encumbrances;

7.2.19 Shareholdings in Parent

       Greenwich Holdings Limited  ("Greenwich") or a subsidiary of Greenwich is
       the legal and  beneficial  owner,  directly  or  indirectly,  of at least
       twenty five per cent. (25%) of the ordinary share capital of the Parent;

7.2.20 No material adverse change

       there  has  been  no  change  in the  business,  financial  condition  or
       operations of the Golar Gas Group since 30 September 2004 which is likely
       to  have  a  material  adverse  effect  on its  ability  to  perform  its
       obligations under this Agreement or the Security Documents;

7.2.21 Financial statements

       the financial statements in respect of the nine (9) months ended as of 30
       September  2004 as delivered to the Facility Agent have been prepared (in
       the case of the Golar Gas Group on a pro-forma  consolidated and combined
       basis)  in  accordance  with the  Relevant  GAAP  (and  the  arrangements
       contemplated by the Lease  Agreements and  arrangements  relating thereto
       are not in breach of the  Relevant  GAAP)  which  have been  consistently
       applied and present fairly and  accurately the financial  position of the
       Borrower and each Bareboat  Charterer and the  consolidated  and combined
       financial  position of the Golar Gas Group  respectively  as at such date
       and the  results of the  operations  of the  Borrower  and each  Bareboat
       Charterer  and the  consolidated  and  combined  results of the Golar Gas
       Group  respectively for the nine (9) months ended on such date and, as at
       such date,  neither the Borrower nor any Bareboat Charterer nor the Golar
       Gas Group had any liabilities (contingent or otherwise) or any unrealised
       or anticipated  losses which are not disclosed by, or reserved against or
       provided  for in,  such  financial  statements  and,  in  respect  of any
       contingent  liabilities (whether or not material),  with a description of
       the basis for the  liability and an  explanation  of why the liability is
       not deemed to be material; and

7.2.22 Solvency

       the  Borrower  and each  Guarantor  is Solvent  and will  continue  to be
       Solvent at and after the Drawdown Date.

7.3    Repetition of representations and warranties

       On and as of the Drawdown  Date and on each  Rollover  Date and any other
       date for the payment of interest  under clause 3.1, the Borrower shall be
       deemed to repeat the  representations  and warranties in clause 7.1 as if
       made with reference to the facts and  circumstances  existing on such day
       and on and as of the  Drawdown  Date,  the  Borrower  shall be  deemed to
       repeat the representations and warranties in clause 7.2.

7.4    Warranty as to future financial statements

       On and as of  each  Rollover  Date,  the  Borrower  shall  be  deemed  to
       represent  and  warrant  to each of the  Creditors  that the then  latest
       Annual Financial Statements then delivered to the Facility Agent (if any)
       have been  prepared  in  accordance  with the  Relevant  GAAP and present
       fairly and  accurately  the  financial  positions  of the  Borrower,  the
       Parent, the Bareboat Charterers,  the consolidated financial positions of
       the Golar LNG Group and the consolidated and combined  financial position
       of the  Golar  Gas  Group,  respectively  as at the end of the  financial
       period to which the same relate and the results of the  operations of the
       Borrower,  the Parent, the Bareboat Charterers,  the consolidated results
       of the  operations  of the  Golar  LNG  Group  and the  consolidated  and
       combined financial position of the Golar Gas Group,  respectively for the
       financial  period to which  the same  relate  and,  as at the end of such
       financial  period,   neither  the  Borrower,  the  Parent,  the  Bareboat
       Charterers  nor the  Golar  LNG  Group  nor the  Golar  Gas Group had any
       significant  liabilities  (contingent  or otherwise) or any unrealised or
       anticipated  losses which are not  disclosed  by, or reserved  against or
       provided for in, such financial statements.

8      Undertakings

8.1    General

       The Borrower  undertakes  with each of the Creditors that  throughout the
       Security Period it will:

8.1.1  Notice of Default

       promptly  inform the Facility Agent of any occurrence of which it becomes
       aware which in the  Borrower's  reasonable  opinion might  materially and
       adversely  affect the  ability  of any  Security  Party to perform  their
       obligations under any of the Security Documents and, without limiting the
       generality  of the  foregoing,  will  inform  the  Facility  Agent of any
       Default forthwith upon becoming aware thereof and will from time to time,
       if so requested by the Facility  Agent,  confirm to the Facility Agent in
       writing that, save as otherwise stated in such  confirmation,  no Default
       has occurred and is continuing;

8.1.2  Consents and licences

       without  prejudice to clauses 7 and 8.6,  obtain or cause to be obtained,
       maintain  in full force and effect  and comply in all  material  respects
       with  the  conditions  and  restrictions  (if  any)  imposed  in,  or  in
       connection  with,  every consent,  authorisation,  licence or approval of
       governmental  or public bodies or  authorities or courts and do, or cause
       to be done,  all  other  acts and  things  which may from time to time be
       necessary  or  desirable  under  applicable  law  for the  continued  due
       performance of all the obligations of the Security  Parties under each of
       the Security Documents;

8.1.3  Use of proceeds

       use the Loan exclusively for the purposes specified in clause 1.1;

8.1.4  Pari passu

       ensure that its obligations  under this Agreement shall at all times rank
       at least pari passu with all its other  present and future  unsecured and
       unsubordinated  Indebtedness  with the exception of any obligations which
       are mandatorily preferred by law and not by contract;

8.1.5  Financial statements, budgets, cashflows and certificates

       (a)    Accounts

              prepare  Annual  Financial   Statements  in  accordance  with  the
              Relevant GAAP  consistently  applied in respect of each  financial
              year and  cause the same to be  reported  on by the  Auditors  and
              prepare  Quarterly  Financial  Statements on the same basis as the
              Annual Financial  Statements and deliver  sufficient copies of the
              same to the Facility Agent for  distribution  to the Banks as soon
              as  practicable  but not later than one hundred  and eighty  (180)
              days (in the case of Annual  Financial  Statements)  or sixty (60)
              days (in the case of Quarterly  Financial  Statements) (or, in any
              such case,  such longer  period as may be agreed in writing by the
              Facility  Agent)  after the end of the  financial  period to which
              they relate;

       (b)    Cashflow projections etc.

              deliver  to the  Facility  Agent,  for  distribution  to the Banks
              sufficient copies of the following documents:

              (i)    not  later  than  thirty  (30)  days  after the end of each
                     financial  year,  cash  flow  projection  for the Golar Gas
                     Group for the next twelve months; and

              (ii)   at least  thirty (30) days prior to the date on which it is
                     proposed to make a payment of any Equity Distribution under
                     proviso (a) to clause 8.3.3, a statement  (certified by the
                     Chairman or  President  of the  Borrower or, in his, her or
                     their  absence,  any other  officer of the Borrower for the
                     time being  acceptable to the Facility Agent) of the amount
                     of the proposed  Equity  Distribution  and stating that the
                     payment  of  such  Equity  Distribution  will  comply  with
                     proviso (a) to clause 8.3.3;

              (iii)  Certificate of compliance with clause 8.5

                     at the same time as the  Borrower  delivers to the Facility
                     Agent,  pursuant to clause  8.1.5(a),  copies of the Annual
                     Financial  Statements or Quarterly Financial Statements (as
                     the case may be) the  Borrower  shall  provide a  statement
                     signed by the Chief  Financial  Officer or  another  senior
                     officer of the Borrower (in  substantially the form set out
                     in schedule 8) confirming:

                     (A)    the respective amounts of:

                            1)     Free Available Cash

                            2)     Current Assets and Current Liabilities

                            3)     Annualised EBITDA

                            4)     Net Debt

                            in  respect of or, as the case may be, as at the end
                            of the financial  period  expiring on the date as at
                            and for which the relevant financial statements were
                            prepared  (or,  in the  case of  Annualised  EBITDA,
                            calculated  by  reference  to the three month period
                            expiring  on such date) and that such  amounts  were
                            calculated  in  accordance  with this  Agreement and
                            Relevant GAAP;

                     (B)    that such Annual  Financial  Statements or Quarterly
                            Financial  Statements  were  prepared in  accordance
                            with  the  Relevant  GAAP  or,  if not so  prepared,
                            setting  forth  full  details  of  the   adjustments
                            required  to be made to such  statements  to reflect
                            the Relevant  GAAP as  necessary  to  calculate  the
                            amounts  referred  to in  sub-paragraph  8.1.5(b)(i)
                            above;

                     (C)    that as at the date to which the relevant  financial
                            statements   are  made  up,  the   Borrower  was  in
                            compliance with the covenants and  undertakings  set
                            out in clause (or, if it was not in such compliance,
                            indicating  the  extent of the  breach and the steps
                            intended to be taken to remedy the same); and

                     (D)    that,  as at the date not more than seven days prior
                            to the delivery of the  certificate,  no Default has
                            occurred and is  continuing  (or, if such is not the
                            case, specifying the same);

8.1.6  Delivery of reports

       deliver to the Facility Agent, for distribution to the Banks,  sufficient
       copies  for all the Banks  of, in each case at the time of issue  thereof
       every report, circular,  notice or other document issued by any member of
       the  Golar  LNG  Group to its  creditors  or (in the case of the  Parent)
       shareholders generally;

8.1.7  Provision of further information

       provide the  Facility  Agent with such  financial  and other  information
       concerning the Security Parties, other members of the Golar LNG Group and
       their  respective  affairs  as the  Facility  Agent or any  Bank  (acting
       through the Facility Agent) may from time to time reasonably require;

8.1.8  Tax filings and payment of Taxes

       file or cause to be filed  all tax  returns  required  to be filed in all
       jurisdictions  in which it and any other  members  of the Golar LNG Group
       are  situated or carry on business or are  otherwise  subject to Taxation
       and pay all Taxes  shown to be due and  payable  on such  returns  or any
       assessments  made  against it (other than those being  contested  in good
       faith where such payment may be lawfully  withheld) and adequate reserves
       have been made for such payment should it be found to be payable;

8.1.9  Legal proceedings

       upon becoming aware that the same may be threatened or pending and in any
       case  immediately  after the  commencement  thereof  give to the Facility
       Agent   notice  in  writing  of  any   litigation   or   arbitration   or
       administrative  proceedings or any dispute  affecting the Borrower or any
       other  members of the Golar LNG Group,  any of their  respective  assets,
       rights or revenues  which if determined  against it might  materially and
       adversely  affect the ability of the Borrower duly to perform and observe
       its obligations under any of the Security Documents;

8.1.10 Obligations under Security Documents

       duly and  punctually  perform  each of the  obligations  expressed  to be
       assumed by it under the Security Documents;

8.1.11 Insurance

       insure and keep insured all its properties  and assets with  underwriters
       or insurance companies of repute to such extent and against such risks as
       prudent companies  engaged in businesses  similar to its own are normally
       insured; and

8.1.12 Compliance with laws and regulations

       comply  with  the  terms  and   conditions  of  all  laws,   regulations,
       agreements,  licences and concessions  material to the carrying on of its
       business.

8.2    Valuation of Ships

8.2.1  Valuation of Ships

       (a)    Each Ship shall be valued in Dollars as at each Disposal Repayment
              Date by two independent  firms of shipbrokers one appointed by the
              Facility Agent and the other nominated by the Borrower from a list
              of firms from time to time  approved  in  writing by the  Facility
              Agent or,  failing  such  nomination  (within  seven (7) days of a
              request from the  Facility  Agent to nominate a firm) or approval,
              appointed  by the  Facility  Agent  in its sole  discretion  (each
              valuation  to be made on the basis of a sale for  prompt  delivery
              for cash at arms  length on normal  commercial  terms as between a
              willing buyer and a willing seller taking into account the benefit
              of  any  Approved  Charter  or any  other  charterparty  or  other
              engagement  concerning  each  vessel and,  if the  Facility  Agent
              requires such valuation to be made after physical inspection, with
              such physical inspection having been carried out).

       (b)    Unless  one of  such  valuations  is for an  amount  which  is one
              hundred and ten per cent. (110%) or more of the other, the mean of
              such valuations  shall constitute the value of the relevant vessel
              for the purposes of this clause 8.2. If one such  valuation is for
              such amount,  the Facility Agent shall appoint (at the cost of the
              Borrower) a third  independent  firm of  shipbrokers to value such
              vessel on the same  basis and in the same  manner  and the mean of
              all  three  such  valuations  shall  constitute  the  value of the
              relevant vessel for the purposes of this clause 8.2.

       (c)    The value of each vessel as most recently determined in accordance
              with the  provisions  of this clause 8.2 shall be binding upon the
              parties  hereto  until such time as any  further  such  valuations
              shall be obtained.

8.2.2  Information

       The Borrower  undertakes to the Facility  Agent to supply to the Facility
       Agent and to any such shipbrokers  such information  concerning each Ship
       and its  condition as such  shipbrokers  may  reasonably  require for the
       purpose of making any such valuations.

8.2.3  Costs

       All costs in connection  with the Facility Agent  obtaining any valuation
       of the Ships referred to in this clause shall be borne by the Borrower.

8.3    Negative undertakings concerning the Borrower and the Golar Gas Group

       The Borrower  undertakes  with each of the Creditors that  throughout the
       Security  Period it will not,  and will procure that none of the Bareboat
       Charterers will,  without the prior written consent of the Facility Agent
       (acting on the instructions of the Majority Banks):

8.3.1  No merger

       merge or consolidate with any other person;

8.3.2  Capital expenditure

       incur or make any capital expenditure,  except for capital expenditure in
       upgrading a Ship to meet the  requirements  of a third party charterer or
       on  upgrading  or  improving  any Ship  for  other  operational  purposes
       provided  that such  expenditure  on any Ship  does not in any  period of
       thirty (30) consecutive months exceed ten million Dollars ($10,000,000);

8.3.3  Equity Distributions

       make or pay any Equity Distribution provided however that:

       (a)    the Borrower may (subject to having first  provided the applicable
              statement and certificate  required under clause  8.1.5(b)(ii)) on
              any date (the "Relevant Date") pay or make a dividend provided:

              (i)    no Default has occurred and is continuing;

              (ii)   the  Free   Available  Cash  at  the  Relevant  Date  will,
                     following the payment of the dividend above and any related
                     withdrawal from an Earnings Account under clause 14.1.2(d),
                     equal or exceed not less than an amount equal to the sum of
                     fifteen  million Dollars  ($15,000,000)  as at the Relevant
                     Date; and

              (iii)  at the time of and during the period immediately  following
                     the payment of the dividend and any related withdrawal from
                     an Earnings Account under clause 14.1.2(d) all of the Ships
                     shall be on charter to an Approved  Charterer and each Ship
                     shall have a charter  period of not less than  twelve  (12)
                     months  remaining at a daily  charterhire  rate of not less
                     than forty thousand Dollars ($40,000) net per day per Ship;

       (b)    any  Subsidiary of the Borrower may make Equity  Distributions  to
              the Borrower or a wholly owned Subsidiary of the Borrower;

       (c)    the  Borrower  may pay  Equity  Distributions  to the Parent of an
              amount equal to all dividends and other amounts  received by Oxbow
              and/or Golar Maritime from Faraway;

8.3.4  Amendments to, and termination of, Approved Management Agreements

       agree to, or permit or suffer,  any  material  amendment  of, or material
       variation  in the terms of, or cancel or rescind or  otherwise  terminate
       any  Approved  Management   Agreement  save  for  a  termination  of  the
       appointment of any Approved Manager provided that upon such termination a
       new  Approved  Manager  has  been  appointed   pursuant  to  an  Approved
       Management  Agreement on terms  approved in writing by the Facility Agent
       (acting on the  instructions  of the Majority  Banks) (such  approval and
       instructions not to be unreasonably withheld);

8.3.5  Series of disposals

       sell,  convey,   transfer,  lease  or  otherwise  dispose  of  all  or  a
       substantial  part of the assets of the Borrower or of the Golar Gas Group
       taken as a whole (whether by one  transaction or a series of transactions
       and whether related or not and, for the avoidance of doubt the Borrower's
       interest in the share capital of Faraway shall not be deemed  substantial
       for the purpose of this clause 8.3.5);

8.3.6  Other business

       in the case of a Bareboat  Charterer,  undertake any business  other than
       the chartering and operation of its Ship and in the case of the Borrower,
       undertake  any  business  other than  leasing  the Ships from the Owners,
       chartering  the Ships to the  Bareboat  Charterers  and owning  Oxbow and
       Golar Maritime;

8.3.7  Acquisitions

       in the case of a Bareboat  Charterer,  acquire or own any further  assets
       other than its rights arising under the  Transaction  Documents and other
       contracts entered into by or on behalf of the relevant Bareboat Charterer
       in the ordinary  course of its business of  chartering  and operating its
       Ship and, in the case of the Borrower,  acquire or own any further assets
       other than its rights arising under the  Transaction  Documents and other
       contracts  entered  into by or on behalf of the  Borrower in the ordinary
       course of its business;

8.3.8  Other obligations

       in the case of a  Bareboat  Charterer,  incur  or  permit  to  exist  any
       obligations except for obligations arising under the Bareboat Charter for
       its Ship, the Approved Charter, the Approved Management Agreement for its
       Ship,  any  relevant  charter,  or the  Security  Documents  or contracts
       entered  into in the ordinary  course of its  business of  operating  and
       chartering  such Ship and, in the case of the Borrower incur or permit to
       exist any obligations  except for obligations  arising under the Security
       Documents and  contracts  entered into by or on behalf of the Borrower in
       the ordinary course of its business or the Transaction  Documents  (which
       for this  purpose  shall be the  Transaction  Documents as defined in the
       Proceeds Deed);

8.3.9  No borrowing or swaps

       incur or permit to exist any Borrowed  Money or Swap  Liabilities  of any
       member of the Golar Gas Group except for:

       (a)    Borrowed  Money  pursuant  to the  Security  Documents,  the Lease
              Documents or the L/C Documents;

       (b)    Borrowed Money owing by (i) the Borrower to any Bareboat Charterer
              or (ii) any  Bareboat  Charterer  to the Borrower (as the case may
              be);

       (c)    Eligible Swap Liabilities; and

       (d)    Subordinated Debt;

8.3.10 Repayment of borrowings

       in the case of a  Bareboat  Charterer,  repay  the  principal  of, or pay
       interest on or any other sum in connection with any of its Borrowed Money
       except for:

       (a)    Borrowed  Money owing to the Creditors or the Lessors  pursuant to
              the Security Documents or the Lease Agreements (respectively); or

       (b)    provided  no Event of  Default  has  occurred  and is  continuing,
              Borrowed  Money  owing to the  Manager or any members of the Golar
              Gas Group; or

       (c)    unless otherwise provided in the Proceeds Deed;

8.3.11 Sureties

       except pursuant to the Security  Documents,  the Lease Documents,  or the
       L/C  Documents,  permit  any of its  Indebtedness  to  any  person  to be
       guaranteed  by any person (other than the Borrower) and save (in the case
       of a member of the Golar Gas Group  which  owns or  bareboat  charters  a
       vessel) for guarantees or  indemnities  from time to time required in the
       ordinary course by any protection and indemnity or war risks  association
       with which its vessel is  entered,  guarantees  required  to procure  the
       release of such vessel from any arrest, detention,  attachment or levy or
       guarantees  or  undertakings  required for the salvage of such vessel and
       guarantees  required to obtain  certificates of financial  responsibility
       required for the lawful trading and operation of its vessel;

8.3.12 Subsidiaries

       form or  acquire  or  permit  to exist any  Subsidiaries  other  than the
       Bareboat  Charterers,  Golar  Maritime,  Oxbow or  Faraway  and any other
       direct  wholly  owned  Subsidiary  of the Borrower  incorporated  for the
       purpose of facilitating  the chartering,  management and operation of the
       Ships or other vessels;

8.3.13 Encumbrances

       permit any  Encumbrance to subsist,  arise or be created or extended over
       all or any part of its present or future undertaking,  assets,  rights or
       revenues to secure or prefer any present or future  Indebtedness or other
       liability  or any  other  obligation  of any  person  save for  Permitted
       Encumbrances;

8.3.14 Guarantees and counter indemnities

       issue, or permit to remain outstanding,  any guarantees or indemnities or
       otherwise become directly or contingently  liable for the obligations of,
       or in favour of, any  person or issue,  or permit to remain  outstanding,
       any  indemnity  or other  obligation  to reimburse or secure to any other
       person in respect of any such guarantee,  indemnity or Encumbrance issued
       or granted by such person in respect of obligations of any person except:

       (a)    pursuant to the Security Documents or the Lease Agreements;

       (b)    guarantees  or  indemnities  from  time  to time  required  in the
              ordinary  course  by any  protection  and  indemnity  or war risks
              association with which a vessel which it owns is entered;

       (c)    guarantees required to procure the release of such vessel from any
              arrest,   detention,   attachment   or  levy  or   guarantees   or
              undertakings required for the salvage of such a vessel; or

       (d)    guarantees  by the  Borrower  (but not  guarantees  in  respect of
              Borrowed Money or Swap  Liabilities if such Borrowed Money or Swap
              Liabilities  are not  permitted  by the  express  terms of  clause
              8.3.9)  of   obligations   of  their   respective   wholly   owned
              Subsidiaries  (except Oxbow,  Golar Maritime and Faraway)  arising
              under  agreements  entered into by them in the ordinary  course of
              their businesses;

8.3.15 Loans

       make or  permit  to be  outstanding  any  loans or grant or  permit to be
       outstanding any credit to any person or agree to do so other than:

       (a)    customary  trade  credit to third party  customers in the ordinary
              course of business; and

       (b)    loans  to the  Parent  in  order  to  facilitate  cash  management
              provided  that  the  requirements  set out in this  Agreement  for
              Equity   Distribution   have  been  met  and/or  to  wholly  owned
              Subsidiaries  of the Borrower  (except  Oxbow,  Golar Maritime and
              Faraway);

       (c)    the deposit of funds with an Account Bank by crediting the same to
              an Earnings Account; and

       (d)    loans to the Bareboat Charterers from the Borrower.

8.3.16 Disposals

       sell,  transfer,  lend or otherwise dispose of any part of its present or
       future undertaking,  assets, rights or revenues to any person (other than
       to the Borrower or a wholly owned  Subsidiary of the Borrower) unless the
       Borrower  has  previously  notified  the  Facility  Agent in writing  and
       demonstrates  to the  satisfaction  of the Majority Banks that such sale,
       transfer, loan or other disposal will be on arms length terms and for not
       less than open market value;

8.3.17 Accounting reference date

       change its annual accounting reference date from 31 December;

8.3.18 Chartering-in

       charter-in or hire any vessel from any person; or

8.3.19 Sale and leaseback transactions

       directly or indirectly, enter into, assume, guarantee or otherwise become
       liable  with  respect to any sale and  leaseback  transaction  (being for
       these purposes an arrangement relating to property now owned or hereafter
       acquired  whereby the Borrower or a Subsidiary of the Borrower  transfers
       such  property  to a person  and  leases  it back from  such  person  and
       accounted for as a Capitalised Lease Obligation).

8.4    Ship covenants

       The Borrower  hereby  covenants with each of the Creditors and undertakes
       throughout  the Security  Period that it and/or each  Bareboat  Charterer
       will:

8.4.1  Insurance

       (a)    Insured risks, amounts and terms

              insure and keep its Ship  insured  free of cost and expense to the
              Security Agent and in the joint names of the relevant  Lessor (or,
              following a Standby Ship Disposition,  the Standby Purchaser), the
              Borrower and the relevant  Bareboat  Charterer (but in the case of
              the insurances  referred to in  sub-paragraph  (i) below, no other
              person,  save with the prior written consent of the Security Agent
              and subject to such person having,  if so required by the Security
              Agent and to the  satisfaction of the Security  Agent,  executed a
              first priority  assignment in favour of the Security Agent of such
              person's  interest in the Insurances of such Ship on similar terms
              to the  assignment  by the  Borrower in the  relevant  Three Party
              Deed) or, if so required by the Security Agent, in the joint names
              of the relevant Lessor (or,  following a Standby Ship Disposition,
              the Standby  Purchaser)  , the  Borrower,  the  relevant  Bareboat
              Charterer and the Security  Agent,  the Facility  Agent and/or the
              Banks (but without  liability  on the part of the Security  Agent,
              the Facility Agent and/or the Banks for premiums or calls):

              (i)    against  fire and  usual  marine  risks  (including  excess
                     risks) and war risks,  on an agreed  value  basis,  in such
                     amounts  (but not in any event  less than the higher of (1)
                     one  hundred  and twenty per cent.  (120%) of the  Relevant
                     Insured  Amount for such Ship and (2) its  market  value as
                     most  recently  determined  in  accordance  with clause 8.2
                     prior to the  commencement  of the  period of the  relevant
                     policy)  and upon such  terms as shall from time to time be
                     approved in writing by the Security Agent;

              (ii)   against protection and indemnity risks (including pollution
                     risks  for  a  minimum   amount  of  one  billion   Dollars
                     ($1,000,000,000)  or such higher or lower maximum amount of
                     cover  against  pollution  risks  as  shall  at any time be
                     available  by  entry  of the  relevant  Ship  with,  and/or
                     arrangement  by,  and/or  under any cover  arranged  by, or
                     through either a protection and indemnity association which
                     is a member of the "International  Group" of protection and
                     indemnity   associations  (or  any  successor  organisation
                     designated  by the Security  Agent for this purpose) or, if
                     the  International  Group or any such  successor  ceases to
                     exist or  ceases  to  provide  or  arrange  any  cover  for
                     pollution  risks, or any  supplemental  cover for pollution
                     risks over and above that  afforded  by the basic  entry of
                     the Ship with its protection and indemnity association, the
                     maximum  aggregate amount of cover against  pollution risks
                     as shall be available on the open market and by basic entry
                     with a protection and indemnity  association provided that,
                     if the Ship in question has ceased  trading or is in lay up
                     (and its cargo  fully  discharged)  and in either  case has
                     discharged  all cargo,  the level of pollution  risks cover
                     afforded  by  ordinary   protection  and  indemnity   cover
                     available  through a member of the  International  Group or
                     such successor  organisation or, as the case may be, on the
                     open market in such  circumstances  shall be sufficient for
                     such  purpose)  for ships of the same type,  size,  age and
                     flag as the  relevant  Ship) for the full value and tonnage
                     of such Ship (as approved in writing by the Security Agent)
                     and upon such terms as shall from time to time be  approved
                     in writing by the Security Agent; and

              (iii)  in respect of any Ship  which is not at the  relevant  time
                     chartered by demise  (which  shall not,  for this  purpose,
                     include pursuant to the Bareboat Charters), against loss of
                     hire in such  amounts  (but in any  event not less than the
                     rate of charterhire  payable under the relevant charter for
                     such  Ship) and upon such  terms as shall from time to time
                     be approved in writing by the Security Agent;

                     and  pay the  Security  Agent  the  cost  (as  conclusively
                     certified by the Security Agent) of:

                     (A)    mortgagees'  interest  insurance  and/or  additional
                            perils  (pollution)  cover which the Security  Agent
                            may from time to time  effect in respect of any Ship
                            or all of the  Ships  upon  such  terms  and in such
                            amount (not exceeding an amount equal to one hundred
                            and twenty per cent.  (120%) of the Relevant Insured
                            Amount  for  such  Ship or (as the case may be where
                            all of the Ships are so  insured  under one  policy)
                            one hundred and twenty per cent.  (120%) of the Loan
                            prior  to  the  commencement  of the  period  of the
                            relevant policy) as the Security Agent acting on the
                            instructions   of  the  Majority  Banks  shall  deem
                            desirable;

                     (B)    any other  insurance  cover which the Security Agent
                            may from time to time  effect in respect of any Ship
                            and/or in respect of the  interest  of any or all of
                            the  Creditors in relation to such Ship or potential
                            third party liability of any or all of the Creditors
                            in relation to such Ship as the Security Agent shall
                            reasonably  deem desirable  having regard to (x) any
                            limitations  in respect of amount or extent of cover
                            which may from time to time be  applicable to any of
                            the  other  insurances  referred  to in this  clause
                            8.4.1(a) and are not  customarily  applicable on the
                            date of this Agreement  and/or (y) any change in the
                            practice of leading banks providing loans to finance
                            ships which carry  Pollutants  as to the  insurances
                            which they require to be taken out to protect  their
                            security   interests  in  such  ships  and/or  their
                            liability  to  third  parties  as a  consequence  of
                            financing   such  ships  and/or  taking  a  security
                            interest  in  such  ships   and/or  (z)  changes  of
                            applicable   laws  (or  the   judicial  or  official
                            interpretation  thereof)  concerning the priority of
                            Environmental   Claims  as  against  ship  mortgages
                            and/or the  liability of  mortgagees  and lenders in
                            relation to Environmental Claims;

       (b)    Approved brokers, insurers and associations

              effect the insurances  aforesaid in Dollars or such other currency
              as the Security Agent may approve and through the Approved Brokers
              (if any) and with such insurance  companies and/or underwriters as
              shall from time to time be  approved  in  writing by the  Security
              Agent;  provided however that the insurances against war risks and
              protection and indemnity risks may be effected by the entry of any
              Ship with such war risks and protection and indemnity associations
              as shall from time to time be approved in writing by the  Security
              Agent;

       (c)    Fleet liens, set-off and cancellation

              if any of the insurances referred to in 8.4.1(a)(i) form part of a
              fleet  cover,  procure  that the  Approved  Brokers  shall  (if so
              required by the Security  Agent)  undertake to the Security  Agent
              that they shall  neither  set off against any claims in respect of
              any Ship any premiums due in respect of other  vessels  under such
              fleet cover or any premiums due for other  insurances,  nor cancel
              the  insurance  for reason of  non-payment  of premiums  for other
              vessels  under  such  fleet  cover or of  premiums  for such other
              insurances,  and shall  undertake  to issue a  separate  policy in
              respect  of each  Ship if and when so  requested  by the  Security
              Agent;

       (d)    Payment of premiums and calls

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

       (e)    Renewal

              at  least  fourteen  (14)  days  (or such  shorter  period  as the
              Security  Agent may from time to time agree)  before the  relevant
              policies,  contracts or entries expire,  notify the Security Agent
              of the names of the  brokers  and/or the war risks and  protection
              and  indemnity   associations  proposed  to  be  employed  by  the
              Borrower,  the relevant Bareboat  Charterer or any other party for
              the purposes of the renewal of such  insurances and of the amounts
              in which such  insurances are proposed to be renewed and the risks
              to be covered and,  subject to compliance with any requirements of
              the Security Agent pursuant to this clause 8.4.1(a),  procure that
              appropriate instructions for the renewal of such insurances on the
              terms so specified are given to the Approved Brokers and/or to the
              approved war risks and  protection and indemnity  associations  at
              least ten (10) days (or such shorter  period as the Security Agent
              may  from  time to  time  agree)  before  the  relevant  policies,
              contracts or entries expire,  and that the Approved Brokers and/or
              the approved war risks and protection  and indemnity  associations
              will at least  seven (7) days  before  such expiry (or within such
              shorter  period as the Security Agent may from time to time agree)
              confirm in writing to the Security Agent as and when such renewals
              have been effected in accordance with the instructions so given;

       (f)    Guarantees

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

       (g)    Hull policy documents,  notices, loss payable clauses and brokers'
              undertakings

              deposit with the Approved  Brokers (or procure the deposit of) all
              slips,  cover  notes,  policies,  certificates  of  entry or other
              instruments  of insurance  from time to time issued in  connection
              with such of the insurances  referred to in clause  8.4.1(a)(i) as
              are  effected  through the  Approved  Brokers and procure that the
              interest of the Security  Agent,  the Facility Agent and the Banks
              shall be endorsed  thereon by  incorporation  of the relevant Loss
              Payable  Clause  and  by  means  of  a  Notice  of  Assignment  of
              Insurances  (signed by the  relevant  Lessor,  the  Borrower,  the
              relevant  Bareboat  Charterer  and by any other  assured who shall
              have  assigned  its  interest in the  Insurances  to the  Security
              Agent) and that the  Security  Agent shall be  furnished  with pro
              forma copies thereof and, unless the insurances are placed, to the
              satisfaction  of  the  Security  Agent,  upon  the  terms  of  the
              Norwegian  Marine  Insurance Plan of 1996 as amended,  a letter or
              letters of undertaking  from the Approved  Brokers in such form as
              shall from time to time be required by the Security Agent;

       (h)    Associations' loss payable clauses, undertakings and certificates

              procure  that  any  protection  and  indemnity  and/or  war  risks
              associations in which any Ship is for the time being entered shall
              endorse  the  relevant   Loss  Payable   Clause  on  the  relevant
              certificate  of entry or policy  and shall  furnish  the  Security
              Agent  with a copy of such  certificate  of entry or  policy  and,
              unless the  insurances  are  placed,  to the  satisfaction  of the
              Security Agent,  upon the terms of the Norwegian  Marine Insurance
              Plan of 1996 as  amended,  a letter or letters of  undertaking  in
              such form as shall from time to time be required  by the  Security
              Agent;

       (i)    Extent of cover and exclusions

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

       (j)    Independent report

              if so  requested  by the  Security  Agent  where there has, in the
              reasonable  opinion  of the  Security  Agent,  been a  significant
              change  in  circumstances  or the  insurance  arrangements  or the
              status of any insurer or association  which may, in the reasonable
              opinion of the Security Agent,  affect the interests of the Banks,
              but at the cost of the Borrower,  furnish the Security  Agent from
              time to time with a detailed report signed by an independent  firm
              of  marine  insurance  brokers  appointed  by the  Security  Agent
              dealing with the insurances maintained on any Ship and stating the
              opinion of such firm as to the adequacy thereof;

       (k)    Collection of claims

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

       (l)    Employment of Ships

              not employ any Ship or suffer such Ship to be  employed  otherwise
              than in conformity with the terms of the Insurances (including any
              warranties express or implied therein) without first obtaining the
              consent of the insurers to such employment and complying with such
              requirements  as to extra premium or otherwise as the insurers may
              prescribe;

       (m)    Application of recoveries

              apply all sums receivable  under the Insurances  which are paid to
              the Borrower and/or the relevant Bareboat  Charterer in accordance
              with the Loss Payable  Clauses in repairing  all damage  and/or in
              discharging the liability in respect of which such sums shall have
              been received;

       (n)    Further insurance assignments

              unless the relevant Ship is insured  against the risks referred to
              in clause  8.4.1(a)(i)  upon the terms of the Norwegian  Insurance
              Plan of 1996 as amended,  not permit the insurances referred to in
              such clause to be  effected in the name of any person  (other than
              the Security Agent and/or the other Creditors)  unless such person
              has to the  satisfaction  of the Security  Agent  executed a first
              priority  assignment  in  favour  of the  Security  Agent  of such
              person's  interest in the Insurances of such Ship on similar terms
              (mutatis  mutandis)  to the  assignment  by the  Borrower  and the
              relevant Bareboat Charterer in the relevant Three Party Deed;

8.4.2  Ship's name and registration

       (a)    not  change  the  name of any Ship  without  first  notifying  the
              Facility Agent;

       (b)    keep each Ship registered  under the laws of its Flag State at the
              relevant  Port of Registry  (and for the  avoidance of doubt,  the
              Ship known as "Golar  Spirit"  can be  reflagged  to the  Marshall
              Islands  register  provided that the Marshall  Islands  Conditions
              have been satisfied as confirmed by the Facility Agent);

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

       (d)    not register any Ship or permit its  registration  under any other
              flag or at any other port without the prior written consent of the
              Facility Agent (and for the avoidance of doubt,  the Ship known as
              "Golar Spirit" can be reflagged to the Marshall Islands register);

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

8.4.3  Repair

       keep  each  Ship  and its  equipment,  outfit  and  appurtenances  tight,
       staunch,  strong, in good condition and in all respects seaworthy and fit
       for its intended  service and in a good and efficient state of repair and
       procure that all repairs to or replacement  of any damaged,  worn or lost
       parts  or  equipment  are  effected  in  such  manner  (both  as  regards
       workmanship  and quality of  materials)  as not to diminish  the value of
       such Ship;

8.4.4  Modification; removal of parts; equipment owned by third parties

       not without the prior written consent of the Security Agent or suffer any
       other person to:

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

       (b)    remove any material part of any Ship or any equipment the value of
              which is such that its  removal  from such Ship  would  materially
              reduce  the value of such  Ship  without  replacing  the same with
              equivalent  parts or  equipment  which are  owned by the  relevant
              Lessor free from Encumbrances (other than Permitted Encumbrances);
              or

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

8.4.5  Maintenance of class; compliance with regulations

       at all times and without cost or expense to any Creditor  comply with and
       ensure that its Ship at all times  complies  with the  provisions  of the
       Merchant Shipping Acts and all regulations and requirements (statutory or
       otherwise) from time to time applicable to vessels registered at the Port
       of Registry or  otherwise  applicable  to its Ship and keep its Ship,  or
       cause  her to be  kept,  in such  condition  as will  entitle  her to the
       highest classification and rating for vessels of the same age and type in
       the  Classification  Society  or  other  classification  society  of like
       standing  approved by the Facility  Agent and to deliver  annually to the
       Facility  Agent a  certificate  from  such  class  society  showing  such
       classification  to be maintained  and will without cost or expense to the
       Facility Agent irrevocably and unconditionally instruct and authorise the
       classification  society of its Ship, and shall request the classification
       society to give an undertaking to the Security Agent as follows:

       (a)    to send to the  Facility  Agent,  following  receipt  of a written
              request  from the  Facility  Agent,  certified  true copies of all
              original class records held by the classification society relating
              to the Ship;

       (b)    to allow the Facility Agent (or its agents),  at any time and from
              time to time, to inspect the original class and related records of
              the relevant Bareboat Charterer and its Ship at the offices of the
              classification society and to take copies of them;

       (c)    following receipt of a written request from the Facility Agent:

              (i)    to advise of any facts or  matters  which may  result in or
                     have  resulted  in a  change,  suspension,  discontinuance,
                     withdrawal or expiry of any Ship's class under the rules or
                     terms and conditions of the relevant  Bareboat  Charterer's
                     or the relevant  Ship's  membership  of the  classification
                     society; and

              (ii)   to confirm that the relevant  Bareboat  Charterer is not in
                     default   of  any  of  its   contractual   obligations   or
                     liabilities  to the  classification  society  and,  without
                     limiting the  foregoing,  that it has paid in full all fees
                     or other  charges  due and  payable  to the  classification
                     society; and

              (iii)  if the relevant Bareboat  Charterer is in default of any of
                     its   contractual   obligations   or   liabilities  to  the
                     classification society, to specify to the Facility Agent in
                     reasonable  detail  the  facts  and  circumstances  of such
                     default,  the consequences  thereof,  and any remedy period
                     agreed or allowed by the classification society; and

              (iv)   to notify the Facility Agent  immediately in writing if the
                     classification   society  receives  notification  from  any
                     Bareboat  Charterer  or any  other  person  that  a  Ship's
                     classification society is to be changed.

              Notwithstanding  the above instructions and undertakings given for
              the benefit of the Facility Agent,  each Bareboat  Charterer shall
              continue to be responsible to the  classification  society for the
              performance  and discharge of all its  obligations and liabilities
              relating to or arising out of or in  connection  with the contract
              it has with the  classification  society,  and  nothing  herein or
              therein shall be construed as imposing any obligation or liability
              of the Facility Agent to the classification society;

8.4.6  Surveys

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

8.4.7  Inspection

       ensure that the Facility Agent,  by surveyors or other persons  appointed
       by it for  such  purpose,  may  board  any Ship at all  reasonable  times
       without  interfering  with the  operation of such Ship for the purpose of
       inspecting her and to afford all proper  facilities for such  inspections
       and for this purpose to give to the  Facility  Agent  reasonable  advance
       notice of any intended drydocking of any Ship (whether for the purpose of
       classification,  survey or otherwise)(provided  that any such surveyor or
       other person shall undertake  confidentiality  with respect to disclosure
       of the results of such  inspection  to any third  parties  other than the
       Creditors and their advisers);

8.4.8  Prevention of and release from arrest

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

8.4.9  Employment

       not employ  any Ship or permit her  employment  in any  manner,  trade or
       business which is forbidden by international law, or which is unlawful or
       illicit  under  the  law of any  relevant  jurisdiction,  or in  carrying
       illicit or prohibited goods, or in any manner whatsoever which may render
       her liable to condemnation in a prize court, or to destruction,  seizure,
       confiscation,  penalty or sanctions  and, in the event of  hostilities in
       any part of the world  (whether  war be declared or not),  not employ any
       Ship or permit her employment in carrying any contraband  goods, or enter
       or trade to or to continue to trade in any zone which has been declared a
       war zone by any  Government  Entity or by the  relevant  Ship's war risks
       insurers  unless  the prior  written  consent  of the  Facility  Agent is
       obtained  and such  special  insurance  cover as the  Facility  Agent may
       require  shall have been effected by the relevant  Bareboat  Charterer at
       its expense;

8.4.10 Information

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

8.4.11 Notification of certain events

       notify  the  Facility  Agent  forthwith  by  telefax  or  other  means of
       telecommunication  in  permanent  written  form  thereafter  confirmed by
       letter of:

       (a)    any damage to any Ship requiring repairs the cost of which will or
              might exceed its Casualty Amount;

       (b)    any  occurrence in consequence of which any Ship has or may become
              a Total Loss;

       (c)    any requisition of any Ship for hire;

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

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

       (f)    the  occurrence  of any material  Environmental  Claim against the
              relevant Bareboat  Charterer,  any Ship or any other member of the
              Golar  LNG  Group  or any  other  ship  from  time to time  owned,
              technically  managed or crewed by, or bareboat  chartered  to, any
              member  of  the  Golar  LNG  Group  or  any  incident,   event  or
              circumstances  which may give rise to any such Environmental Claim
              or an Event of Default specified in clause 10.1.25;

8.4.12 Payment of outgoings and evidence of payments

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

8.4.13 Encumbrances

       not without the prior written consent of the Facility Agent acting on the
       instructions  of all  of  the  Banks  (and  then  only  subject  to  such
       conditions  as the  Facility  Agent may  impose in  accordance  with such
       instructions)  create or purport or agree to create or permit to arise or
       subsist any Encumbrance  (other than Permitted  Encumbrances)  over or in
       respect of any Ship,  any share or interest  therein or in any other part
       of the  Property  (as  defined in the Three Party Deed in respect of such
       Ship) or the Assigned Property (as defined in the Security  Assignment in
       respect of such Ship);

8.4.14 Sale or other disposal

       not without the prior written consent of the Facility Agent acting on the
       instructions  of the  Majority  Banks  (and  then  only  subject  to such
       conditions  as the  Facility  Agent may  impose in  accordance  with such
       instructions)  arrange or concur in the sale,  any agreement to sell, the
       transfer,  abandonment or other  disposition  (whether pursuant to clause
       3.3 of any  Lease  Agreement  or  otherwise)  of any Ship or any share or
       interest  therein  if the Net Sale  Proceeds  of such Ship will or may be
       insufficient to enable the Borrower to comply with its obligations  under
       clause  4.4 of  this  Agreement  arising  upon  the  sale  of  such  Ship
       (including  (without  limitation)  prepayment  in  full  of the  Loan  if
       required  by  clause  4.2  or  4.4)  and  the   Borrower  has  not  first
       demonstrated  to the reasonable  satisfaction  of the Facility Agent that
       the  Borrower  will have other funds  available  to it provided by way of
       Equity  Finance  to  enable  it to  comply  with  such  obligations  upon
       completion of the sale of such Ship;

8.4.15 Chartering

       except pursuant to the relevant  Bareboat Charter and an Approved Charter
       referred to in part 2 of schedule 2 (in the case of a Bareboat Charterer)
       not without the prior written consent of the Facility Agent acting on the
       instructions  of the Lead Arrangers  (which the Facility Agent shall have
       full liberty to withhold in accordance  with such  instructions)  and, if
       such consent is given,  only subject to such  conditions  as the Facility
       Agent may impose:

       (a)    let any Ship on demise charter for any period;

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

       (c)    de-activate or lay up the relevant Ship;

       (d)    let any Ship other than on arms' length terms;

              provided always that:

              (i)    such  consent   shall  not  be  withheld  if  the  proposed
                     charterer  or  charter  guarantor  has a long  term  credit
                     rating of at least  BBB+  from  Standard  & Poor's  Ratings
                     Services and Baa1 from Moodys  Investors  Services  Inc. or
                     any other rating agency approved in writing by the Facility
                     Agent for such purpose; and

              (ii)   in respect of the matters  referred to in  sub-paragraph of
                     this  sub-clause  the  Facility  Agent's  consent  shall be
                     deemed to have been given thereto if the Borrower shall not
                     have been informed by the Facility  Agent either in writing
                     or by word of mouth that such  consent  is  refused  within
                     five (5) Banking  Days (in London) of the time at which the
                     relevant Bareboat Charterer's  application for such consent
                     was received by the Facility Agent;

8.4.16 Sharing of Earnings

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

8.4.17 Payment of Earnings

       to procure that the  Earnings of any Ship are paid to the Security  Agent
       at all  times  if and when the same  shall  be or shall  have  become  so
       payable in accordance  with the Security  Documents and that any Earnings
       of any Ship which are so payable and which are in the hands of a Bareboat
       Charterer's brokers or agents are duly accounted for and paid over to the
       Security Agent forthwith on demand;

8.4.18 Repairers' liens

       not without the prior written  consent of the Facility Agent put any Ship
       into the possession of any person for the purpose of work being done upon
       her unless:

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

              (ii)   any such lien of such person would be a Permitted Lien; or

              (iii)  the cost of work is covered by  insurance  proceeds and the
                     underwriters  have agreed to make  payment  directly to the
                     person who is to carry out the work; or

              (iv)   it has access to funds in an amount sufficient to cover the
                     cost  of  such  work  and  has  demonstrated  that  to  the
                     satisfaction of the Facility Agent;

8.4.19 Manager

       not appoint a manager of any Ship other than an Approved Manager;

8.4.20 Notice of Mortgage

       place and at all times and  places  retain a properly  certified  copy of
       each Mortgage (which shall form part of the relevant Ship's documents) on
       board each Ship with her papers  and cause  such  certified  copy of such
       Mortgage to be exhibited to any and all persons having business with such
       Ship which might create or imply any commitment or encumbrance whatsoever
       on or in respect  of such Ship  (other  than a lien for crew's  wages and
       salvage) and to any  representative  of the Security  Agent and place and
       keep  prominently  displayed in the  navigation  room and in the Master's
       cabin of each Ship (for so long as it is owned by the relevant  Lessor) a
       framed printed notice in plain type, prior to a Standby Ship Disposition,
       in such form as the Security  Agent shall notify the Borrower  and/or the
       relevant  Bareboat  Charterer and,  following a Standby Ship disposition,
       reading as follows:

       "NOTICE OF MORTGAGE"

              This Ship is subject  to a first  priority  mortgage  in favour of
              Nordea  Bank  Norge ASA of P.O.  Box 1166,  Sentrum,  0107,  Oslo,
              Norway.  Under the said  mortgage,  neither the  Borrower  nor any
              charterer  nor the  Master  of this Ship has any  right,  power or
              authority to create,  incur or permit to be imposed upon this Ship
              any commitments or encumbrances  whatsoever  other than for crew's
              wages and salvage".

       and in terms of the said notice it is hereby agreed that save and subject
       as otherwise herein provided, neither the relevant Bareboat Charterer nor
       any other  charterer  nor the Master of any Ship nor any other person has
       any right,  power or authority  to create,  incur or permit to be imposed
       upon any Ship  any lien  whatsoever  other  than  for  crew's  wages  and
       salvage;

8.4.21 Conveyance on default

       where a Ship is (or is to be) sold in exercise of any power  contained in
       the relevant Mortgage or otherwise  conferred on the Mortgagee,  execute,
       forthwith  upon  request by the Security  Agent  pursuant to the Security
       Assignment,  such form of conveyance  of such Ship as the Security  Agent
       may require;

8.4.22 Anti-drug abuse

       without  prejudice  to  clause  8.4.9,  take  all  necessary  and  proper
       precautions to prevent any  infringements  of the Anti-Drug  Abuse Act of
       1986  of  the  United  States  of  America  or  any  similar  legislation
       applicable to any Ship in any  jurisdiction in or to which any Ship shall
       be employed or located or trade or which may  otherwise be  applicable to
       any  Ship  and/or  the  relevant  Owner  and/or  the  relevant   Bareboat
       Charterer;

8.4.23 Compliance with Environmental Laws

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

8.4.24 Compliance

       comply at all material  times in all material  respects with the ISM Code
       and, to the extent applicable, the ISPS Code.

8.5    Financial undertakings

       The  Borrower  undertakes  with  each  of the  Creditors  throughout  the
       Security Period that it will ensure that:

8.5.1  Free Available Cash

       at all  times the Free  Available  Cash  shall  not be less than  fifteen
       million Dollars ($15,000,000);

8.5.2  Working Capital

       as at the  end of each  quarterly  period  during  and at the end of each
       financial  year of the Borrower,  the ratio of Current  Assets to Current
       Liabilities shall not be less than one (1) to one (1); and

8.5.3  Leverage

       as at the end of each  quarterly  period during and as at the end of each
       financial  year of the  Borrower,  the ratio of Net Debt as at the end of
       such period to Annualised  EBITDA calculated by reference to such quarter
       shall  not  exceed  five  (5) to one  (1) for  all  subsequent  quarterly
       periods.

8.6    Undertakings concerning Approved Charters and Charter Guarantees

       The Borrower  hereby  undertakes with each of the Creditors that it will,
       and will procure (where  applicable)  that the Bareboat  Charterers will,
       throughout the Security Period:

8.6.1  Negative undertakings

       not,  without the previous  written  consent of the Facility  Agent (such
       consent not to be unreasonably withheld):

       (a)    Variations

              agree to any material  variation  of any  Approved  Charter or any
              Charter Guarantee; or

       (b)    Releases and waivers

              release any Approved  Charterer or Charter  Guarantor  from any of
              its  material  obligations  under an  Approved  Charter or Charter
              Guarantee  or  waive  any  breach  of  its  material   obligations
              thereunder  or consent to any such act or  omission of an Approved
              Charterer or Charter Guarantor as would otherwise  constitute such
              breach; or

       (c)    Termination

              terminate an Approved Charter for any reason whatsoever;

8.6.2  Performance of charter obligations

       perform  its  obligations   under  each  Approved  Charter  and  use  all
       reasonable  endeavours  to procure  that the Approved  Charterer  and any
       Charter  Guarantor shall perform their respective  obligations  under the
       Approved Charter and any Charter Guarantee;

8.6.3  Information

       supply to the Facility Agent all  information,  accounts and records that
       may be necessary or of assistance to enable the Facility  Agent to verify
       the amount of all payments of  charterhire  and any other amount  payable
       under any Approved Charter and/or the Charter Guarantee; and

8.6.4  Assignability of charters

       enter into an Approved Charter in respect of any Ship the nature or terms
       of which do not permit the rights of the relevant  Bareboat  Charterer to
       receive  moneys under such  charter to be assigned to the Security  Agent
       pursuant to the relevant Three Party Deed.

8.7    Undertakings concerning Lease Agreements and Bareboat Charters

       The Borrower  hereby  undertakes with each of the Creditors that it will,
       and will procure (where  applicable)  that the Bareboat  Charterers will,
       throughout the Security Period:

8.7.1  Negative undertakings

       not,  without the previous  written  consent of the Facility  Agent (such
       consent not to be unreasonably withheld):

       (a)    Variations

              agree to any  material  variation  of any Lease  Agreement  or any
              Transaction Document; or

       (b)    Releases and waivers

              release any other party to a Lease Agreement or a Bareboat Charter
              from any of its  obligations  under a Lease  Agreement or Bareboat
              Charter  or waive any  breach  of its  obligations  thereunder  or
              consent to any such act or  omission of any other party to a Lease
              Agreement or a Bareboat Charter as would otherwise constitute such
              breach; or

       (c)    Termination

              terminate a Lease  Agreement or a Bareboat  Charter for any reason
              whatsoever;

8.7.2  Performance of charter obligations

       perform  its  obligations  under each  Lease  Agreement  or any  Approved
       Management  Agreement and use all  reasonable  endeavours to procure that
       the  other  party  to  any  relevant  Lease  Agreement  or  any  Approved
       Management  Agreement  shall  perform  its  obligations  under  the Lease
       Agreement or any Approved Management Agreement;

8.7.3  Information

       supply to the Facility Agent all  information,  accounts and records that
       may be necessary or of assistance to enable the Facility  Agent to verify
       the amount of all payments of charterhire and any other amount payable by
       any person under any Lease Agreement or Bareboat Charter; and

8.7.4  Assignability of charters

       enter into a Bareboat  Charter in respect of any Ship the nature or terms
       of which do not permit the rights of the  Bareboat  Charterer  to receive
       moneys under such charter to be assigned to the Security  Agent  pursuant
       to the relevant Three Party Deed.

9      Conditions

9.1    Documents and evidence

       The  obligation of each Bank to make its  Commitment  available  shall be
       subject  to the  receipt  by the  Facility  Agent or its duly  authorised
       representative:

9.1.1  on the date of this  Agreement or by such later date (no later than three
       (3) Banking Days before the Drawdown  Date or such shorter  period as the
       Facility Agent may, in its absolute  discretion,  agree) of the documents
       and evidence specified in part 1 of schedule 4; and

9.1.2  on or prior to the Drawdown Date, of the documents and evidence specified
       in part 2 of schedule 4,

       in each case in form and substance satisfactory to the Facility Agent.

9.2    General conditions precedent

       The  obligation of each Bank to make its  Commitment  available  shall be
       further subject to:

9.2.1  the  representations and warranties in clause 7 being true and correct on
       the  Drawdown  Date as if each was made  with  respect  to the  facts and
       circumstances existing at such time; and

9.2.2  no Default  having  occurred and  continuing  at the time of the Drawdown
       Date.

9.3    Waiver of conditions precedent and subsequent

       The  conditions  specified in this clause 9 are  inserted  solely for the
       benefit of the Creditors and may be waived by the Facility  Agent (acting
       on the instructions of all the Banks) in whole or in part with or without
       conditions.

10     Events of Default

10.1   Events

       There shall be an Event of Default if:

10.1.1 Non-payment:  any Security Party fails to pay any sum due by it under any
       of the Security  Documents at the time, in the currency and in the manner
       stipulated in the Security Documents (and so that, for this purpose, sums
       payable on demand shall be treated as having been paid at the  stipulated
       time if paid within  three (3) Banking  Days of demand) and such  failure
       continues  for more than three (3) Banking Days after  written  notice of
       non-payment by the Facility Agent; or

10.1.2 Breach of Insurance  and certain other  obligations:  the Borrower or any
       relevant   Bareboat   Charterer  fails  to  obtain  and/or  maintain  the
       Insurances in accordance with the requirements of the Security  Documents
       for any of the Ships or if any  insurer  in  respect  of such  Insurances
       cancels the Insurances or disclaims  liability by reason, in either case,
       of  mis-statement  in any  proposal for the  Insurances  or for any other
       failure or default on the part of the Borrower or any Bareboat  Charterer
       or any other  person or the  Borrower  commits  any breach of or omits to
       observe any of the obligations or undertakings expressed to be assumed by
       it under clauses 8.3 or 8.5 to 8.7 (inclusive); or

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

10.1.4 Misrepresentation:  any  representation  or warranty made or deemed to be
       made or repeated by or in respect of any Security Party in or pursuant to
       any of the Security Documents or in any notice,  certificate or statement
       referred to in or  delivered  under any of the  Security  Documents is or
       proves to have been incorrect or misleading in any material  respect when
       made or deemed to be made or repeated; or

10.1.5 Cross-default: at any time the aggregate amount at such time of:

       (a)    any Borrowed  Money or Swap  Liabilities  of any Security Party or
              any other member of the Golar LNG Group which is not paid when due
              and remains unpaid;

       (b)    any Borrowed  Money of any  Security  Party or any other member of
              the Golar LNG Group which has become  (whether by  declaration  or
              automatically  in  accordance  with  the  relevant   agreement  or
              instrument constituting the same), or is capable of being declared
              due and  payable  prior to the date when it would  otherwise  have
              become due  (unless as a result of the  exercise  by the  relevant
              person  of a  voluntary  right  of  prepayment  or upon  mandatory
              prepayment  as a result of a change of law or other  circumstances
              not  constituting  an event of  default  under,  or breach of, any
              agreement regulating and/or securing the relevant Borrowed Money);

       (c)    any facility or commitment  available to any Security Party or any
              other  member of the Golar LNG Group  relating to  Borrowed  Money
              which has been withdrawn,  suspended or cancelled by reason of any
              default (however described) of the person concerned;

       (d)    the amount of Swap  Liabilities of any Security Party or any other
              member of the Golar LNG Group  which are due or  capable  of being
              declared due upon early termination of the relevant transaction by
              the relevant counterparty; and

       (e)    any  amounts  demanded  of,  but not paid  when due and  remaining
              unpaid by any Security  Party or any other member of the Golar LNG
              Group under any  guarantee  in respect of  Borrowed  Money or Swap
              Liabilities

       exceeds five million Dollars ($5,000,000); or

10.1.6 Legal  process:  any  judgment or order made  against the Borrower is not
       stayed or complied with within thirty (30) days or a creditor attaches or
       takes  possession of, or a distress,  execution,  sequestration  or other
       process  is  levied  or  enforced  upon or  sued  out  against,  all or a
       substantial part of the undertakings,  assets,  rights or revenues of the
       Borrower and is not discharged within thirty (30) days; or

10.1.7 Insolvency:  the Borrower  becomes  insolvent or stops or suspends making
       payments  (whether of principal  or interest)  with respect to all or any
       class of its debts or announces an intention to do so; or

10.1.8 Reduction  or loss of capital:  a meeting is convened by the Borrower for
       the purpose of passing any  resolution to purchase,  reduce or redeem any
       of its share capital (save and to the extent that such purchase reduction
       or redemption of share capital is permitted by clause 8.3.3); or

10.1.9 Winding up: any petition is presented by the Borrower,  the  shareholders
       of the Borrower or its  directors or other step is taken by the Borrower,
       the  shareholders  of the  Borrower or its  directors  for the purpose of
       winding up the Borrower or an order is made or resolution  passed for the
       winding up of the Borrower or a notice is issued  convening a meeting for
       the purpose of passing any such resolution; or

10.1.10 Administration:  any petition is presented or other step is taken by the
       Borrower  or its  directors  for the  purpose  of the  appointment  of an
       administrator  of the  Borrower  or an  administration  order  is made in
       relation to the Borrower; or

10.1.11 Appointment  of receivers  and  managers:  any  administrative  or other
       receiver is appointed of the Borrower or all or any  substantial  part of
       its assets and/or undertaking or any other steps are taken to enforce any
       Encumbrance  over  all or any  substantial  part  of  the  assets  of the
       Borrower; or

10.1.12 Compositions:   the  Borrower  enters  into  any  kind  of  composition,
       compromise or arrangement  with its creditors  generally (or any class of
       them); or

10.1.13 Analogous proceedings: there occurs, in relation to the Borrower, in any
       Relevant  Jurisdiction or to the jurisdiction of whose courts any part of
       their assets is subject,  any event which,  in the reasonable  opinion of
       the Facility  Agent,  appears in that country or territory to  correspond
       with, or have an effect  equivalent or similar to, any of those mentioned
       in  clauses  10.1.7 to  10.1.12  (inclusive)  or the  Borrower  otherwise
       becomes  subject,  in any such country or territory,  to the operation of
       any law relating to insolvency, bankruptcy or liquidation; or

10.1.14 Cessation of business:  the Borrower  suspends or ceases to carry on its
       business; or

10.1.15 Seizure:  all or a material part of the undertaking,  assets,  rights or
       revenues of, or shares or other ownership  interests in, the Borrower are
       seized,  nationalised,  expropriated or compulsorily acquired by or under
       the authority of any government  other than where such seizure results in
       a Total Loss; or

10.1.16 Other parties:  any of the events or circumstances  described in clauses
       10.1.6 to 10.1.15  (inclusive)  arises or occurs  (mutatis  mutandis)  in
       relation to any other Security Party; or

10.1.17 Invalidity:  any of the Security Documents shall at any time and for any
       reason become invalid or  unenforceable  or otherwise  cease to remain in
       full force and effect in any respect which the Majority Banks consider to
       be material or if the validity or  enforceability  of any of the Security
       Documents  shall at any  time  and for any  reason  be  contested  by any
       Security  Party which is a party  thereto,  or if any such Security Party
       shall deny that it has any, or any further, liability thereunder; or

10.1.18 Unlawfulness:  it becomes  impossible  or  unlawful  at any time for any
       Security Party, to fulfil any of the covenants and obligations  expressed
       to be assumed by it in any of the Security  Documents or for the Security
       Agent to  exercise  the rights or any of them  vested in it or them under
       any of the Security Documents or otherwise; or

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

10.1.20 Encumbrances  enforced:  any Encumbrance (other than Permitted Liens) in
       respect of any of the property (or part thereof)  which is the subject of
       any of the Security Documents is enforced; or

10.1.21 Material  adverse change:  there occurs a material adverse change in the
       financial  condition of the Borrower or any member of the Golar LNG Group
       or of the Golar LNG Group taken as a whole the effect of which is, in the
       opinion of the Facility  Agent,  materially to imperil,  delay or prevent
       the due fulfilment by such person of any of their respective  obligations
       contained in the Security Documents; or

10.1.22 Arrest: any Ship is arrested,  confiscated,  seized, taken in execution,
       impounded,  forfeited,  detained in exercise or purported exercise of any
       possessory  lien or other  claim and the  Borrower  and/or  the  relevant
       Bareboat  Charterer shall fail to procure the release of such Ship within
       a period of ten (10) Banking Days  thereafter  (or such longer  period as
       the Facility Agent may agree in writing); or

10.1.23 Registration:  the  registration  of any Ship under the laws and flag of
       the relevant Flag State is cancelled or terminated or, where  applicable,
       not renewed without the prior written consent of the Facility Agent; or

10.1.24 Unrest: the Flag State of any Ship or any Relevant  Jurisdiction becomes
       involved  in  hostilities  or civil war or there is a seizure of power in
       the Flag State or any Relevant Jurisdiction by unconstitutional means if,
       in any such case,  such event could in the opinion of the Facility  Agent
       may be expected to have a material adverse effect on the security created
       by any of the Security Documents and, within fourteen (14) days of notice
       from the  Facility  Agent to do so,  the  Borrower  and/or  the  relevant
       Bareboat  Charterer  has not taken all such action as the Facility  Agent
       may  require  to  ensure  that such  circumstances  will not have such an
       effect; or

10.1.25 Environment:  the  Borrower  or any other  member of the Golar LNG Group
       fails or has failed to comply with any  applicable  Environmental  Law or
       any applicable  Environmental Approval or any Ship or any other vessel is
       or has been involved in any incident  which gives rise, has given rise or
       may give rise, to an Environmental  Claim against any member of the Golar
       LNG Group or any vessel owned by, or bareboat chartered to, any member of
       the Golar LNG Group if, in any such case, such non-compliance or incident
       or the  consequences  thereof could, in the opinion of the Facility Agent
       and  having  regard  to  any  insurance   cover  available  to  meet  any
       liabilities arising in relation to such incident, have a material adverse
       effect on (i) the  business,  assets,  operations,  property or financial
       condition  of the  Borrower or any  Bareboat  Charterer  or the Golar LNG
       Group as a whole  or (ii) the  security  created  by any of the  Security
       Documents  or (iii) the  ability of the  Security  Agent to  enforce  the
       Security Documents in accordance with their terms; or

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

10.1.27 Termination  of  Approved  Charter or  Bareboat  Charter:  any  Approved
       Charter of any Ship is cancelled or terminated for any reason  whatsoever
       without the prior  written  consent of the Facility  Agent (acting on the
       instructions of the Majority Banks); or

10.1.28 Termination of Approved Management  Agreements:  any Approved Management
       Agreement is cancelled or rescinded or otherwise  terminated  in relation
       to a Ship for any reason whatsoever  without the prior written consent of
       the Facility Agent (acting on the instructions of the Majority Banks); or

10.1.29  Change of control:

       save with the prior  written  consent of the Banks (which the Banks shall
       have full liberty to withhold):

       (a)    the Borrower is not, or ceases to be, a wholly owned Subsidiary of
              the Parent; or

       (b)    the  Bareboat  Charterers  are not, or cease to be,  wholly  owned
              Subsidiaries of the Manager; or

10.1.30 Stock  exchange  listing  of  Parent:  save  with the prior  consent  of
       Majority Banks, the issued ordinary share capital of the Parent ceases to
       be listed on the Oslo Stock Exchange or NASDAQ; or

10.1.31 Ownership  interest in Parent:  except with the prior written consent of
       all of the Banks,  any directly or indirectly  wholly owned Subsidiary of
       Greenwich  or  Greenwich  itself  ceases to be the  legal and  beneficial
       owner, directly or indirectly, of at least twenty five per cent. (25%) of
       the  ordinary  share  capital of the Parent  unless  such  percentage  is
       reduced as a result of dilution by the introduction of new equity; or

10.1.32 Termination  Notice:  a Lessor (or any  person on behalf of the  Lessor)
       serves  a  Termination  Notice  (as such  term is  defined  in any  Lease
       Agreement)  on the  Borrower  (in its  capacity as lessee under the Lease
       Agreements).

10.2   Acceleration

       The Facility Agent, if so requested by the Majority Banks,  shall without
       prejudice  to any  other  rights  of the  Banks,  at any time  after  the
       happening of an Event of Default  which is then  continuing  by notice to
       the Borrower declare that:

10.2.1 the  obligation of each Bank to make its  Commitment  available  shall be
       terminated,  whereupon  the Total  Commitments  shall be  reduced to zero
       forthwith; and/or

10.2.2 the Loan and all interest and commitment commission accrued and all other
       sums payable  under the Security  Documents  have become due and payable,
       whereupon the same shall,  immediately or in accordance with the terms of
       such notice, become due and payable.

10.3   Demand basis

       If,  pursuant to clause 10.2.2 the Facility Agent declares the Loan to be
       due and payable on demand,  the Facility Agent may (and, if so instructed
       by the Majority Banks,  shall) by written notice to the Borrower (a) call
       for repayment of the Loan on such date as may be specified  whereupon the
       Loan shall become due and payable on the date so specified  together with
       all interest  and any  commitment  commission  accrued and all other sums
       payable under this Agreement or (b) withdraw such declaration with effect
       from the date specified in such notice.

11     Indemnities

11.1   Miscellaneous indemnities

       The Borrower shall on demand indemnify each Creditor,  without  prejudice
       to any of their other rights under any of the Security Documents, against
       any loss or expense  which such  Creditor  shall  certify as sustained or
       incurred by it as a consequence of:

11.1.1 any  default  in  payment  by the  Borrower  of any sum  under any of the
       Security Documents when due;

11.1.2 the occurrence of any Event of Default;

11.1.3 receiving or recovering all or any part of a sum unpaid otherwise than on
       the due date for the payment of interest in respect thereof;

11.1.4 any  prepayment of the Loan or part thereof being made under clauses 4.2,
       4.3, 4.4.1, 4.7 or 12.1, or any other repayment or prepayment of the Loan
       or part thereof being made otherwise than on a Rollover Date being repair
       or prepaid; or

11.1.5 the Loan or any part thereof not being made for any reason (excluding any
       default by the relevant  Creditor) on the date  specified in the Drawdown
       Notice once given

       including,  in any such  case,  but not  limited  to, any loss or expense
       sustained  or incurred  by any  Creditor  in  maintaining  or funding its
       Contribution  or any  part  thereof  or in  liquidating  or  re-employing
       deposits from third parties acquired or contracted for to fund, effect or
       maintain its  Contribution  or any part thereof  (collectively  "Breakage
       Costs").

11.2   Currency indemnity

       If any sum due from the Borrower  under any of the Security  Documents or
       any  order  or  judgment  given  or made in  relation  thereto  has to be
       converted  from the currency (the "first  currency") in which the same is
       payable  under the  relevant  Security  Document  or under  such order or
       judgment into another currency (the "second currency") for the purpose of
       (a) making or filing a claim or proof against the Borrower, (b) obtaining
       an order or judgment in any court or other  tribunal or (c) enforcing any
       order  or  judgment  given  or made in  relation  to any of the  Security
       Documents,  the Borrower shall  indemnify and hold harmless each Creditor
       from and against any loss suffered as a result of any difference  between
       (i) the rate of  exchange  used for such  purpose to  convert  the sum in
       question from the first  currency  into the second  currency and (ii) the
       rate or rates of  exchange  at which  the  relevant  Creditor  may in the
       ordinary  course of business  purchase the first currency with the second
       currency upon receipt of a sum paid to it in satisfaction, in whole or in
       part, of any such order,  judgment,  claim or proof.  Any amount due from
       the Borrower  under this clause 11.2 shall be due as a separate  debt and
       shall not be affected by judgment  being  obtained for any other sums due
       under or in respect of any of the Security  Documents  and the term "rate
       of  exchange"  includes  any  premium  and costs of  exchange  payable in
       connection  with the  purchase  of the  first  currency  with the  second
       currency.

11.3   Environmental indemnity

       The  Borrower  shall  indemnify  each  Creditor  on demand  and hold each
       Creditor  harmless  from  and  against  all  costs,  expenses,  payments,
       charges,  losses,  demands,  liabilities,  actions,  proceedings (whether
       civil  or  criminal),  penalties,  fines,  damages,  judgements,  orders,
       sanctions or other outgoings of whatever nature  ("Losses")  which may be
       suffered,  incurred or paid by, or made or asserted  against the relevant
       Creditor at any time,  whether  before or after the  repayment in full of
       principal  and  interest  under this  Agreement,  relating to, or arising
       directly  or  indirectly  in  any  manner  or for  any  cause  or  reason
       whatsoever  out of an  Environmental  Claim made or asserted  against the
       such  Creditor if such  Environmental  Claim would not have been, or been
       capable of being,  made or asserted  against the relevant  Creditor if it
       had not entered into any of the Security  Documents  and/or exercised any
       of its rights,  powers and discretions thereby conferred and/or performed
       any of its  obligations  thereunder  and/or  been  involved in any of the
       transactions contemplated by the Security Documents.

12     Unlawfulness and increased costs

12.1   Unlawfulness

       If it is or becomes  contrary  to any law or  regulation  for any Bank to
       maintain its Commitment or to fund its  Contribution or contribute to the
       Loan, such Bank shall promptly inform the Facility Agent and the Facility
       Agent shall notify the Borrower whereupon:

12.1.1 such Bank's Commitment shall be reduced to zero;

12.1.2 the undrawn portion of the Total Commitments shall be reduced by the same
       proportion  which  (immediately  prior  to its  reduction  to  zero)  the
       Commitments  of the  relevant  Bank  bore to the  aggregate  of the Total
       Commitments (including such Bank's Commitment); and

12.1.3 the Borrower  shall be obliged to prepay the  Contributions  of such Bank
       either (i) forthwith or (ii) on a future specified date not being earlier
       than the latest date permitted by the relevant law or regulation.

       Any  prepayment  pursuant to this clause 12.1 shall be made together with
       all amounts referred to in clause 4.5.

12.2   Increased costs

       If the result of any change in, or in the  interpretation  or application
       of,  or the  introduction  of,  any  law or any  regulation,  request  or
       requirement  (whether or not having the force of law,  but, if not having
       the force of law, with which any Bank or, as the case may be, its holding
       company  habitually  complies),   including  (without  limitation)  those
       relating to Taxation, capital adequacy,  liquidity,  reserve assets, cash
       ratio deposits and special deposits, is to:

12.2.1 subject  any Bank to Taxes or change  the basis of  Taxation  of any Bank
       with respect to any payment  under any of the Security  Documents  (other
       than Taxes or Taxation  on the  overall  net income,  profits or gains of
       such Bank imposed in the  jurisdiction  in which its principal or lending
       office under this Agreement is located); and/or

12.2.2 increase  the cost to, or impose an  additional  cost on, any Bank or its
       holding company in making or keeping its Commitment  available or funding
       its  Contribution or otherwise in maintaining its obligations  under this
       Agreement; and/or

12.2.3 reduce the amount  payable or the effective  return to any Bank under any
       of the Security Documents; and/or

12.2.4 reduce any Bank's or its holding  company's rate of return on its overall
       capital  by reason of a change in the manner in which it is  required  to
       allocate capital  resources to its obligations  under any of the Security
       Documents; and/or

12.2.5 require  any Bank or its  holding  company  to make a payment  or forgo a
       return on or calculated by reference to any amount received or receivable
       by it under any of the Security Documents; and/or

12.2.6 require  any Bank or its  holding  company  to incur  or  sustain  a loss
       (including a loss of future potential profits) by reason of being obliged
       to deduct all or part of the Bank's  Commitment or Contribution  from its
       capital for regulatory purposes,

       then and in each  such case  (subject  to clause  12.3)  such Bank  shall
       notify the Borrower in writing of such event  promptly  upon its becoming
       aware of the same;  and the  Borrower  shall on demand,  made at any time
       whether or not the relevant Bank's  Contribution has been repaid,  pay to
       the  Facility  Agent for the  account of such Bank the amount  which such
       Bank  specifies  (in  a  certificate  setting  forth  the  basis  of  the
       computation  of such amount but not including any matters which such Bank
       or its holding company regards as confidential) is required to compensate
       such  Bank  and/or  (as the case  may be) its  holding  company  for such
       liability to Taxes, cost, reduction, payment, forgone return or loss.

       For the purposes of this clause 12.2 "holding  company" means the company
       or entity  (if any)  within  the  consolidated  supervision  of which the
       relevant Bank is included.

12.3   Exception

       Nothing in clause  12.2 shall  entitle any Bank to  compensation  for any
       such  increased  costs,  reduction,  payment or  foregoing  return to the
       extent that the same is the subject of an additional payment under clause
       6.7 or is taken into account in calculating the Additional Cost.

12.4   Mitigation

       If  circumstances  arise which would, or would upon the giving of notice,
       result in:

12.4.1 the  Borrower  being  required  to make an  increased  payment  to a Bank
       pursuant to clause 6.7

12.4.2 the reduction of the  Commitments of a Bank to zero or the Borrower being
       required to prepay any Bank's Contribution pursuant to clause 12.1; or

12.4.3 the  Borrower  being  required to make a payment to a Bank to  compensate
       such Bank or its holding  company for a liability to Taxes,  increased or
       additional cost, reduction,  payment, foregone return or loss pursuant to
       12.2.

       then, without in any way limiting,  reducing or otherwise  qualifying the
       obligations  of the Borrower under clauses 6.7 and 12, the Facility Agent
       and the  relevant  Bank shall  endeavour  to take such  reasonable  steps
       (and/or, in the case of clause 12.2 and where the increased or additional
       cost, reduction,  payment, foregone return or loss is that of its holding
       company,  endeavour  to  procure  that its  holding  company  takes  such
       reasonable  steps)  as may be open to it (or,  as the  case  may be,  its
       holding company) to mitigate or remove such  circumstances  including (in
       the case of a Bank) the transfer of its rights and obligations under this
       Agreement to another bank or financial institution) unless to do so might
       (in the opinion of the relevant Bank) be prejudicial to such Bank (or, as
       the case may be, its holding  company) or be in conflict with such Bank's
       (or, as the case may be, its holding  company's) or the Facility  Agent's
       general  banking  policies or involve  such Bank (or, as the case may be,
       its holding  company) or the  Facility  Agent in expense or an  increased
       administrative burden.

13     Set-off, pro rata payments

13.1   Set-off

       Subject to the Proceeds Deeds in the case of the Proceeds Accounts or the
       Standby  Purchaser  Proceeds  Account only, the Borrower  authorises each
       Bank (without prejudice to any of such Bank's rights at law, in equity or
       otherwise),  at any time when an Event of  Default  has  occurred  and is
       continuing and without notice to the Borrower:

13.1.1 to apply any  credit  balance  to which  the  Borrower  is then  entitled
       standing upon any account of the Borrower with any branch of such Bank in
       or towards  satisfaction  of any sum due and payable from the Borrower to
       such Bank under any of the Security Documents;

13.1.2 in the  name of the  Borrower  or such  Bank to do all  such  acts and to
       execute all such  documents  as may be  necessary  or expedient to effect
       such  application;  and 13.1.3 to combine and/or  consolidate  all or any
       accounts in the name of the Borrower with such Bank.

       For such  purposes,  each Bank is  authorised to purchase with the moneys
       standing to the credit of such  account such other  currencies  as may be
       necessary  to  effect  such  application.  No Bank  shall be  obliged  to
       exercise  any right  given to it by this  clause  13.1.  Each Bank  shall
       notify the Facility Agent and the Borrower forthwith upon the exercise or
       purported  exercise  of any  right of  set-off  giving  full  details  in
       relation thereto and the Facility Agent shall inform the other Banks.

13.2   Pro rata payments

13.2.1 If at any time any Bank (the "Recovering  Bank") receives or recovers any
       amount  owing  to it by the  Borrower  under  this  Agreement  by  direct
       payment,  set-off or in any manner  other  than by  payment  through  the
       Facility  Agent  pursuant  to  clause  6.1 or 6.10  (not  being a payment
       received  from a  Transferee  Bank or a  sub-participant  in such  Bank's
       Contribution or any other payment of an amount due to the Recovering Bank
       for its sole account  pursuant to clauses 3.1, 3.7, 4.7, 5.2, 6.7,  11.1,
       11.2, 11.3, 12.1, 12.2) the Recovering Bank shall, within two (2) Banking
       Days of such  receipt  or  recovery  (a  "Relevant  Receipt")  notify the
       Facility  Agent of the amount of the  Relevant  Receipt.  If the Relevant
       Receipt  exceeds the amount which the Recovering Bank would have received
       if the  Relevant  Receipt  had been  received by the  Facility  Agent and
       distributed pursuant to clause 6.1 or 6.10 as the case may be) then:

       (a)    within two (2) Banking Days of demand by the Facility  Agent,  the
              Recovering  Bank shall pay to the  Facility  Agent an amount equal
              (or equivalent) to the excess;

       (b)    the  Facility  Agent shall treat the excess  amount so paid by the
              Recovering  Bank as if it were a payment  made by the Borrower and
              shall  distribute the same to the Banks (other than the Recovering
              Bank) in accordance with clause 6.10; and

       (c)    as between the Borrower and the Recovering  Bank the excess amount
              so re-distributed shall be treated as not having been paid but the
              obligations  of the  Borrower  to the other  Banks  shall,  to the
              extent of the  amount so  re-distributed  to them,  be  treated as
              discharged.

13.2.2 If any part of the  Relevant  Receipt  subsequently  has to be  wholly or
       partly  refunded  by the  Recovering  Bank  (whether to a  liquidator  or
       otherwise)  each Bank to which any part of such  Relevant  Receipt was so
       re-distributed  shall on request  from the  Recovering  Bank repay to the
       Recovering  Bank such Bank's pro rata share of the amount which has to be
       refunded by the Recovering Bank.

13.2.3 Each Bank shall on request supply to the Facility Agent such  information
       as the  Facility  Agent may from time to time  request for the purpose of
       this clause 13.2

13.2.4 Notwithstanding   the  foregoing   provisions  of  this  clause  13.2  no
       Recovering  Bank shall be obliged to share any Relevant  Receipt which it
       receives or recovers pursuant to legal proceedings taken by it to recover
       any sums owing to it under this  Agreement with any other party which has
       a legal  right  to,  but does not,  either  join in such  proceedings  or
       commence and diligently pursue separate proceedings to enforce its rights
       in the same or another  court (unless the  proceedings  instituted by the
       Recovering  Bank are  instituted  by it without  prior notice having been
       given to such party through the Facility Agent).

13.3   No release

       For the  avoidance  of doubt it is hereby  declared  that  failure by any
       Recovering  Bank to comply with the  provisions  of clause 13.2 shall not
       release  any  other  Recovering  Bank  from  any  of its  obligations  or
       liabilities under clause 13.2.

13.4   No charge

       The  foregoing  provisions  of this clause 13 shall not, and shall not be
       construed so as to, constitute a charge by a Bank over all or any part of
       a sum  received or  recovered  by it in the  circumstances  mentioned  in
       clause 13.2.

14     Accounts

14.1   Undertakings concerning Earnings Accounts

       The Borrower  undertakes  with each of the Creditors that  throughout the
       Security Period it will procure that:

14.1.1 Payments to Earnings Accounts

       unless and until the Security  Agent  otherwise  directs  pursuant to the
       Three Party Deeds or any other Security  Document,  the following will be
       paid to the Earnings Accounts:

       (a)    all Earnings of the Ships;

       (b)    all payments to the Borrower and/or any of the Bareboat Charterers
              under any Eligible Swap Contracts;

       (c)    all moneys  payable  under the  Insurances  of any Ships which are
              payable to the relevant  Bareboat  Charterer or its order pursuant
              to the Proceeds  Deeds and in  accordance  with the relevant  Loss
              Payable Clauses and the Three Party Deeds;

       (d)    all surplus  proceeds of any sale or Total Loss (if any) after the
              Borrower has made any prepayment required under clause 4.4.1; and

       (e)    the amount (including  interest) of any fixed term deposit account
              or contract  referred to in clause  14.1.2(c) upon maturity of the
              relevant fixed term;

14.1.2 Withdrawals from Earnings Accounts

       withdrawals are made from any Earnings Account only for the purpose of:

       (a)    paying amounts then due under the Security  Documents  (other than
              any  prepayment of the Loan pursuant to clauses 4.4 or 4.7 of this
              Agreement  but,  for the  avoidance  of  doubt,  withdrawals  from
              Earnings  Accounts  may be  made  for  the  purpose  of  making  a
              prepayment required under clause 12.1);

       (b)    paying amounts then due in respect of Eligible Swap Liabilities or
              the Operating Costs of the Ships;

       (c)    payment of funds from one Earnings Account to another or (provided
              that the relevant  account or contract  will be subject to a valid
              Earnings  Account  security and notice of  assignment  thereof has
              been given to, and acknowledged by, the Account Bank in accordance
              with such Earnings Account  Security) their investment in a Dollar
              fixed term  deposit  account or  contract  placed or made with the
              Account  Bank on terms  that the funds so  invested  and  interest
              earned  thereon  shall be  credited  to such  Earnings  Account on
              maturity of the relevant fixed term deposit account or contract;

       (d)    payment of Equity Distributions permitted under clause 8.3.3(a);

       (e)    discharging  other  liabilities  or meeting any other  expenditure
              incurred by the Bareboat  Charterers which have been  demonstrated
              to the  satisfaction of the Facility Agent to have been reasonably
              and  properly  incurred  in the  ordinary  course of the  Bareboat
              Charterer's business of owning,  chartering and operating its Ship
              (which shall not, for the avoidance of doubt,  include any capital
              expenditure  not falling within the definition of Operating  Costs
              and shall not  include  any other  expenditure  in  respect of any
              liability arising or incurred in breach of this Agreement); or

       and that (notwithstanding the foregoing) no withdrawal whatsoever is made
       from any Earnings Account if, immediately following such withdrawal,  the
       Free  Available  Cash  would  be  less  than  fifteen   million   Dollars
       ($15,000,000);

14.1.3 Security over accounts

       if an account is to be designated as an Earnings Account for the purposes
       of the Security  Documents  there is duly delivered to the Security Agent
       at or before the time such account is so designated:

       (a)    a deed of  assignment  (an  "Account  Charge")  in respect of such
              account,  duly executed by the relevant account party in such form
              as the Security Agent may reasonably  require (which shall, so far
              as the Security  Agent  considers the  circumstances  permit),  be
              based upon the agreed form of the Earnings Accounts Security or in
              such other form as the Security Agent may  reasonably  require for
              the purpose of creating effective security over such account under
              any applicable laws;

       (b)    such notices to, and  acknowledgements  from, the relevant Account
              Bank as may be required by such Account Charge;

       (c)    in relation to the account  holder  executing  such Account Charge
              and such Account Charge itself such documents and evidence in form
              and  substance  satisfactory  to the  Security  Agent  of the kind
              referred  to in  paragraphs  (a),  (b),  (c)  and (d) of Part 1 of
              schedule 4 as the Security Agent may  reasonably  require and that
              such account has been opened; and

       (d)    such  satisfactory   legal  opinion  as  the  Security  Agent  may
              reasonably require as to the execution, validity and effectiveness
              of such Account Charge,

       provided that the Security  Agent may waive the delivery of the documents
       and  evidence  referred  to in  paragraphs  14.1.3(a)  to (d) above if it
       considers  that an existing  Account  Charge  constitutes  effective  and
       satisfactory security over such account.

14.2   L/C Deposit Surplus Account

14.2.1 Undertakings regarding L/C Deposit Account

       The Borrower acknowledges and agrees that the L/C Deposit Moneys shall be
       used for the purpose of discharging the Borrower's  obligations under the
       Lease Agreements.

14.2.2 L/C Deposit Surpluses

       The  Borrower  acknowledges  and  agrees  that if, at any  time,  any L/C
       Deposit  Moneys  result in an L/C Deposit  Surplus,  the  Borrower  shall
       ensure that such L/C Deposit Surplus is either:

       (a)    retained  in the L/C Deposit  Account and  utilised in and towards
              the obligations referred to in clause 14.2.1; or

       (b)    paid to the relevant L/C Deposit Surplus Account,

       provided  always that any L/C Deposit  Surplus  standing to the credit of
       the L/C Deposit  Account as at the date on which the last  instalment  of
       the Loan is due to be  repaid  shall  be  automatically  and  immediately
       transferred to the L/C Deposit Surplus Account  provided further that any
       such moneys are not so transferred  for any reason  whatsoever they shall
       be held on trust by the Borrower for the benefit of the Security Agent.

14.2.3 Withdrawals from the L/C Deposit Surplus Account

       (a)    Moneys  standing to the credit of any L/C Deposit  Surplus Account
              shall be subject to the security described in clause 14.1.3.

       (b)    The Borrower shall only be entitled to withdraw moneys from an L/C
              Deposit Surplus Account:

       (i)    for the  purposes of  re-crediting  the L/C Deposit  Account  (for
              which purpose the provisions of clause  8.3.3(a) shall not apply);
              or

       (ii)   for any other  purpose,  with the prior  written  approval  of all
              Banks, such approval not to be unreasonably withheld or delayed.

15     Transfer and lending office

15.1   Benefit and burden

       This Agreement  shall be binding upon, and enure for the benefit of, each
       of the Creditors and the Borrower and their respective successors.

15.2   No assignment by Borrower

       The Borrower may not assign or transfer any of its rights or  obligations
       under any of the Security Documents.

15.3   Transfers

15.3.1 Any Bank (the  "Transferor  Bank") may at any time, cause all or any part
       of its rights,  benefits and/or  obligations under this Agreement and the
       Security  Documents to be transferred to its Subsidiaries,  affiliates or
       associates or to a federal  reserve bank,  central bank or other monetary
       or regulatory  authority having  jurisdiction over such Banks without the
       consent of the Borrower or so long as no Default is then continuing, with
       the consent of the Borrower (such consent not to be unreasonably withheld
       (and  for  the  purposes  of  this  clause  15.3,   it  shall  be  deemed
       unreasonable  for the  Borrower to withhold  such  consent on the grounds
       that any  proposed  transfer  by a Bank of part of its  rights,  benefits
       and/or  obligations  would result in the number of Banks being  increased
       if,  after  such  transfer,  there  would be no more  than  fifteen  (15)
       Banks)), to any other bank or financial institution (a "Transferee Bank")
       by delivering to the Facility Agent a Transfer Certificate duly completed
       and duly executed by the Transferor Bank and the Transferee Bank.

15.3.2 Any transfer by a Bank shall be offered and effected in  compliance  with
       all applicable laws and regulations.  If the Borrower fails to respond to
       a request for such  consent  within ten (10) days of such  request  being
       made,  the Borrower  shall be deemed to have given such consent.  No such
       transfer is binding on, or effective in relation  to, the  Borrower,  the
       Facility  Agent, or the Security Agent unless it is effected or evidenced
       by a Transfer  Certificate  which  complies  with the  provisions of this
       clause  and is  signed  by or on  behalf  of  the  Transferor  Bank,  the
       Transferee  Bank  and the  Facility  Agent  (on  behalf  of  itself,  the
       Borrower,  the Security Agent and the other Banks). Upon signature of any
       such Transfer Certificate by the Facility Agent, which signature shall be
       effected as promptly as is  practicable  after such Transfer  Certificate
       has been  delivered  to the Facility  Agent,  and subject to the terms of
       such Transfer Certificate, such Transfer Certificate shall have effect as
       set out below.

15.3.3 The  following  further  provisions  shall have effect in relation to any
       Transfer Certificate:

       (a)    a Transfer  Certificate  may be in  respect of a Bank's  rights in
              respect of all or part, of its  Commitment and shall be in respect
              of the same proportion of its Contribution;

       (b)    a  Transfer  Certificate  shall  only be in  respect of rights and
              obligations of the  Transferor  Bank in its capacity as a Bank and
              shall not transfer its rights and obligations as Facility Agent or
              Security  Agent or in any other  capacity,  as the case may be and
              such  other  rights and  obligations  may only be  transferred  in
              accordance with any applicable provisions of the Agency Agreement;

       (c)    a  Transfer  Certificate  shall  take  effect in  accordance  with
              English law as follows:

              (i)    to the extent  specified in the Transfer  Certificate,  the
                     Transferor  Bank's  payment rights and all its other rights
                     (other than those referred to in paragraph (b) above) under
                     this  Agreement  are  assigned  to  the   Transferee   Bank
                     absolutely,  free of any defects in the  Transferor  Bank's
                     title and of any rights or equities  which the Borrower had
                     against the Transferor Bank;

              (ii)   the  Transferor  Bank's  Commitment  is  discharged  to the
                     extent specified in the Transfer Certificate;

              (iii)  the Transferee Bank becomes a Bank with a Contribution  and
                     an  undrawn  Commitment  of  the  amount  specified  in the
                     Transfer Certificate;

              (iv)   the Transferee  Bank becomes bound by all the provisions of
                     this  Agreement  and  the  Security   Documents  which  are
                     applicable to the Banks  generally,  including  those about
                     pro-rata sharing and the exclusion of liability on the part
                     of, and the  indemnification of, the Facility Agent and the
                     Security  Agent in  accordance  with the  provisions of the
                     Agency Agreement and to the extent that the Transferee Bank
                     becomes  bound by those  provisions,  the  Transferor  Bank
                     ceases to be bound by them;

              (v)    the Contributions which the Transferee Bank makes after the
                     Transfer  Certificate  comes into  effect  rank in point of
                     priority  and  security  in the same  way as it would  have
                     ranked had it been made by the  Transferor  Bank,  assuming
                     that any  defects in the  Transferor  Bank's  title and any
                     rights  or  equities  of any  Security  Party  against  the
                     Transferor Bank had not existed; and

              (vi)   the  Transferee  Bank  becomes  entitled  to all the rights
                     under  this  Agreement  which are  applicable  to the Banks
                     generally,  including but not limited to those  relating to
                     the Majority  Banks and those under  clauses 3.7, 5 and 12,
                     and to the extent that the Transferee Bank becomes entitled
                     to such rights,  the Transferor  Bank ceases to be entitled
                     to them;

       (d)    the rights and equities of the  Borrower or of any other  Security
              Party referred to above include, but are not limited to, any right
              of set off and any other kind of cross-claim; and

       (e)    the Borrower,  the Security Agent and the Banks hereby irrevocably
              authorise  and  instruct  the  Facility  Agent  to sign  any  such
              Transfer  Certificate  on its  behalf  (and,  in the  case  of the
              Security  Agent,  on behalf of any Security Party which has in the
              relevant Security Document given a corresponding authorisation and
              instruction to the Security  Agent) and undertake not to withdraw,
              revoke or  qualify  such  authority  or  instruction  at any time.
              Promptly  upon its  signature  of any  Transfer  Certificate,  the
              Facility  Agent shall notify the Borrower,  the Security Agent the
              Transferor Bank, the Transferee Bank and the other Banks.

15.4   Reliance on Transfer Certificate

15.4.1 The Facility Agent shall be entitled to rely on any Transfer  Certificate
       believed by it to be genuine and  correct and to have been  presented  or
       signed by the  persons  by whom it  purports  to have been  presented  or
       signed,  and shall not be liable to any of the parties to this  Agreement
       and the Security Documents for the consequences of such reliance.

15.4.2 The  Facility  Agent shall at all times during the  continuation  of this
       Agreement  maintain  a  register  in  which  it shall  record  the  name,
       Commitments,  or, as the case may be,  Contributions  and  administrative
       details  (including  the lending  office)  from time to time of each Bank
       holding Transfer Certificates and the date at which the transfer referred
       to in such Transfer Certificate held by each Bank was transferred to such
       Bank, and the Facility  Agent shall make the said register  available for
       inspection by any Bank, the Security Agent and the Borrower during normal
       banking  hours upon receipt by the  Facility  Agent of  reasonable  prior
       notice requesting the Facility Agent to do so.

15.4.3 The entries on the said register shall, in the absence of manifest error,
       be prima facie evidence in determining  the identities of the Commitments
       or, as the case may be, the Contributions  and the Transfer  Certificates
       held by the Banks  from time to time and the  principal  amounts  of such
       Transfer  Certificates  and may be relied upon by the Facility Agent, the
       Security  Agent  and the  other  Security  Parties  for all  purposes  in
       connection with this Agreement and the Security Documents.

15.5   Transfer fees and expenses

       If any  Bank  causes  the  transfer  of all or any  part  of its  rights,
       benefits and/or obligations under the Security Documents, it shall pay to
       the Facility Agent for its own account a registration fee of one thousand
       Dollars  ($1,000) for each  transfer,  and shall also pay to the Facility
       Agent on demand all out of pocket  costs,  fees and expenses  (including,
       but not limited  to,  legal fees and  expenses),  and all value added tax
       thereon,  certified by the Facility  Agent as having been  reasonably and
       properly incurred by it in connection with such transfer.

15.6   Documenting transfers

       If any Bank  transfers  all or any part of its  rights,  benefits  and/or
       obligations   as  provided  in  clause  15.3  the  Borrower   undertakes,
       immediately on being  requested to do so by the Facility Agent and at the
       cost of the  Transferor  Bank, to enter into,  and procure that the other
       Security  Parties shall enter into, such documents as may be necessary or
       desirable to transfer to the Transferee  Bank all or the relevant part of
       such  Bank's  interest  in  the  Security   Documents  and  all  relevant
       references in this  Agreement to such Bank shall  thereafter be construed
       as a reference  to the Bank and/or its  Transferee  Bank (as the case may
       be) to the extent of their respective interests.

15.7   Sub-participation

       A Bank  may  sub-participate  all  or  any  part  of  its  rights  and/or
       obligations  under the  Security  Documents  without  the  consent of, or
       notice to, the Borrower.

15.8   Lending office

       Each Bank  shall lend  through  its office at the  address  specified  in
       Schedule 1 or, as the case may be, in any relevant  Transfer  Certificate
       or through any other office of such Bank selected from time to time by it
       through  which  such  Bank  wishes  to  lend  for  the  purposes  of this
       Agreement.  If the office  through  which such Bank is lending is changed
       pursuant to this clause 15.8,  such Bank shall notify the Facility  Agent
       promptly of such change and the Facility Agent shall notify the Borrower.

15.9   Disclosure of information

       Any Bank may (with the prior written consent of the Borrower such consent
       not to be  unreasonable  withheld or delayed)  disclose to a  prospective
       assignee, substitute or transferee or to any other person who may propose
       entering into  contractual  relations  with such Bank in relation to this
       Agreement such information about the Borrower as such Bank shall consider
       appropriate.

16     Facility Agent, Security Agent and Reference Banks

16.1   Appointment of the Facility Agent and the Security Agent

       The terms and basis on which the Facility  Agent and the  Security  Agent
       have been  appointed  by the Banks as facility  agent and by the Banks as
       security  agent  and  trustee  respectively  are  set  out in the  Agency
       Agreement including, among other things, the manner in which any decision
       to exercise any right,  powers,  discretion  or authority or to carry out
       any duty are to be made  between the Banks,  the  Facility  Agent and the
       Security Agent.

16.2   Reference Banks

       If (a) the whole of the  Contributions  (if any) of any Reference Bank is
       prepaid or (b) the Commitments (if any) of any Reference Bank are reduced
       to zero in  accordance  with  clauses 4.7 or 12 or (c) a  Reference  Bank
       transfers  the whole of its  rights  and  obligations  (if any) as a Bank
       under this Agreement or (d), where applicable,  any Reference Bank ceases
       to  provide  quotations  to  the  Facility  Agent  for  the  purposes  of
       determining  LIBOR, the Facility Agent may, acting on the instructions of
       the Majority Banks,  terminate the appointment of such Reference Bank and
       appoint another Bank to replace such Reference Bank.

17     Notices and other matters

17.1   Notices

17.1.1 Every notice, request, demand or other communication under this Agreement
       or (unless  otherwise  provided  therein) under any of the other Security
       Documents shall:

       (a)    be in  writing  delivered  personally  or by  first-class  prepaid
              letter  (airmail if available) or facsimile  transmission or other
              means of telecommunication in permanent written form;

       (b)    be deemed to have been received,  subject as otherwise provided in
              the  relevant  Security  Document,  in the case of a letter,  when
              delivered personally or seven (7) days after it has been put in to
              the post and,  in the case of a  facsimile  transmission  or other
              means of  telecommunication in permanent written form, at the time
              of  despatch  (provided  that  if the  date of  despatch  is not a
              business  day in the  country of the  addressee  or if the time of
              despatch  is after the close of  business  in the  country  of the
              addressee it shall be deemed to have been  received at the opening
              of business on the next such business day); and

       (c)    be sent:

              (i)    to the Borrower at:

                       Golar Gas Holding Company, Inc.
                       c/o Golar Management (UK) Ltd.
                       30 Marsh Wall
                       London E14 9TP

                       Fax no:      (44) 207 517 8601
                       Attention:   Chief Financial Officer

              (ii)   to the Facility Agent at:

                       Nordea Bank Norge ASA
                       P.O. Box 1166, Sentrum
                       0107 Oslo
                       Norway
                       Fax no:      00 47 22 48 66 68
                       Attention:   Shipping Dept.

              (iii)  to the Security Agent at:

                       Nordea Bank Norge ASA
                       P.O. Box 1166, Sentrum
                       0107 Oslo
                       Norway
                       Fax no:      00 47 22 48 66 68
                       Attention:   Shipping Dept.

              (iv)   to each Bank at its address,  telex or fax number specified
                     in schedule 1 or in any relevant Transfer Certificate,

       or to such other  address  and/or  numbers as is notified by one party to
       the other party under this Agreement.

17.2   No implied waivers, remedies cumulative

       No failure or delay on the part of any  Creditor to  exercise  any power,
       right or remedy under any of the Security  Documents  shall  operate as a
       waiver thereof,  nor shall any single or partial exercise by any Creditor
       of any power,  right or remedy  preclude  any other or  further  exercise
       thereof or the exercise of any other power, right or remedy. The remedies
       provided in the Security  Documents are  cumulative and are not exclusive
       of any remedies provided by law.

17.3   Further assurance

       The Borrower  undertakes  that the Security  Documents  shall both at the
       date of  execution  and  delivery  thereof  and so long as any moneys are
       owing  under  any  of  the  Security  Documents,  be  valid  and  binding
       obligations  of the  respective  parties  thereto  and the  rights of the
       Creditors  thereunder  enforceable  in accordance  with their  respective
       terms and that they will, at their expense,  execute,  sign,  perfect and
       do, and will procure the execution, signing, perfecting and doing by each
       of the other Security  Parties of, any and every such further  assurance,
       document, act or thing as in the reasonable opinion of the Facility Agent
       may be necessary or desirable for perfecting the security contemplated or
       constituted by the Security Documents.

17.4   Conflicts

       In the event of any conflict  between this Agreement and any of the other
       Security Documents, the provisions of this Agreement shall prevail.

17.5   English language

       All  certificates,  instruments and other documents to be delivered under
       or supplied in connection with any of the Security  Documents shall be in
       the English  language  or shall be  accompanied  by a  certified  English
       translation upon which the Facility Agent shall be entitled to rely.

17.6   Contracts (Rights of Third Parties) Act 1999

       No term of this Agreement is enforceable  under the Contracts  (Rights of
       Third Parties) Act 1999 by a person who is not a party to this Agreement.

18     Governing law and jurisdiction

18.1   Law

       This  Agreement is governed by and shall be construed in accordance  with
       English law.

18.2   Submission to jurisdiction

       The Borrower  agrees,  for the benefit of the  Creditors,  that any legal
       action or proceedings arising out of or in connection with this Agreement
       against  the  Borrower or any of its assets may be brought in the English
       courts.  The  Borrower  irrevocably  and  unconditionally  submits to the
       jurisdiction  of such courts and  irrevocably  designates,  appoints  and
       empowers Golar  Management (UK) Ltd. at present of 30 Marsh Wall,  London
       E14 9TP to receive  for it and on its behalf,  service of process  issued
       out of the  English  courts  in such  legal  action or  proceedings.  The
       submission to such jurisdiction  shall not (and shall not be construed so
       as to) limit the right of any  Creditor to take  proceedings  against the
       Borrower in the courts of any other competent  jurisdiction nor shall the
       taking  of  proceedings  in any one or more  jurisdictions  preclude  the
       taking of proceedings in any other jurisdiction,  whether concurrently or
       not.  The parties  further  agree that only the courts of England and not
       those of any other State shall have  jurisdiction  to determine any claim
       which the Borrower  may have  against any  Creditor  arising out of or in
       connection with this Agreement.

IN WITNESS  whereof the parties to this  Agreement have caused this Agreement to
be duly executed on the date first above written.

<PAGE>

                                   Schedule 1
                         The Banks and their Commitments

Name                          Address and fax number                Commitment
                                                                        $

Nordea Bank Norge ASA         P.O. Box 1166, Sentrum                75,000,000
                              0107 Oslo
                              Norway

                              Fax: +47 22 48 42 78
                              Attention: International Loan
                              Administration

DnB NOR Bank ASA              Stranden 21                           75,000,000
                              N-0021 Oslo
                              Norway

                              Fax: (47) 22 48 28 94
                              Attention: Loan Administration
Citibank, N.A.                33 Canada Square                      75,000,000
                              Canary Wharf
                              London
                              E14 5LB

                              Fax: (44) 207 986 2762
                              Attention: Simon Booth

Fortis Bank (Nederland) N.V.  Credit Administration                 75,000,000
                              Fortis Bank (Nederland) N.V.,
                              Oslo Branch
                              Haakon VIIs gt 10, 0161 Oslo
                              Norway

                              Telephone: (47) 23 11 49 52
                              Fax:       (47) 23 11 49 40
                              Attention: Francis Birkeland

                              Loan Administration Department
                              Fortis Bank (Nederland) N.V.
                              Coolsingel 93, 3012 AE Rotterdam,
                              The Netherlands

                              Telephone: (31) 10 401 61 42/
                                                     62 54
                              Fax:       (31) 10 401 61 18
                              Attention: Frans Schreuder/Pieter
                              van Wijk/ Leo Vrijland/ Aad Blok

                              Total:                               300,000,000

<PAGE>
<TABLE>

                                   Schedule 2
                                    The Ships

                                     Part 1
                              Details of the Ships
<CAPTION>

    (a)              (b)                  (c)                (d)               (e)              (f)
   Name             Lessor             Bareboat       Official No. and   Classification   Classification
                                       Charterer      Port of Registry                        Society

<S>          <C>                   <C>                 <C>               <C>                    <C>
GOLAR        Sovereign Spirit      Golar Spirit UK         905529        +1A1 Tanker            DnV
SPIRIT       Limited               Ltd.                    London        for Liquified
                                                       or an official    Gas EO SBM
                                                       number and Port
             Registered office     Registered office   of Registry of
             PO Box HM 666         30 Marsh Wall        the Marshall
             Clarendon House       London                  Islands
             Hamilton HMCX         E14 9TP
             Bermuda

HILLI        Sovereign Hilli       Golar Hilli UK          905531        +1A1 Tanker            DnV
             Limited               Ltd.                    London        for Liquified
                                                                         Gas EO SBM
             Registered office     Registered office
             PO Box HM 666         30 Marsh Wall
             Clarendon House       London
             Hamilton HMCX         E14 9TP
             Bermuda

GIMI         Sovereign Gimi        Golar Gimi UK           905533        +1A1 Tanker            DnV
             Limited               Ltd.                    London        for Liquified
                                                                         Gas EO SBM
             Registered office     Registered office
             PO Box HM 666         30 Marsh Wall
             Clarendon House       London
             Hamilton HMCX         E14 9TP
             Bermuda

KHANNUR      Sovereign Khannur     Golar Khannur UK        905532        +1A1 Tanker            DnV
             Limited               Ltd.                    London        for Liquified
                                                                         Gas EO SBM
             Registered office     Registered office
             PO Box HM 666         30 Marsh Wall
             Clarendon House       London
             Hamilton HMCX         E14 9TP
             Bermuda

GOLAR        Sovereign Freeze      Golar Freeze UK         905530        +1A1 Tanker            DnV
FREEZE       Limited               Ltd.                    London        for Liquified
                                                                         Gas EO SBM
             Registered office     Registered office
             PO Box HM 666         30 Marsh Wall
             Clarendon House       London
             Hamilton HMCX         E14 9TP
             Bermuda
</TABLE>

In this schedule "DnV" means Det Norske Veritas.

<PAGE>

                                     Part 2
               Details of Approved Charterers, Charter Guarantees
           and Management Agreements as at the date of this Agreement

GOLAR SPIRIT

Approved Charter

Time charter dated 9 September  1983 between  Pertamina and Golar Spirit UK Ltd.
(as  amended  by  Addendum  No.  1 dated 2 July  1986,  Addendum  No. 2 dated 20
February  1990 and Addendum No. 3 dated 1 February  2003 and novated and amended
pursuant to a consent  and  novation  agreement  dated 4 April 2003 expiry on or
about 1 December 2006 subject to charterer's option to extend.

Charter Guarantee

None.

Approved Management Agreement

Management  Agreement  dated 8 April 2003 between Golar Spirit UK Ltd. and Golar
Management (UK) Limited.

HILLI

Approved Charter

Long term charter dated 25 October 2001 as amended and restated by Addendum No 1
dated 31 January 2003 and novated and amended  pursuant to a novation  agreement
dated 4 April 2003 entered into  between  Golar Hilli Inc.,  Golar Hilli UK Ltd.
and Methane  Services  Limited ("MSL") such charter to expire during  2011/2012,
subject to charterer's option to extend.

Charter Guarantee

Guarantee  dated 4 April 2003 from BG  International  Limited in favour of Golar
Hilli UK Ltd.

Approved Management Agreement

Management  Agreement  dated 8 April 2003 between  Golar Hilli UK Ltd. and Golar
Management (UK) Limited.

GIMI

Approved Charter

Long term time charter dated 25 October 2001 as amended and restated by Addendum
No. 1 dated 5 February  2003 and  amended  and  novated  pursuant  to a novation
agreement dated 4 April 2003 between Golar Gimi Inc., Golar Gimi UK Ltd. and MSL
expiring during 2010 subject to charterer's option to extend.

Charter Guarantee

Guarantee  dated 4 April 2003 from BG  International  Limited in favour of Golar
Gimi UK Ltd.

Approved Management Agreement

Management  Agreement  dated 8 April 2003  between  Golar Gimi UK Ltd. and Golar
Management (UK) Limited.

KHANNUR

Approved Charter

Long term time charter dated 25 October 2001 as amended and restated by Addendum
No. 1 dated 31 January  2003 and  amended  and  novated  pursuant  to a novation
agreement  dated 4 April 2003 between Golar Khannur Inc.,  Golar Khannur UK Ltd.
and MSL expiring during 2009 subject to charterer's option to extend.

Charter Guarantee

Guarantee  dated 4 April 2003 from BG  International  Limited in favour of Golar
Khannur UK Ltd..

Approved Management Agreement

Management  Agreement  dated 8 April 2003 between  Golar  Khannur Inc. and Golar
Management (UK) Limited.

GOLAR FREEZE

Approved Charter

Time charter dated 25 September 2002 (the "5 Year Freeze Charter") as amended by
Addendum  No. 1 dated 2 February  2003 and  novated  and  amended  pursuant to a
novation agreement dated 4 April 2003 between Golar Freeze Inc., Golar Freeze UK
Ltd. and MSL entered  into  pursuant to the Omnibus  Agreement,  such charter to
expire 5 years from the end of the Existing  Freeze Charter (unless the Existing
Freeze Charter is extended pursuant to clause 4(b)(ii) thereof until 31 December
2009 in which event the 5 Year Freeze Charter shall become null and void).

Charter Guarantee

(a)    Guarantee dated 4 April 2003 from BG International  Limited and in favour
       of Golar Freeze UK Ltd. (in respect of the Existing Freeze Charter).

(b)    Guarantee dated 4 April 2003 from BG  International  Limited in favour of
       Golar Freeze UK Ltd. (in respect of the 5 Year Freeze Charter).

Approved Management Agreement

Management  Agreement  dated 8 April 2003 between Golar Freeze UK Ltd. and Golar
Management (UK) Limited.

In this schedule:

"Omnibus  Agreement"  means the omnibus  agreement dated 25 October 2001 between
(among others) all the parties to the Master Agreement, BG International Limited
and Golar LNG Limited.

<PAGE>

                                   Schedule 3
                             Form of Drawdown Notice

To:  [Name and address of Facility Agent]
     Attention:

                                                                     [_] 2005
                                  $300,000,000
                          Loan Agreement dated [_] 2005

We refer to the above Loan  Agreement and hereby give you notice that we wish to
draw the Loan (in the amount of $300,000,000) on [_] 2005 and select an Interest
Period in respect  thereof of [_] months.  The funds should be credited to [name
and number of account] with [New York City].

We confirm that:

       (a)    no Default has occurred and is  continuing or will result from our
              borrowing the Loan;

       (b)    the  representations  and warranties  contained in clauses 7.1 and
              7.2 of the Loan  Agreement are true and correct at the date hereof
              as if made with respect to the facts and circumstances existing at
              such date; and

       (c)    the  borrowing  to be effected by the drawdown of the Loan will be
              within  our  corporate  powers,  has been  validly  authorised  by
              appropriate  corporate  action and will not cause any limit on our
              borrowings (whether imposed by statute,  regulation,  agreement or
              otherwise) to be exceeded.

Words and expressions defined in the Loan Agreement shall have the same meanings
where used herein.

                                                     For and on behalf of

                                                ................................
                                                Golar Gas Holding Company, Inc.

<PAGE>

                                   Schedule 4
     Documents and evidence required as conditions precedent (referred to in
                                    clause 9)

                                     Part 1
                                    (General)

1      Corporate authorisation

       in relation to each Security Party:

       (a)    Constitutional documents

              copies  certified by an officer of each Security Party, as a true,
              complete and up to date copies,  of all documents which contain or
              establish  or  relate  to the  constitution  of that  party  or an
              officer's  certificate  confirming that there have been no changes
              or amendments to the constitutional  documents certified copies of
              which were previously  delivered to the Facility Agent pursuant to
              the Previous Facility;

       (b)    Resolutions

              copies of  resolutions  of each of its board of directors  and (if
              relevant)  its  stockholders  approving  such  of the  Transaction
              Documents  and  Security  Documents  to  which it is or is to be a
              party  and  the  terms  and  conditions  hereof  and  thereof  and
              authorising  the signature,  delivery and performance of each such
              party's  obligations  thereunder,  certified by an officer of such
              Security Party:

              (i)    being true and correct;

              (ii)   being duly  passed at  meetings  of the  directors  of such
                     Security Party and (if  applicable) of the  stockholders of
                     such Security Party each duly convened and held;

              (iii)  not having been amended, modified or revoked; and

              (iv)   being in full force and effect

              together  with  originals  or  certified  copies of any  powers of
              attorney issued by any party pursuant to such resolutions; and

       (c)    Certificate of incumbency

              a list of directors and officers of each Security Party specifying
              the names and positions of such  persons,  certified by an officer
              of such Security Party to be true, complete and up to date;

2      Consents

       a certificate  from an officer of each Security Party confirming that all
       consents,  authorisations,  licences or approvals  that are necessary for
       such Security Party to authorise,  or are required by each Security Party
       or any other party (other than the  Creditors)  in connection  with,  the
       execution,  delivery,  and performance of the  Transaction  Documents and
       Security  Documents  to  which  they  are or will be a  party  have  been
       obtained or will be obtained  on or prior to the  Drawdown  Date for each
       Ship;

3      Process agent

       an original or certified true copy of a letter from each Security Party's
       agent for receipt of service of  proceedings  accepting  its  appointment
       under this  Agreement  and the other  Transaction  Documents and Security
       Documents as the relevant Security Party's process agent.

<PAGE>

                                     Part 2
                                 (Drawdown Date)

1      Previous Facility

       Repayment of the Previous Facility in full including any interest accrued
       up to and including the Drawdown Date.

2      Lessor and Ship conditions

       evidence in respect of each Ship that:

       (a)    Registration and encumbrances

              the Ship is registered  in the name of the relevant  Lessor in the
              Registry and that such Ship and its Earnings,  Insurances  and the
              Requisition  Compensation  are free from  Encumbrances  other than
              Permitted Encumbrances;

       (b)    Classification

              the  Ship  maintains  its  Classification   free  of  all  overdue
              requirements and recommendations of its Classification Society;

       (c)    Insurance

              the Ship is  insured  in  accordance  with the  provisions  of the
              Security  Documents and all requirements of the Security Documents
              in respect of such insurances have been complied with; and

       (d)    Approved Charters

                the Ship  remains in service  under its Approved  Charter  (such
                evidence  to be given in the form of  certified  copies  of each
                Approved Charter).

3      Security Documents

       Each of the following  documents  duly executed by the relevant  Security
       Party  together  with the  letters  of  assignment  and  acknowledgements
       thereof  and other  documents  referred to therein  duly  executed by the
       relevant Security Party:

       (a)    the Security Assignments;

       (b)    the Three Party Deeds;

       (c)    the Subsidiary Guarantees;

       (d)    the Bareboat Charterers' Guarantees;

       (e)    the Parent Guarantee;

       (f)    the Lessor Parent Support Letter;

       (g)    the Proceeds Deeds;

       (h)    the Subsidiary Pledges;

       (i)    the Earnings Account Security;

       (j)    the Standby Purchaser Share Security;

       (k)    the Notices of Assignment and related acknowledgements; and

       (l)    such other documents as the Facility Agent may reasonably require.

4      Mortgage registration

       Evidence that the Mortgage over each Ship has been registered against the
       relevant Ship through the Registry.

5      Leasing arrangements

       Evidence  satisfactory  to the  Facility  Agent that the persons who have
       executed on behalf of the  Lessors,  the Lessor  Parent and the  Proceeds
       Account Bank the Transaction Documents and/or Security Documents to which
       they are respectively a party were properly authorised to do so.

6      Legal opinions

       Such legal  opinions or  supplemental  legal  opinions in relation to the
       laws of England,  Liberia and  Bermuda (or  confirmation  that such legal
       opinions  will be issued in an agreed  form in due  course) and any other
       legal opinions as the Facility  Agent shall in its reasonable  discretion
       deem appropriate.

7      Insurance notices

       A notice of  assignment  of  insurance in respect of each Ship in six (6)
       originals  signed by each of the  Lessors,  the  Borrower,  the  Bareboat
       Charterers and the Approved Manager.

8      Other matters

       Such other  documents  or evidence as the Facility  Agent may  reasonably
       require.

<PAGE>

                                   Schedule 5
                               Repayment Schedule

No.          Repayment Date                      Installment ($)
1            14 July 2005                        10,000,000
2            14 October 2005                     10,000,000
3            16 January 2006                     10,000,000
4            18 April 2006                       10,000,000
5            14 July 2006                        10,000,000
6            16 October 2006                     10,000,000
7            15 January 2007                     10,000,000
8            16 April 2007                       10,000,000
9            16 July 2007                         9,375,000
10           15 October 2007                      9,375,000
11           14 January 2008                      9,375,000
12           14 April 2008                        9,375,000
13           14 July 2008                         9,375,000
14           14 October 2008                      9,375,000
15           14 January 2009                      9,375,000
16           14 April 2009                        9,375,000
17           14 July 2009                         9,375,000
18           14 October 2009                      9,375,000
19           14 January 2010                      9,375,000
20           14 April 2010                        9,375,000
21           14 July 2010                         9,375,000
22           14 October 2010                      9,375,000
23           14 January 2011                      9,375,000
24           14 April 2011                       79,375,000

<PAGE>

                                   Schedule 6
                          Form of Transfer Certificate

                          (referred to in clause 16.3)

                              Transfer Certificate

Banks are advised not to employ Transfer  Certificates or otherwise to assign or
transfer  interests in the Loan  Agreement  without  further  ensuring  that the
transaction  complies with all applicable  laws and  regulations,  including the
Financial Services Act 1986 and regulations made thereunder and similar statutes
which may be in force in other jurisdictions

To:    [_],  as agent on its own behalf  and for and on behalf of the  Borrower,
       the Security Agent and the Banks defined in the Loan  Agreement  referred
       to below.

                                                                     _200_
       Attention: [_]

This certificate  ("Transfer  Certificate")  relates to a Loan Agreement dated o
2005 (as amended  from time to time the "Loan  Agreement")  and made between (1)
Golar Gas Holding Company, Inc. (the "Borrower"), (2) Nordea Bank Norge ASA, DnB
NOR Bank ASA,  Citigroup  Global Market Limited and Fortis Bank (Nederland) N.V.
(3),  the  banks  and  financial  institutions  defined  therein  as banks  (the
"Banks"), (4) Nordea Bank Norge ASA as Facility Agent, (5) Nordea Bank Norge ASA
as Security  Agent for a loan  facility of up to three hundred  million  Dollars
($300,000,000).  Terms defined in the Loan  Agreement  shall,  unless  otherwise
defined herein, have the same meanings herein as therein.

In this Certificate:

the "Transferor" means [full name] of [lending office]; and

the "Transferee" means [full name] of [lending office].

1      The  Transferor  with full  title  guarantee  assigns  to the  Transferee
       absolutely all rights and interests (present, future or contingent) which
       the Transferor has as a Bank under or by virtue of the Loan Agreement and
       all the  Security  Documents  in relation to [ ] per centum ([ ]%) of the
       Contribution  of the Transferor (or its  predecessors in title) which are
       set out below:

       Date of Contribution                              Amount

       [_]                                               $ [_]

2      By  virtue  of  this  Transfer  Certificate  and  clause  15 of the  Loan
       Agreement,  the  Transferor  is  discharged  [entirely  from its  undrawn
       Commitment  which  amounts to $[_]]  [from [_] per  centum  ([_]%) of its
       undrawn Commitment, which percentage represents $[_]].]

3      The Transferee  hereby  requests the Borrower,  the Facility  Agent,  the
       Security  Agent  and the  Banks to  accept  the  executed  copies of this
       Transfer  Certificate as being delivered pursuant to and for the purposes
       of clause 15.3 of the Loan  Agreement so as to take effect in  accordance
       with the terms thereof on [date of transfer].

4      The Transferee:

       (a)    confirms that it has received a copy of the Loan Agreement and the
              Security   Documents   together  with  such  other  documents  and
              information as it has required in connection  with the transaction
              contemplated thereby;

       (b)    confirms that it has not relied and will not hereafter rely on the
              Transferor,  the Facility  Agent or the Security Agent to check or
              enquire on its behalf into the legality, validity,  effectiveness,
              adequacy,  accuracy or completeness of the Loan Agreement,  any of
              the Security Documents or any such documents or information;

       (c)    agrees that it has not relied and will not rely on the Transferor,
              the Facility  Agent,  the Security Agent or the Banks to assess or
              keep  under  review  on  its  behalf  the   financial   condition,
              creditworthiness,  condition,  affairs,  status  or  nature of the
              Borrower or any other Security Party (save as otherwise  expressly
              provided therein);

       (d)    warrants  that it has power and authority to become a party to the
              Loan  Agreement  and has taken all  necessary  action to authorise
              execution of this Transfer Certificate and to obtain all necessary
              approvals and consents to the assumption of its obligations  under
              the Loan Agreement and the Security Documents;

       (e)    acknowledges and accepts the provisions of paragraph 4(iii) above;
              and

       (f)    if not already a Bank,  appoints the Facility  Agent to act as its
              agent and the Security  Agent to act as its trustee as provided in
              the Agreement and the Security Documents and agrees to be bound by
              the terms of the Agency Agreement.

5      The Transferor:

       (a)    warrants  to the  Transferee  that it has full power to enter into
              this  Transfer  Certificate  and has  taken all  corporate  action
              necessary to authorise it to do so;

       (b)    warrants  to the  Transferee  that this  Transfer  Certificate  is
              binding on the Transferor under the laws of England,  [the country
              in which the Transferor is  incorporated  and the country in which
              its lending office is located]; and

       (c)    agrees that it will,  at its own  expense,  execute any  documents
              which the  Transferee  reasonably  requests for  perfecting in any
              relevant  jurisdiction the Transferee's  title under this Transfer
              Certificate or for a similar purpose.

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

7      By execution of this Transfer Certificate on their behalf by the Facility
       Agent and in reliance  upon the  representations  and  warranties  of the
       Transferee,  the Borrower,  the Facility Agent,  the Security Agent,  the
       Book Runner and the Banks  accept the  Transferee  as a party to the Loan
       Agreement  and the  Security  Documents  with respect to all those rights
       and/or  obligations  which by the  terms of the  Loan  Agreement  and the
       Security  Documents  will be assumed by the Transferee  (including  those
       about pro-rata sharing and the exclusion of liability on the part of, and
       the  indemnification  of, the Facility  Agent and the  Security  Agent as
       provided by the Agency  Agreement and the Loan Agreement)  after delivery
       of the executed copies of this Transfer Certificate to the Facility Agent
       and  satisfaction  of the  conditions  (if any)  subject  to  which  this
       Transfer Certificate is expressed to take effect.

8      None of the Transferor,  the Facility Agent, the Security Agent, the Book
       Runner or the Banks:

       (a)    makes   any   representation   or   warranty   nor   assumes   any
              responsibility   with   respect   to   the   legality,   validity,
              effectiveness,  adequacy or enforceability of the Agreement or any
              of the Security Documents or any document relating thereto;

       (b)    assumes any  responsibility  for the  financial  condition  of the
              Borrower  or any  other  Security  Party or any  party to any such
              other  document  or for  the  performance  and  observance  by the
              Borrower  or any  other  Security  Party or any  party to any such
              other document (save as otherwise  expressly provided therein) and
              any and all such  conditions and  warranties,  whether  express or
              implied  by law or  otherwise,  are  hereby  excluded  (except  as
              aforesaid).

9      The Transferor and the Transferee each undertake that they will on demand
       fully  indemnify the Facility  Agent and the Security Agent in respect of
       any claim,  proceeding,  liability or expense which relates to or results
       from this Transfer  Certificate  or any matter  concerned with or arising
       out of it unless caused by the Facility Agent's or Security Agent's gross
       negligence or wilful misconduct, as the case may be.

10     The  agreements  and  undertakings  of the  Transferee  in this  Transfer
       Certificate are given to and for the benefit of and made with each of the
       other parties to the Agreement and the Security Documents.

11     This  Transfer  Certificate  shall  be  governed  by,  and  construed  in
       accordance with, English law.

       Transferor                        Transferee

       By:                               By:

       Dated:                            Dated:

       Agent

       Agreed for and on behalf of itself as Facility Agent,
       the Borrower, the Security Agent,
       the Banks and all other parties to the Agency Agreement

       NORDEA BANK NORGE ASA

       By:

       Dated:

       Note:  The execution of this Transfer  Certificate alone may not transfer
              a proportionate share of the Transferor's interest in the security
              constituted  by the  Security  Documents  in the  Transferor's  or
              Transferee's  jurisdiction.  It  is  the  responsibility  of  each
              individual  Bank to  ascertain  whether  any other  documents  are
              required to perfect a transfer of such a share in the Transferor's
              interest in such security in any such  jurisdiction and, if so, to
              seek appropriate advice and arrange for execution of the same.

<PAGE>

                                  The Schedule

Outstanding Contribution                            $ [_]
Undrawn Commitment ($)                              $ [_]
Portion Transferred                                 [_]%

                      Administrative Details of Transferee

Name of Transferee:

Lending Office:

Contact Person
(Loan Administration Department):

Telephone:
Fax:

Contact Person
(Credit Administration Department):

Telephone:
Fax:

Account for payments:

<PAGE>

                                   Schedule 7
                         Calculation of Additional Cost

1      The Additional 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 Facility 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 Additional  Cost will be calculated by the
       Facility Agent as a weighted average of the Banks'  Additional Cost Rates
       (weighted in proportion to the  Commitments 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 an  office  in a
       Participating  Member State will be the percentage  notified by that Bank
       to the Facility Agent as the cost of complying  with the minimum  reserve
       requirements of the European Central Bank.

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

       (a)    in relation to an amount in Sterling:

              AB + C(B-D) + E x 0.01
              ---------------------- per cent.  per annum.
                    100 - (A + C)

       (b)    in relation to an amount in any currency other than Sterling:

              E x 0.01
              -------- per cent.  per annum.
                300

       Where:

       A      is the percentage of Eligible Liabilities (assuming these to be in
              excess of any stated minimum) which that Bank is from time to time
              required to maintain as an interest  free cash ratio  deposit with
              the Bank of England to comply with cash ratio requirements.

       B      is the percentage  rate of interest  (excluding the Margin and the
              Additional  Cost) payable for the relevant  Interest Period on the
              Loan.

       C      is the percentage (if any) of Eligible Liabilities which that Bank
              is required  from time to time to  maintain  as  interest  bearing
              Special Deposits with the Bank of England.

       D      is the percentage rate per annum payable by the Bank of England to
              the Facility Agent on interest bearing Special Deposits.

       E      is the  rate  of  charge  payable  by that  Bank to the  Financial
              Services Authority pursuant to the Fees Regulations (but, for this
              purpose,  ignoring any minimum fee  required  pursuant to the Fees
              Regulations) and expressed in pounds per  (pound)1,000,000  of the
              Fee Base of that Bank.

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;

       (b)    "Fees   Regulations"   means  the   Banking   Supervision   (Fees)
              Regulations  2001 or such  other  law or  regulation  as may be in
              force  from time to time in  respect  of the  payment  of fees for
              banking supervision;

       (c)    "Fee Base" has the meaning  given to it, and will be calculated in
              accordance with, the Fees Regulations; and

       (d)    "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.

6      In application of the above  formulae,  A, B, C and D will be included in
       the formulae as  percentages  (i.e.  5 per cent.  will be included in the
       formula as 5 and not as 0.05). A negative  result obtained by subtracting
       D from B shall be taken as zero.  The resulting  figures shall be rounded
       to four decimal places.

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

       (a)    its  jurisdiction  of  incorporation  and the  jurisdiction of the
              office  through which it will perform its  obligations  under this
              Agreement; and

       (b)    any other  information  that the  Facility  Agent  may  reasonably
              require for such purpose.

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

8      The  percentages  or rates of charge of each Bank for the purpose of A, C
       and E above  shall be  determined  by the  Facility  Agent based upon the
       information  supplied  to it  pursuant  to  paragraph  7 above and on the
       assumption  that,  unless  a Bank  notifies  the  Facility  Agent  to the
       contrary,  each Bank's  obligations  in relation to cash ratio  deposits,
       Special  Deposits  and the  Fees  Regulations  are the same as those of a
       typical bank from its jurisdiction of incorporation with an office in the
       same  jurisdiction  as the  office  through  which it is  performing  its
       obligations under this Agreement.

9      The  Facility  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 and 7 above is true and
       correct in all respects.

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

11     Any  determination  by the Facility  Agent  pursuant to this  schedule in
       relation to a formula,  the Additional  Cost, an Additional  Cost Rate or
       any amount payable to a Bank shall,  in the absence of manifest error, be
       prima facie evidence.

12     The Facility  Agent may from time to time,  after  consultation  with the
       Borrower and the Banks,  determine  and notify to all the parties to this
       Agreement 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 prima facie
       evidence.

<PAGE>
                                   Schedule 8
       Form of officer's certificate (referred to in clause 8.1.5(b)(iv))

                   Officer's Certificate issued pursuant to a
      $300,000,000 Term Loan Agreement dated o 2005 (the "Loan Agreement")

I, [_], the Chief  Financial  Officer of Golar Gas Holding  Company,  Inc.  (the
"Borrower"), hereby certify that:

1      Attached  hereto are the latest [Annual  Financial  Statements][Quarterly
       Financial  Statements]  for the [o] period  ended on [o] (the  "Reference
       Date") for the Borrower.  Such  financial  statements  [were  prepared in
       accordance  with GAAP]  [were not  prepared in  accordance  with GAAP and
       attached  hereto is a statement  of the full  details of the  adjustments
       required to such statements to reflect GAAP as necessary to calculate the
       amounts referred to in paragraph 2 below].

2      Attached hereto is a statement of the respective amounts of:

       o      the Free Available Cash

       o      Current Assets and Current Liabilities

       o      Annualised EBITDA

       o      Net Debt,

       as at, and for each relevant period ended on, the Reference Date.

3      The Borrower has complied with each of the financial undertakings set out
       in  clause  8.5 of the  Loan  Agreement  and  is  not in  default  in the
       performance  or  observance  of  any  of  such  covenants   [specify  any
       exceptions].

4      As at [date] no Default  has  occurred  and is  continuing  [specify  any
       exceptions].

5      The person  executing this certificate on our behalf has full information
       concerning  our financial  affairs and has executed the same after having
       made due  investigation and enquiry as to the accuracy of the information
       herein contained.

Terms used herein and not otherwise  defined  herein shall have the meanings set
forth in the said Loan  Agreement.  This  certificate  is  rendered  pursuant to
clause 8.1.5(b)(iv) of the Loan Agreement.

IN WITNESS WHEREOF, the undersigned has set his hand this [_] day of [_] [20__].

GOLAS GAS HOLDING COMPANY, INC.

By: ........................................
         Chief Financial Officer
<PAGE>
The Borrower

SIGNED by                                        )
for and on behalf of                             )
GOLAR GAS HOLDING COMPANY, INC.                  )    ..........................
pursuant to a Power of Attorney                  )    Attorney-in-fact

Nordea Bank Norge ASA

SIGNED by                                        )
for and on behalf of                             )
NORDEA BANK NORGE ASA                            )
as the Facility Agent,                           )
a Lead Arranger, Book Runner and as a Bank       )    ..........................
pursuant to a Power of Attorney                  )    Attorney-in-fact

DnB NOR Bank ASA

SIGNED by                                        )
for and on behalf of                             )
NORDEA BANK NORGE ASA                            )
as a Lead Arranger, Book Runner and as a Bank    )    ..........................
pursuant to a Power of Attorney                  )    Attorney-in-fact

Citigroup Global Market Limited

SIGNED by                                        )
for and on behalf of                             )
CITIGROUP GLOBAL MARKET LIMITED                  )
as a Lead Arranger and Book Runner               )    ..........................
by its authorised signatory                      )    Authorised signatory

Fortis Bank (Nederland) N.V.

SIGNED by                                        )
for and on behalf of                             )
FORTIS BANK (NEDERLAND) N.V.                     )
as a Lead Arranger and as a Bank                 )    ..........................
pursuant to a Power of Attorney                  )    Attorney-in-fact

Nordea Bank Finland Plc

SIGNED by                                        )
for and on behalf of                             )
NORDEA BANK FINLAND PLC                          )
as the Documentation Agent,                      )    ..........................
pursuant to a Power of Attorney                  )    Attorney-in-fact

Citibank, N.A.

SIGNED by                                        )
for and on behalf of                             )
CITIBANK, N.A.                                   )
as a Bank                                        )    ..........................
by its authorised signatory                      )    Authorised signatory

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]