Document:

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                                                                     EXHIBIT 4.4

                              REMARKETING AGREEMENT

                                February __, 2003

Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

The Bank of New York
101 Barclay Street
New York, New York 10286
Attention:  Corporate Trust Division

Ladies and Gentlemen:

         This Agreement is dated as of February __, 2003 (the "Agreement") by
and among Teekay Shipping Corporation, a corporation duly incorporated and
existing under the laws of the Republic of The Marshall Islands (the "Company"),
Morgan Stanley & Co. Incorporated, as the remarketing agent (the "Remarketing
Agent"), and The Bank of New York, a New York banking corporation, not
individually but solely as Purchase Contract Agent (the "Purchase Contract
Agent") and as attorney-in-fact of the holders of Purchase Contracts (as defined
in the Purchase Contract Agreement referred to below).

Section 1. Definitions.

     (a) Capitalized terms used and not defined in this Agreement shall have the
meanings set forth in the Purchase Contract Agreement, dated as of February __,
2003, between the Company and The Bank of New York, as Purchase Contract Agent,
as amended from time to time (the "Purchase Contract Agreement").

     (b) As used in this Agreement, the following terms have the following
meanings:

     "Commission" means the United States Securities and Exchange Commission.

     "Coupon Rate" has the meaning set forth in Section 205(a) of the
Supplemental Indenture No. 1.

     "Notes" means the [____]% Notes due May 18, 2006 of the Company.

     "Preliminary Prospectus" means any preliminary prospectus relating to the
Remarketed Notes included in the Registration Statement, including the documents
incorporated by reference therein as of the date of such Preliminary Prospectus;
and any reference to any amendment or supplement to such Preliminary Prospectus
shall be deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus, under the Exchange Act, and incorporated by
reference in such Preliminary Prospectus.

     "Prospectus" means the prospectus relating to the Remarketed Notes, in the
form in which first filed, or transmitted for filing, with the Commission after
the effective date of the

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Registration Statement pursuant to Rule 424(b), including the documents
incorporated by reference therein as of the date of such Prospectus; and any
reference to any amendment or supplement to such Prospectus shall be deemed to
refer to and include any documents filed after the date of such Prospectus,
under the Exchange Act, and incorporated by reference in such Prospectus.

     "Registration Statement" means a registration statement under the
Securities Act prepared by the Company covering, inter alia, the Remarketing of
the Remarketed Notes pursuant to Section 5(a) hereunder, including all exhibits
thereto and the documents incorporated by reference in the prospectus contained
in such registration statement, and any post-effective amendments thereto.

     "Remarketed Notes" means the Pledged Notes and the Separate Notes, if any,
subject to Remarketing as identified to the Remarketing Agent by the Purchase
Contract Agent and the Custodial Agent, respectively, after 5:00 p.m., New York
City time, on the Business Day immediately preceding the Remarketing Date, and
shall include: (a) the Notes of the Holders of Corporate Units who have not
notified the Purchase Contract Agent prior to 5:00 p.m., New York City time, on
the fifth Business Day immediately preceding the Purchase Contract Settlement
Date of their intention to effect a Cash Settlement of the related Purchase
Contracts pursuant to the terms of the Purchase Contract Agreement or who have
so notified the Purchase Contract Agent but failed to make the required cash
payment prior to 5:00 p.m., New York City time, on the fourth Business Day
immediately preceding the Purchase Contract Settlement Date pursuant to the
terms of the Purchase Contract Agreement, and (b) the Separate Notes of the
holders of Separate Notes, if any, who have elected to have their Separate Notes
be remarketed in such Remarketing pursuant to the terms of the Purchase Contract
Agreement.

     "Remarketing" means the remarketing of the Remarketed Notes pursuant to
this Remarketing Agreement.

     "Remarketing Date" has the meaning set forth in Section 2.

     "Remarketing Fee" has the meaning set forth in Section 4.

     "Remarketing Materials" means the Preliminary Prospectus, the Prospectus or
any other information furnished by the Company to the Remarketing Agent
expressly for distribution to investors in connection with the Remarketing.

     "Remarketing Price" has the meaning set forth in Section 2.

     "Transaction Documents" means this Agreement, the Purchase Contract
Agreement, the Pledge Agreement and the Indenture, in each case as amended or
supplemented from time to time.

Section 2. Appointment and Obligations of the Remarketing Agent.

     (a) The Company hereby appoints Morgan Stanley & Co. Incorporated as the
exclusive Remarketing Agent, and, subject to the terms and conditions set forth
herein, Morgan Stanley & Co. Incorporated hereby accepts appointment as
Remarketing Agent, for the purpose

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of (i) remarketing the Remarketed Notes on behalf of the holders thereof, (ii)
determining, in consultation with the Company, in the manner provided for herein
and in the Purchase Contract Agreement and the Indenture, the Reset Rate for the
Notes, and (iii) performing such other duties as are assigned to the Remarketing
Agent in the Transaction Documents.

     (b) On the third Business Day immediately preceding February 16, 2006 (the
"Remarketing Date"), the Remarketing Agent shall use its reasonable efforts to
remarket (the "Remarketing") the Remarketed Notes at a price (the "Remarketing
Price"), based on the Reset Rate, equal to approximately 100.25% (or, if the
Remarketing Agent is unable to remarket the Remarketed Notes at such price, at a
price below 100.25% in the discretion of the Remarketing Agent, but in no event
less than 100%, net of any Remarketing Fee and any other fees and commissions)
of the aggregate principal amount of the Remarketed Notes being remarketed in
such Remarketing. It is understood and agreed that the Remarketing on the
Remarketing Date will be considered successful and no further attempts will be
made if the resulting proceeds are at least 100% (net of any Remarketing Fee and
any other fees and commissions) of the aggregate principal amount of the
Remarketed Notes.

     (c) In connection with the Remarketing, the Remarketing Agent shall
determine, in consultation with the Company, the rate per annum, rounded to the
nearest one-thousandth (0.001) of one percent per annum, that the Notes should
bear (the "Reset Rate") in order for the Remarketed Notes to have an aggregate
market value equal to the Remarketing Price, and that in the sole reasonable
discretion of the Remarketing Agent will enable it to remarket all of the
Remarketed Notes at the Remarketing Price in such Remarketing, provided that
such rate shall not exceed the maximum interest rate permitted by law.

     (d) In the event of a Failed Remarketing, or if no Notes are included in
Corporate Units and none of the holders of the Separate Notes elect to have
Notes remarketed in such Remarketing, the applicable interest rate on the Notes
will not be reset and will continue to be the Coupon Rate set forth in the
Indenture.

     (e) If, by 4:00 p.m., New York City time, on the Remarketing Date, the
Remarketing Agent is unable to remarket all of the Remarketed Notes at the
Remarketing Price pursuant to the terms and conditions hereof, a Failed
Remarketing shall be deemed to have occurred, and the Remarketing Agent shall
advise by telephone the Depositary, the Purchase Contract Agent and the Company.
Whether or not there has been a Failed Remarketing will be determined in the
sole reasonable discretion of the Remarketing Agent. No Remarketed Notes shall
be sold if there is a Failed Remarketing.

     (f) In the event of a Successful Remarketing, by approximately 4:30 p.m.,
New York City time, on the Remarketing Date, the Remarketing Agent shall advise,
by telephone:

         (1) the Depositary, the Purchase Contract Agent and the Company of the
     Reset Rate determined by the Remarketing Agent in the Remarketing and the
     number of Remarketed Notes sold in such Remarketing;

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         (2) each purchaser (or the Depositary Participant thereof) of
     Remarketed Notes of the Reset Rate and the number of Remarketed Notes such
     purchaser is to purchase; and

         (3) each such purchaser to give instructions to its Depositary
     Participant to pay the purchase price prior to 11:00 a.m., New York City
     time, on the third Business Day immediately following the date of the
     Successful Remarketing in same day funds against delivery of the Remarketed
     Notes purchased through the facilities of the Depositary.

     The Remarketing Agent shall also, if required by the Securities Act or the
rules and regulations promulgated thereunder, deliver to each purchaser a
Prospectus in connection with the Remarketing.

     (g) After deducting any fees specified in Section 4 below, the proceeds
from a Successful Remarketing (1) with respect to the Notes that are components
of the Corporate Units, shall be paid to the Collateral Agent in accordance with
Sections 5.07 of the Pledge Agreement and Section 5.02 of the Purchase Contract
Agreement and (2) with respect to the Separate Notes, shall be paid to the
Custodial Agent for payment to the holders of such Separate Notes in accordance
with Section 5.02 of the Purchase Contract Agreement.

     (h) The right of each holder of Separate Notes or Corporate Units to have
Remarketed Notes remarketed and sold on the Remarketing Date shall be subject to
the conditions that (1) the Remarketing Agent conducts a Remarketing pursuant to
the terms of this Agreement, (2) the Remarketing Agent is able to find a
purchaser or purchasers for Remarketed Notes at the Remarketing Price based on
the Reset Rate, and (3) such purchaser or purchasers deliver the purchase price
therefor to the Remarketing Agent as and when required.

     (i) It is understood and agreed that the Remarketing Agent shall not have
any obligation whatsoever to purchase any Remarketed Notes, whether in the
Remarketing or otherwise, and shall in no way be obligated to provide funds to
make payment upon tender of Remarketed Notes for Remarketing or to otherwise
expend or risk its own funds or incur or to be exposed to financial liability in
the performance of its duties under this Agreement, and without limitation of
the foregoing, the Remarketing Agent shall not be deemed an underwriter of the
Remarketed Notes. Neither the Company nor the Remarketing Agent shall be
obligated in any case to provide funds to make payment upon tender of the
Remarketed Notes for Remarketing.

Section 3. Representations and Warranties of the Company.

     The Company represents and warrants (1) on and as of the date any
Remarketing Materials are first distributed in connection with the Remarketing
(the "Commencement Date"), (2) on and as of the Remarketing Date and (3) on and
as of the settlement date relating to the Remarketing Date, that:

     (a) Each of the representations and warranties of the Company as set forth
in Sections 1(c) through 1(r), 1(u) through 1(mm) and Section 2(a) through 2(j)
of the Underwriting Agreement dated as of February __, 2003 (the "Underwriting
Agreement") among the Company and the Underwriters identified in Schedule II, as
adapted as necessary for any changed

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circumstances or events occurring subsequent to the date of this Agreement (such
adaptations to be reasonably acceptable to counsel to the Remarketing Agent), is
true and correct as if made on each of the dates specified above (other than any
such representations and warranties which are by their terms made as of another
date, which shall be true and correct as of such dates specified therein);
provided that for purposes of this Section 3(a), any reference in such sections
of the Underwriting Agreement to (1) the "Registration Statement", the
"Prospectus" or the "Preliminary Prospectus" shall be deemed to refer to such
terms as defined herein, (2) the "Closing Date" shall be deemed to refer to the
applicable Remarketing Date and (3) the term "Significant Navion Subsidiary" as
used in Section 2(b) of the Underwriting Agreement shall be deemed to include
any subsidiaries of Navion that are, on each of the dates specified above,
"significant subsidiaries" of Navion within the meaning of Regulation S-X.

     (b) The Registration Statement, if any, in the form heretofore delivered or
to be delivered to the Remarketing Agent, has been declared effective by the
Commission in such form; and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission.

     (c) The documents incorporated by reference in the Prospectus, when they
were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information relating to
the Remarketing Agent furnished in writing to the Company by the Remarketing
Agent or its counsel expressly for use in the Prospectus.

     (d) The Registration Statement, if any, conforms (and the Prospectus, if
any, and any further amendments or supplements to the Registration Statement or
the Prospectus, when they become effective or are filed with the Commission, as
the case may be, will conform) in all material respects to the requirements of
the Securities Act and the rules and regulations promulgated thereunder, and the
Registration Statement and the Remarketing Materials (and any amendment or
supplement thereto) as of their respective effective or filing dates and as of
the Commencement Date, the Remarketing Date and Purchase Contract Settlement
Date do not and will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided that no representation and warranty
is made as to any statement of eligibility on Form T-1 filed or incorporated by
reference as part of the Registration Statement, the Prospectus or the
Remarketing Materials, or as to information relating to the Remarketing Agent
contained in or omitted from the Registration Statement, the Prospectus or the
Remarketing Materials in reliance

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upon and in conformity with written information furnished to the Company by the
Remarketing Agent.

     (e) This Agreement has been duly authorized, executed and delivered by the
Company.

Section 4. Fees.

     (a) In the event of a Successful Remarketing, the Remarketing Agent may
retain as the remarketing fee, an amount equal to the lesser of (1) 25 basis
points (0.25%), of the principal amount of the Remarketed Notes and (2) the
amount of the proceeds of such Remarketing on the Remarketing Date in excess of
the aggregate principal amount of such Remarketed Notes (the "Remarketing Fee").

Section 5. Covenants of the Company.

     The Company covenants and agrees as follows:

     (a) If and to the extent the Remarketed Notes are required (in the
reasonable view of counsel, which need not be in the form of a written opinion,
for either the Remarketing Agent or the Company) to be registered under the
Securities Act as in effect at the time of the Remarketing,

         (1) to prepare the Registration Statement and the Prospectus, in a form
     approved by the Remarketing Agent, to file any such Prospectus pursuant to
     the Securities Act within the period required by the Securities Act and the
     rules and regulations thereunder and to use commercially reasonable efforts
     to cause the Registration Statement to be declared effective by the
     Commission prior to the second Business Day immediately preceding the
     applicable Remarketing Date;

         (2) to file promptly with the Commission any amendment to the
     Registration Statement or the Prospectus or any supplement to the
     Prospectus that may, in the reasonable judgment of the Company or the
     Remarketing Agent, be required by the Securities Act or requested by the
     Commission;

         (3) to advise the Remarketing Agent, promptly after it receives notice
     thereof, of the time when any amendment to the Registration Statement has
     been filed or becomes effective or any supplement to the Prospectus or any
     amended Prospectus has been filed and to furnish the Remarketing Agent with
     copies thereof;

         (4) to file promptly all reports and any definitive proxy or
     information statements required to be filed by the Company with the
     Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
     Act subsequent to the date of the Prospectus and for so long as the
     delivery of a Prospectus is required in connection with the offering or
     sale of the Remarketed Notes;

         (5) to advise the Remarketing Agent, promptly after it receives notice
     thereof, of the issuance by the Commission of any stop order or of any
     order preventing or

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     suspending the use of the Prospectus, of the suspension of the
     qualification of any of the Remarketed Notes for offering or sale in any
     jurisdiction, of the initiation or threatening of any proceeding for any
     such purpose, or of any request by the Commission for the amending or
     supplementing of the Registration Statement or the Prospectus or for
     additional information, and, in the event of the issuance of any stop order
     or of any order preventing or suspending the use of any Prospectus or
     suspending any such qualification, to use promptly its best efforts to
     obtain its withdrawal;

         (6) to furnish promptly to the Remarketing Agent such copies of the
     following documents as the Remarketing Agent shall reasonably request: (A)
     conformed copies of the Registration Statement as originally filed with the
     Commission and each amendment thereto (in each case excluding exhibits);
     (B) the Preliminary Prospectus and any amended or supplemented Preliminary
     Prospectus, (C) the Prospectus and any amended or supplemented Prospectus;
     and (D) any document incorporated by reference in the Prospectus (excluding
     exhibits thereto); and, if at any time when delivery of a prospectus is
     required in connection with the Remarketing, any event shall have occurred
     as a result of which the Prospectus as then amended or supplemented would
     include any untrue statement of a material fact or omit to state any
     material fact necessary in order to make the statements therein, in the
     light of the circumstances under which they were made when such Prospectus
     is delivered, not misleading, or if for any other reason it shall be
     necessary during such same period to amend or supplement the Prospectus or
     to file under the Exchange Act any document incorporated by reference in
     the Prospectus in order to comply with the Securities Act or the Exchange
     Act, to notify the Remarketing Agent and, upon its request, to file such
     document and to prepare and furnish without charge to the Remarketing Agent
     and to any dealer in securities as many copies as the Remarketing Agent may
     from time to time reasonably request of an amended or supplemented
     Prospectus that will correct such statement or omission or effect such
     compliance;

         (7) prior to filing with the Commission (A) any amendment to the
     Registration Statement or supplement to the Prospectus or (B) any
     Prospectus pursuant to Rule 424 under the Securities Act, to furnish a copy
     thereof to the Remarketing Agent and counsel to the Remarketing Agent; and
     not to file any such amendment or supplement that shall be reasonably
     disapproved by the Remarketing Agent promptly after reasonable notice;

         (8) as soon as practicable, but in any event not later than eighteen
     months, after the effective date of the Registration Statement, to make
     "generally available to its security holders" an "earnings statement" of
     the Company and its subsidiaries complying with (which need not be audited)
     Section 11(a) of the Securities Act and the rules and regulations
     thereunder (including, at the option of the Company, Rule 158). The terms
     "Generally available to its securityholders" and "Earnings Statement" shall
     have the meanings set forth in Rule 158; and

         (9) to take such action as the Remarketing Agent may reasonably request
     in order to qualify the Remarketed Notes for offer and sale under the
     securities or "blue sky" laws of such jurisdictions as the Remarketing
     Agent may reasonably request;

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     provided that in no event shall the Company be required to qualify as a
     foreign corporation or to file a general consent to service of process in
     any jurisdiction.

     (b) To pay: (1) the costs incident to the preparation and printing of the
Registration Statement, if any, any Prospectus and any other Remarketing
Materials and any amendments or supplements thereto; (2) the costs of
distributing the Registration Statement, if any, any Prospectus and any other
Remarketing Materials and any amendments or supplements thereto; (3) any fees
and expenses of qualifying the Remarketed Notes under the securities laws of the
several jurisdictions as provided in Section 5(a)(9) and of preparing, printing
and distributing a Blue Sky Memorandum, if any (including any related reasonable
fees and expenses of counsel to the Remarketing Agent); (4) all other costs and
expenses incident to the performance of the obligations of the Company
hereunder; (5) all other reasonable costs and expenses incident to the
performance of the obligations of the Remarketing Agent hereunder; and (6) the
reasonable fees and expenses of counsel to the Remarketing Agent in connection
with their duties hereunder.

     (c) To furnish the Remarketing Agent with such information and documents as
the Remarketing Agent may reasonably request in connection with the transactions
contemplated hereby, and to make reasonably available to the Remarketing Agent
and any accountant, attorney or other advisor retained by the Remarketing Agent
such information that parties would customarily require in connection with a due
diligence investigation conducted in accordance with applicable securities laws
and to cause the Company's officers, directors, employees and accountants to
participate in all such discussions and to supply all such information
reasonably requested by any such Person in connection with such investigation.

Section 6. Conditions to the Remarketing Agent's Obligations.

     The obligations of the Remarketing Agent hereunder shall be subject to the
following conditions:

     (a) The Prospectus, if any, shall have been timely filed with the
Commission; no stop order suspending the effectiveness of the Registration
Statement, if any, or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the Commission; and
any request of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been complied
with.

     (b) (1) Trading generally shall not have been suspended or materially
limited on the New York Stock Exchange, the American Stock Exchange, the Nasdaq
National Market, the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (2) trading of any securities of the
Company shall not have been suspended on any exchange or in any over-the-counter
market, (3) a material disruption in securities settlement, payment or clearance
services in the United States or Canada shall not have occurred, (4) a
moratorium on commercial banking activities shall not have been declared by
Federal, New York State or Canadian authorities, or (5) there shall not have
occurred any outbreak or escalation of hostilities or declaration of war or any
change in financial markets or any calamity or crisis, that, in the Remarketing
Agent's judgment, is material and adverse and which, singly or together with any
other such event specified in clause (5), makes it, in the Remarketing Agent's

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judgment, impracticable or inadvisable to proceed with the Remarketing or the
delivery of the Remarketed Notes on the terms and in the manner contemplated in
the Transaction Documents.

     (c) The representations and warranties of the Company contained herein
shall be true and correct in all material respects on and as of the Remarketing
Date (other than any such representations and warranties which are by their
terms made as of another date, which shall be true and correct as of such dates
specified therein), and the Company, the Purchase Contract Agent and the
Collateral Agent shall have performed in all material respects all covenants and
agreements contained herein or in the Purchase Contract Agreement or Pledge
Agreement to be performed on their part at or prior to the Remarketing Date.

     (d) The Company shall have furnished to the Remarketing Agent a
certificate, dated the Remarketing Date, of the Chief Financial Officer
satisfactory to the Remarketing Agent stating that: (1) no order suspending the
effectiveness of the Registration Statement, if any, or prohibiting the sale of
the Remarketed Notes is in effect, and no proceedings for such purpose are
pending before or, to the knowledge of such officers, threatened by the
Commission; (2) the representations and warranties of the Company in Section 3
are true and correct on and as of the Remarketing Date (other than any such
representations and warranties which are by their terms made as of another date,
which shall be true and correct as of such dates specified therein) and the
Company has performed in all material respects all covenants and agreements
contained herein to be performed on its part at or prior to the Remarketing
Date; and (3) the Registration Statement, as of its effective date, and the
Remarketing Materials, as of their respective dates, did not contain any untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and the Prospectus did not contain any untrue statement of material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading (provided, however, that such certificate may exclude
from its coverage any information relating to the Remarketing Agent contained in
the Registration Statement, the Prospectus or the Remarketing Materials in
reliance upon and in conformity with written information furnished to the
Company by the Remarketing Agent).

     (e) On the Remarketing Date, the Remarketing Agent shall have received a
letter addressed to the Remarketing Agent and dated such date, in form and
substance satisfactory to the Remarketing Agent, of the independent accountants
of the Company, containing statements and information of the type ordinarily
included in accountants' "comfort letters" with respect to certain financial
information contained in the Remarketing Materials, if any.

     (f) Each of (1) Watson, Farley & Williams, (2) Graham, Thompson & Co., (3)
Seward & Kissel LLP, (4) Thommessen Krefting Greve Lund AS Advokatfirma, (5)
Perkins Coie LLP and (6) Appleby Spurling & Kempe, shall have furnished to the
Remarketing Agent its opinion, addressed to the Remarketing Agent and dated the
Remarketing Date, in form and substance reasonably satisfactory to the
Remarketing Agent addressing such matters as are set forth in such counsel's
opinion furnished pursuant to Sections 6(d) through 6(i), respectively of the
Underwriting Agreement, adapted as necessary to relate to the securities being
remarketed hereunder and to the Remarketing Materials, if any, or to any changed
circumstances or events

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occurring subsequent to the date of this Agreement, such adaptations being
reasonably acceptable to counsel to the Remarketing Agent.

     (g) Seward & Kissel LLP, counsel for the Purchase Contract Agent, shall
have furnished to the Remarketing Agent its opinion, addressed to the
Remarketing Agent and dated the Remarketing Date, in form and substance
reasonably satisfactory to the Remarketing Agent addressing such matters as are
set forth in such counsel's opinion furnished pursuant to Section 6(k) of the
Underwriting Agreement, adapted as necessary to relate to the securities being
remarketed hereunder and to the Remarketing Materials, if any, or to any changed
circumstances or events occurring subsequent to the date of this Agreement, such
adaptations being reasonably acceptable to counsel to the Remarketing Agent.

     (h) Counsel for the Remarketing Agent, shall have furnished to the
Remarketing Agent its opinion, addressed to the Remarketing Agent and dated the
applicable Remarketing Date, in form and substance satisfactory to the
Remarketing Agent.

     (i) Subsequent to the execution and delivery of this Agreement and prior to
the applicable Remarketing Date, there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or potential downgrading or
of any review for a possible change that does not indicate an improvement, in
the rating accorded any of the Company's securities by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act.

Section 7. Indemnification.

     (a) The Company agrees to indemnify and hold harmless the Remarketing Agent
and each person, if any, who controls the Remarketing Agent within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act and each
affiliate of the Remarketing Agent within the meaning of Rule 405 under the
Securities Act from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in investigating or defending any such action or claim)
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), any
Preliminary Prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to the Remarketing Agent furnished to the Company in
writing by the Remarketing Agent expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of the Remarketing Agent from whom the
person asserting any such losses, claims, damages or liabilities purchased
Remarketed Notes, or any person controlling the Remarketing Agent, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendment or supplements thereto) was not sent or given by or on
behalf of the Remarketing Agent to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Remarketed Notes to such person, and if the Prospectus (as so amended or
supplemented) would have cured

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the defect giving rise to such losses, claims, damages or liabilities, unless
such failure is the result of noncompliance by the Company with Section 5(a)(6)
hereof.

     (b) The Remarketing Agent agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement, and
each person, if any, who controls the Company to the same extent as the
foregoing indemnity from the Company to the Remarketing Agent, but only with
reference to information relating to such Remarketing Agent furnished to the
Company by the Remarketing Agent expressly for use in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto.

     (c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 7(a) or 7(b), such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the reasonable
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them, in which case the indemnifying party shall pay
the reasonable fees and disbursements of such counsel. It is understood that the
indemnifying party shall not, in respect of the legal expenses of any
indemnified party in connection with any proceeding or related proceeding in the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm (in addition to any local counsel) for all such indemnified
parties and that all such fees and expenses shall be reimbursed as they are
incurred. Such firm shall be designated in writing by the Remarketing Agent, in
the case of parties indemnified pursuant to Section 7(a), and by the Company, in
the case of parties indemnified pursuant to Section 7(b). The indemnifying party
shall not be liable for any settlement of any proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for reasonable fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought

                                       11
<PAGE>

hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

Section 8. Contribution.

     (a) To the extent the indemnification provided for in Section 7(a) or 7(b)
hereof is unavailable to any indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Remarketing Agent on
the other hand from the offering of the Remarketed Notes or (ii) if the
allocation provided by clause (i) of this Section 8(a) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) of this Section 8(a) but also the
relative fault of the Company on the one hand and the Remarketing Agent on the
other hand in connection with the statements or omissions that resulted in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations.

     The relative benefits received by the Company on one hand and the
Remarketing Agent on the other hand in connection with the Remarketing shall be
deemed to be in the same proportions as the aggregate principal amount of the
Remarketed Notes less the fee paid to the Remarketing Agent on the one hand and
the fee paid to the Remarketing Agent on the other hand bear to the aggregate
principal amount of the Remarketed Notes.

     The relative fault of the Company on the one hand and the Remarketing Agent
on the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Remarketing Agent on the other
hand and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.

     The Company and the Remarketing Agent agree that it would not be just or
equitable if contribution pursuant to this Section 8(a) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 8(a). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to above in this Section 8(a) shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in investigating or
defending any such action or claim.

     Notwithstanding the provisions of this Section 8(a), the Remarketing Agent
shall not be required to contribute any amount in excess of the amount by which
the fees received by it under Section 4 exceeds the amount of any damages which
the Remarketing Agent has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission.

                                       12
<PAGE>

     No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 8 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to any indemnified party at law or
in equity.

     (b) The indemnity and contribution provisions contained in Section 7 and
this Section 8 and the representations, warranties and other statements of the
Company contained in this Agreement shall remain operative and in full force and
effect, regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Remarketing Agent or any person
controlling the Remarketing Agent or any affiliate of the Remarketing Agent, or
by or on behalf of the Company, its officers or director or any person
controlling the Company, and (iii) the completion of the Remarketing.

Section 9. Resignation and Removal of the Remarketing Agent.

     The Remarketing Agent may resign and be discharged from its duties and
obligations hereunder, and the Company may remove the Remarketing Agent, by
giving 30 days' prior written notice, in the case of a resignation, to the
Company and the Depositary and, in the case of a removal, to the removed
Remarketing Agent and the Depositary; provided, however, that:

     (a) the Remarketing Agent may not resign without reasonable cause; and

     (b) no such resignation nor any such removal shall become effective until
the Company shall have appointed at least one nationally recognized
broker-dealer as successor Remarketing Agent and such successor Remarketing
Agent shall have entered into a remarketing agreement with the Company, in which
it shall have agreed to conduct the Remarketing in accordance with the
Transaction Documents in all material respects.

     In any such case, the Company will use commercially reasonable efforts to
appoint a successor Remarketing Agent and enter into such a remarketing
agreement with such person as soon as reasonably practicable. The provisions of
Section 7 and Section 8 shall survive the resignation or removal of any
Remarketing Agent pursuant to this Agreement.

Section 10. Dealing in Securities.

     The Remarketing Agent, when acting as a Remarketing Agent or in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold and deal in any of the Remarketed Notes, Corporate Units, Treasury
Units or any of the securities of the Company (together, the "Securities");
provided that the Remarketing Agent agrees, on behalf of itself and its
affiliates, not to buy any Remarketed Notes in the Remarketing. The Remarketing
Agent may exercise any vote or join in any action which any beneficial owner of
such Securities may be entitled to exercise or take pursuant to the Indenture
with like effect as if it did not act in any capacity hereunder. The Remarketing
Agent, in its individual capacity, either as principal or agent, may also engage
in or have an interest in any financial or other transaction with the Company as
freely as if it did not act in any capacity hereunder.

                                       13
<PAGE>

Section 11. Remarketing Agent's Performance; Duty of Care.

     The duties and obligations of the Remarketing Agent shall be determined
solely by the express provisions of this Agreement and the Transaction
Documents. No implied covenants or obligations of or against the Remarketing
Agent shall be read into this Agreement or any of the Transaction Documents. In
the absence of bad faith on the part of the Remarketing Agent, the Remarketing
Agent may conclusively rely upon any document furnished to it, as to the truth
of the statements expressed in any of such documents. The Remarketing Agent
shall be protected in acting upon any document or communication reasonably
believed by it to have been signed, presented or made by the proper party or
parties except as otherwise set forth herein. The Remarketing Agent, acting
under this Agreement, shall incur no liability to the Company or to any holder
of Remarketed Notes in its individual capacity or as Remarketing Agent for any
action or failure to act, on its part in connection with a Remarketing or
otherwise, except if such liability is judicially determined to have resulted
from its failure to comply with the material terms of this Agreement or bad
faith, gross negligence or willful misconduct on its part. The provisions of
this Section 11 shall survive the termination of this Agreement and shall
survive the resignation or removal of any Remarketing Agent pursuant to this
Agreement.

Section 12. Termination.

     This Agreement shall automatically terminate (1) as to the Remarketing
Agent on the effective date of the resignation or removal of the Remarketing
Agent pursuant to Section 9 and (2) on the Purchase Contract Settlement Date. If
this Agreement is terminated pursuant to any of the other provisions hereof,
except as otherwise provided herein, the Company shall not be under any
liability to the Remarketing Agent and the Remarketing Agent shall not be under
any liability to the Company, except that if this Agreement is terminated by the
Remarketing Agent because of any failure or refusal on the part of the Company
to comply with the terms or to fulfill any of the conditions of this Agreement,
the Company will reimburse the Remarketing Agent for all of its out-of-pocket
expenses (including the fees and disbursements of its counsel) reasonably
incurred by it. Sections 7, 8 and 11 hereof shall survive the termination of
this Agreement or the resignation or removal of the Remarketing Agent.

Section 13. Notices.

     All statements, requests, notices and agreements hereunder shall be in
writing, and:

     (a) if to the Remarketing Agent, shall be delivered or sent by mail, telex
or facsimile transmission to Morgan Stanley & Co. Incorporated, 1585 Broadway,
New York, New York, 10036, Attention: Kevin Woodruff (Fax: (212) 761-0538);

     (b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to Teekay Shipping Corporation, 550 Burrard Street, Suite
2200, Bentall 5, Vancouver, British Columbia, V6C 2K2, Attention: General
Counsel (Fax: 604-609-6447); and

     (c) if to the Purchase Contract Agent, shall be delivered or sent by mail,
telex or facsimile transmission to The Bank of New York, 101 Barclay Street, New
York, New York 10286, Attention: Corporate Trust Division (Fax: (212)
815-5802/03).

                                       14
<PAGE>

     Any such statements, requests, notices or agreements shall take effect at
the time of receipt thereof.

Section 14. Persons Entitled to Benefit of Agreement.

     This Agreement shall inure to the benefit of and be binding upon each party
hereto and its respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(x) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
Remarketing Agent and the person or persons, if any, who control the Remarketing
Agent within the meaning of Section 15 of the Securities Act and (y) the
indemnity agreement of the Remarketing Agent contained in Section 7(b) of this
Agreement shall be deemed to be for the benefit of the Company's directors and
officers who sign the Registration Statement, if any, and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing
contained in this Agreement is intended or shall be construed to give any
person, other than the persons referred to herein, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.

Section 15. Survival.

     The respective indemnities, representations, warranties and agreements of
the Company and the Remarketing Agent contained in this Agreement or made by or
on behalf of them, respectively, pursuant to this Agreement, shall survive any
Remarketing and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.

Section 16. Governing Law.

     This Agreement shall be governed by, and construed in accordance with, the
laws of the State of New York.

Section 17. Judicial Proceedings.

     (a) Each party hereto expressly accepts and irrevocably submits to the
non-exclusive jurisdiction of the United States Federal or New York State court
sitting in the Borough of Manhattan, The City of New York, New York, over any
suit, action or proceeding arising out of or relating to this Agreement or the
Remarketed Notes. To the fullest extent it may effectively do so under
applicable law, each party hereto irrevocably waives and agrees not to assert,
by way of motion, as a defense or otherwise, any claim that it is not subject to
the jurisdiction of any such court, any objection that it may now or hereafter
have to the laying of the venue of any such suit, action or proceeding brought
in any such court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum.

     (b) Each party hereto agrees, to the fullest extent that it may effectively
do so under applicable law, that a judgment in any suit, action or proceeding of
the nature referred to in Section 17(a) brought in any such court shall be
conclusive and binding upon such party, subject to rights of appeal and may be
enforced in the courts of the United States of America or the State of

                                       15
<PAGE>

New York (or any other court the jurisdiction to which the Company is or may be
subject) by a suit upon such judgment.

Section 18. Counterparts.

     This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to
be an original but all such counterparts shall together constitute one and the
same instrument.

Section 19. Headings.

     The headings herein are inserted for convenience of reference only and are
not intended to be part of, or to affect the meaning or interpretation of, this
Agreement.

Section 20. Severability.

     If any provision of this Agreement shall be held or deemed to be or shall,
in fact, be invalid, inoperative or unenforceable as applied in any particular
case in any or all jurisdictions because it conflicts with any provisions of any
constitution, statute, rule or public policy or for any other reason, then, to
the extent permitted by law, such circumstances shall not have the effect of
rendering the provision in question invalid, inoperative or unenforceable in any
other case, circumstance or jurisdiction, or of rendering any other provision or
provisions of this Agreement invalid, inoperative or unenforceable to any extent
whatsoever.

Section 21. Amendments.

     This Agreement may be amended by an instrument in writing signed by the
parties hereto. Each of the Company and the Purchase Contract Agent agrees that
it will not enter into, cause or permit any amendment or modification of the
Transaction Documents or any other instruments or agreements relating to the
Notes or the Corporate Units that would in any way adversely affect the rights,
duties and obligations of the Remarketing Agent, without the prior written
consent of the Remarketing Agent.

Section 22. Successors and Assigns.

     The rights and obligations of the Company hereunder may not be assigned or
delegated to any other Person without the prior written consent of the
Remarketing Agent. The rights and obligations of the Remarketing Agent hereunder
may not be assigned or delegated to any other Person (other than an affiliate of
the Remarketing Agent) without the prior written consent of the Company.

     If the foregoing correctly sets forth the agreement by and between the
Company, the Remarketing Agent and the Purchase Contract Agent, please indicate
your acceptance in the space provided for that purpose below.

                       [SIGNATURES ON THE FOLLOWING PAGE]

                                       16
<PAGE>

                                        Very truly yours,

                                        TEEKAY SHIPPING CORPORATION

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

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

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

CONFIRMED AND ACCEPTED:

MORGAN STANLEY & CO. INCORPORATED,
as Remarketing Agent

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

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

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

THE BANK OF NEW YORK,

not individually, but solely as
Purchase Contract Agent and as
attorney-in-fact for the Holders
of the Purchase Contracts

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

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

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

                                       17<PAGE>
                                                                     EXHIBIT 4.5

                           Teekay Shipping Corporation

                                 5,000,000 Units

                        [ ]% Premium Equity Participating
                          Security Units - PEPSSM Units

                             Underwriting Agreement

                               February [__], 2003

Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036

Salomon Smith Barney Inc.
388 Greenwich Street
New York, New York 10013

Ladies and Gentlemen:

         Teekay Shipping Corporation, a Republic of The Marshall Islands
corporation, (the "Company"), proposes to issue and sell to the several
Underwriters listed in Schedule I hereto (the "Underwriters"), subject to the
terms and conditions stated herein, an aggregate of 5,000,000 [ ]% Premium
Equity Participating Security Units - PEPSSM Units (the "Firm Securities") of
the Company, the terms of which are set forth in Schedule II hereto. Each PEPS
Unit will consist of (a) a stock purchase contract (a "Purchase Contract") under
which the holder of the Securities (as defined below) will purchase from the
Company on February 16, 2006, for an amount in cash equal to the stated amount
per Security of $25.00 (the "Stated Amount"), a number of shares (each, a
"Common Share" and, collectively with all other Common Shares that may be issued
and sold by the Company upon settlement of the Purchase Contracts, the "Common
Shares") of the Company's common shares, par value $0.001 per share (the
"Common Stock"), as set forth in such Purchase Contract, and (b) $25.00
principal amount of the Company's [ ]% Notes due May 18, 2006 (a "Note" and
collectively with each other Note, including each Note that is part of the
Option Securities as defined below, the "Notes") with a principal amount of
$1,000. Additionally, the Company proposes to issue and sell to the several
Underwriters, for the sole purpose of covering over-allotments in connection
with the sale of the Firm Securities, at the option of the Underwriters, up to
an additional 750,000 [ ]% Premium Equity Participating Security Units - PEPSSM
Units (the "Option Securities"). The Firm Securities and any Option Securities
are herein referred to as the "Securities."

         In accordance with the terms of a Purchase Contract Agreement (the
"Purchase Contract Agreement"), to be dated as of the Closing Date (as defined
below) and entered into between the Company and The Bank of New York, as
Purchase Contract Agent (the "Purchase Contract Agent"), the holders of the
Securities will pledge the Notes to The Bank of New York, as Collateral Agent
(the "Collateral Agent"), pursuant to a Pledge Agreement (the "Pledge
Agreement") to be dated as of the Closing Date and entered into among the
Company, the

                                       1
<PAGE>

Collateral Agent, the Purchase Contract Agent and The Bank of New York, as
Securities Intermediary, to secure the holders' obligations to purchase Common
Shares under the Purchase Contracts. The Purchase Contracts, the Purchase
Contract Agreement and the Pledge Agreement are herein collectively referred to
as the "PEPS Agreements."

         The Company will also enter into a Remarketing Agreement (the
"Remarketing Agreement"), to be dated as of the Closing Date, with Morgan
Stanley & Co. Incorporated, as Remarketing Agent, which will provide for the
remarketing of the Notes prior to the Settlement Date (as defined in the
Purchase Contract).

         The Company has filed with the Securities and Exchange Commission (the
"Commission"), in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder (the
"Securities Act"), a registration statement on Form F-3 (registration no.
333-102594), including a related prospectus, relating to the registration of
certain securities of the Company, including the Premium Equity Participating
Security Units - PEPSSM Units, the Purchase Contracts, the Notes and the Common
Shares (the "Shelf Securities"), to be sold from time to time by the Company.
The registration statement, as amended at the time it became effective,
including information, if any, deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Securities Act is
hereinafter referred to as the "Registration Statement," and the prospectus
included therein relating to the Shelf Securities at the time the Registration
Statement became effective, is hereinafter referred to as the "Base Prospectus."
The Base Prospectus, as supplemented by the prospectus supplement dated February
[__], 2003 (the "Prospectus Supplement"), relating to the Securities, in the
form first used to confirm sales of the Securities is hereinafter referred to as
the "Prospectus." If the Company has filed an abbreviated registration statement
pursuant to Rule 462(b) under the Securities Act (the "Rule 462 Registration
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement. Any reference
to the term Registration Statement, the Base Prospectus, any preliminary form of
prospectus previously filed with the Commission pursuant to Rule 424 of the
Securities Act or the Prospectus shall include the documents incorporated
therein by reference. The terms "supplement" and "amendment" or "amend" as used
in this Agreement shall include all documents subsequently filed by the Company
with the Commission pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are deemed to be incorporated by reference in the
Prospectus.

1.   Representations and Warranties of the Company.  The Company represents and
warrants to and agrees with each of the Underwriters that:

     (a) The Company and the transactions contemplated by this Agreement meet
the requirements for using Form F-3 under the Securities Act. The Registration
Statement has become effective; no stop order suspending the effectiveness of
the Registration Statement is in effect, and no proceedings for such purpose are
pending before or, to the knowledge of the Company, contemplated by the
Commission.

     (b) The Registration Statement, when it became effective, did not contain
and, as amended or supplemented, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not

                                       2
<PAGE>

misleading, the Registration Statement and the Prospectus comply and, as amended
or supplemented, if applicable, will comply in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder and the Trust Indenture Act of 1939, as amended (the "Trust Indenture
Act") and the Prospectus does not, as of its date, contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information relating to
any Underwriter furnished to the Company in writing by such Underwriter through
you expressly for use therein. No order preventing or suspending the use of any
preliminary prospectus has been issued by the Commission and no proceedings for
that purpose shall have been instituted or, to the knowledge of the Company,
threatened or contemplated by the Commission.

     (c) The Company has been duly organized in the Republic of Liberia and is
validly existing as a corporation in good standing under the laws of the
Republic of The Marshall Islands, with power and authority (corporate and other)
to own its properties and to conduct its business as described in the
Registration Statement and the Prospectus and has been duly qualified to
transact business and is in good standing in each other jurisdiction in which
the conduct of its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the general
affairs, management, the current or future consolidated financial position,
business prospects, shareholders' equity or result of operations of the Company
and its subsidiaries, taken as a whole (a "Material Adverse Effect").

     (d) Each subsidiary of the Company has been duly organized or incorporated,
is validly existing as a corporation or limited liability company in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business as
described in the Registration Statement and the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect; and all of the issued
shares of capital stock or membership interests of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned by the Company, free and clear of any pledge, lien,
security interest, charge, claim, equity or encumbrance of any kind, except as
set forth in Schedule III attached hereto. There are no outstanding rights,
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or membership interests of any subsidiary of
the Company.

     (e) Schedule IV(a) hereto is a complete and accurate list of the Company's
operating subsidiaries incorporated under the laws of the Republic of Liberia
and Schedule IV(b) is a complete and accurate list of the Company's subsidiaries
organized or incorporated under the laws of the Republic of Liberia that have no
operations or assets; Schedule V(a) hereto is a complete and accurate list of
the Company's operating subsidiaries organized or incorporated under the laws of
The Bahamas; Schedule V(b) hereto is a complete and accurate list of the

                                       3
<PAGE>

Company's subsidiaries organized or incorporated under the laws of The Bahamas
that have no operations or assets; Schedule VI(a) hereto is a complete and
accurate list of the Company's operating subsidiaries organized or incorporated
under the laws of the Republic of The Marshall Islands; Schedule VI(b) hereto is
a complete and accurate list of the Company's subsidiaries organized or
incorporated under the laws of the Republic of The Marshall Islands that have no
operations or assets; Schedule VII(a) hereto is a complete and accurate list of
the Company's operating subsidiaries organized or incorporated under the laws of
Norway; Schedule VII(b) hereto is a complete and accurate list of the Company's
subsidiaries organized or incorporated under the laws of Norway that have no
operations or assets; Schedule VIII(a) hereto is a complete and accurate list of
the Company's operating subsidiaries organized or incorporated under the laws of
Bermuda and Schedule VIII(b) hereto is a complete and accurate list of the
Company's subsidiaries organized or incorporated under the laws of Bermuda that
have no operations or assets.

     (f) The authorized capital stock of the Company conforms as to legal
matters to the descriptions thereof contained in the Prospectus.

     (g) All of the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and non-assessable, conform as
to legal matters to the descriptions thereof contained in the Prospectus and
none of the outstanding shares of capital stock of the Company was issued in
violation of the preemptive or similar rights of any shareholder of the Company.

     (h) This Agreement has been duly authorized and, when executed and
delivered by the Company, this Agreement will constitute a valid and legally
binding instrument.

     (i) The Securities have been duly authorized, and, when authenticated and
executed in accordance with the provisions of the Purchase Contract Agreement
and the first supplemental indenture (the "First Supplemental Indenture") to be
dated as of February [__], 2003 to the indenture dated as of February [ ], 2003
(the "Base Indenture," and as supplemented by the First Supplemental Indenture,
the "Indenture") between the Company and The Bank of New York as Trustee (the
"Trustee") and delivered to and paid for by the Underwriters pursuant to this
Agreement, will have been duly executed, authenticated, issued and delivered and
the Securities will be entitled to the benefits of the Purchase Contract
Agreement in the case of the Purchase Contracts and the Indenture in the case of
the Notes and will constitute valid and legally binding agreements of the
Company enforceable in accordance with their terms, subject, as to enforcement,
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles; provided, however, that upon the occurrence of a Termination Event
(as defined in the Purchase Contract), the Bankruptcy Code (11 U.S.C. ss.ss.
101-1330, as amended) should not substantively limit the provisions of Sections
3.15 and 5.06(a) of the Purchase Contract Agreement or Section 5.04 of the
Pledge Agreement that require termination of the Purchase Contracts and release
of the Collateral Agent's security interest in (1) the Notes or (2) the Treasury
Securities (as defined in the Purchase Contract Agreement), as applicable, and
the transfer of such Notes and Treasury Securities to the Purchase Contract
Agent, for the benefit of the Holders of the Securities; provided further, that
the Company makes no representation as to whether a court exercising bankruptcy
jurisdiction might issue a temporary restraining order or provide other interim
relief

                                       4
<PAGE>

that would delay the exercise of such termination right for a period of time
pending final adjudication of any challenge to the exercise of such right during
a bankruptcy case involving the Company.

     (j) The Indenture has been duly authorized by the Company and duly
qualified under the Trust Indenture Act, and, when the Base Indenture and the
First Supplemental Indenture are executed and delivered by the Company and the
Trustee, will constitute a valid and legally binding instrument of the Company,
enforceable against the Company in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general equity
principles (regardless of whether considered in a proceeding at law or in
equity) and the Securities and the Indenture will conform in all material
respects to the descriptions thereof in the Prospectus and will be in
substantially the form previously delivered to you.

     (k) The Securities have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance; and the Securities have been
registered under the Exchange Act.

     (l) The Notes included in the Securities have been duly authorized, and,
when authenticated and executed in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters pursuant to this
Agreement, will constitute valid and legally binding agreements of the Company
enforceable in accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity principles, and
will conform in all material respects to the description thereof contained in
the Prospectus and will be in substantially the form previously delivered to
you.

     (m) The Common Shares issuable pursuant to the Purchase Contracts included
in the Securities have been duly authorized and reserved for issuance. Such
Common Shares, when issued and delivered in accordance with the provisions of
the PEPS Agreements, will be validly issued, fully paid and non-assessable; and
the issuance of such Common Shares will not be subject to any preemptive rights
other than those that have been waived.

     (n) Each of the PEPS Agreements and the Remarketing Agreement has been duly
authorized and, when validly executed and delivered by the Company, will
constitute a valid and legally binding obligation of the Company, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors' rights and to general equity principles, (regardless of
whether considered in a proceeding at law or in equity); provided, however, that
upon the occurrence of a Termination Event (as defined in the Purchase
Contract), the Bankruptcy Code (11 U.S.C. ss.ss. 101-1330, as amended) should
not substantively limit the provisions of Sections 3.15 and 5.06(a) of the
Purchase Contract Agreement or Section 5.04 of the Pledge Agreement that require
termination of the Purchase Contracts and release of the Collateral Agent's
security interest in (1) the Notes or (2) the Treasury Securities (as defined in
the Purchase Contract Agreement), as applicable, and the transfer of such Notes
and Treasury Securities to the Purchase Contract Agent, for the benefit of the
Holders of the Securities; provided further, the Company makes no representation
as to whether a court exercising bankruptcy jurisdiction might issue a temporary

                                       5
<PAGE>

restraining order or provide other interim relief that would delay the exercise
of such termination right for a period of time pending final adjudication of any
challenge to the exercise of such right during a bankruptcy case involving the
Company; and each of the PEPS Agreements and the Remarketing Agreement will
conform in all material respects to the descriptions thereof in the Prospectus.

     (o) None of the Company nor any of the subsidiaries is in violation of its
articles of incorporation or by-laws, or in default in the performance or
observance of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which any of the Company or the subsidiaries is a party or by
which any of them is bound.

     (p) Neither the execution and delivery by the Company of, or the
performance by it of its obligations under, this Agreement, the PEPS Agreements,
the Remarketing Agreement, the Securities, the Notes and the Indenture, nor the
consummation of the transactions contemplated hereby will (A) conflict with or
result in a breach or violation of any provision of (i) the articles of
incorporation and by-laws of the Company, (ii) any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which any of
the Company or any of the subsidiaries is a party or by which any of them is or
may be bound or to which any of their respective properties or assets is or may
be subject, or (iii) any statute or any judgment, order, decree, rule or
regulation (collectively, any "Order") of any court, central bank, stock
exchange or governmental agency or body (collectively, a "Regulatory Authority")
having jurisdiction over the Company or any of its subsidiaries or any of their
properties, except, with respect to the foregoing clause (ii), to the extent
such conflict or contravention would not have a Material Adverse Effect, or (B)
result in the creation or imposition of any lien, charge or encumbrance upon or
with respect to any property or assets of any of the Company or the
subsidiaries.

     (q) No consent, approval, authorization or order of, qualification with, or
registration or filing with any Regulatory Authority is required for the issue
and sale of the Securities or the performance by the Company of its obligations
under this Agreement, the PEPS Agreements, the Remarketing Agreement, the
Securities, the Notes or the Indenture, except such as may be required (1) for
registrations and filings under the Securities Act or the Exchange Act, (2) the
qualification of the Indenture under the Trust Indenture Act, and (3) under the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Securities.

     (r) The Company and its subsidiaries have good and marketable title in fee
simple to all real property and good and marketable title to all properties and
assets owned by them, in each case free and clear of all liens, encumbrances and
defects, except such as are described in the Prospectus or are created pursuant
to credit agreements and related security agreements disclosed or referred to in
the Prospectus or Schedule III attached hereto or such as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company and its subsidiaries.

     (s) The consolidated financial statements of the Company (together with
related schedules and notes) incorporated by reference in the Registration
Statement and Prospectus comply as to form in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder and present fairly the

                                       6
<PAGE>

consolidated financial position of the Company and its subsidiaries as of the
dates indicated and the consolidated results of its operations and changes in
financial position of the Company and its subsidiaries for the periods
specified; except with respect to Ugland Nordic Shipping ASA, a Norwegian
corporation ("UNS"), such financial statements and related schedules and notes
have been prepared in conformity with United States generally accepted
accounting principles applied on a consistent basis during the periods involved.
The selected financial data included in the Prospectus present fairly the
information shown therein. Such selected financial data as at and for the fiscal
years ended December 31, 2001, 2000, 1999, March 31, 1999 and 1998 have been
derived from the audited consolidated financial statements of the Company, and
such summary financial data as at and for the nine month periods ended September
30, 2002 and 2001 have been derived from the unaudited consolidated financial
statements of the Company.

     (t) Neither the Company nor any of its subsidiaries has sustained since the
date of the latest audited financial statements incorporated by reference in the
Registration Statement and Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Registration
Statement and Prospectus; and, since the respective dates as of which
information is given in the Registration Statement and Prospectus, there has not
been any material change in the capital stock or long-term debt (other than an
immaterial change due to repayment or borrowing under existing credit
agreements) of the Company or any of its subsidiaries or any material adverse
change, or any development involving a prospective material adverse change, in
or affecting the general affairs, management, financial position, shareholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Registration Statement
and Prospectus.

     (u) Other than as set forth in the Registration Statement and Prospectus,
there are no legal or governmental proceedings pending to which the Company or
any of its subsidiaries is a party or to which any of their respective
properties is subject which, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate, have a Material
Adverse Effect; and to the best of the Company's knowledge, no such proceedings
are threatened or contemplated by Regulatory Authorities or threatened by
others.

     (v) Each of the Company and its subsidiaries has all necessary consents,
authorizations, approvals, orders, franchises, licenses, certificates (including
certificates of authority), concessions or permits (collectively, "Permits") of
and from, and has made all declarations and filings with, all federal,
provincial, state, local or other Regulatory Authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease license and use
its properties and assets and to conduct the business as described in the
Registration Statement and the Prospectus, except where the failure to possess
such Permits or to make such declarations or filings would not have a Material
Adverse Effect; neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to revocation, modification or any other material
impairment of any Permit.

     (w) The Company is not, and after giving effect to the offering and sale of
the Securities will not be, an "investment company" within the meaning of the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act").

                                       7
<PAGE>

     (x) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
include any securities of the Company with the Securities registered pursuant to
the Registration Statement or, except as described in the Prospectus and
Registration Statement, to file a registration statement under the Securities
Act with respect to any securities of the Company, in each case, other than such
rights as have been waived.

     (y) The statements set forth in the Prospectus Supplement under the caption
"Description of the PEPS Units," "Description of the Purchase Contracts,"
"Description of the Notes," "Certain Provisions of the Purchase Contracts, the
Purchase Contract Agreement and the Pledge Agreement," "Taxation of Teekay," and
"Tax Consequences" and the statements set forth in the Base Prospectus under the
captions "Securities We May Issue," "Description of Capital Stock," "Description
of Warrants," "Description of Stock Purchase Contracts and Stock Purchase
Units," and "Description of Debt Securities," insofar as they purport to
describe the provisions of the laws and documents referred to therein, are
accurate, complete and fair.

     (z) No material labor dispute with the employees of the Company or any of
its subsidiaries exists, except as described in or contemplated by the
Registration Statement or Prospectus, or to the knowledge of the Company, is
imminent.

     (aa) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility, participate in insurance clubs, self-insure
or have similar coverage against such losses and risks and in such amounts as
are prudent and customary in the businesses in which they are engaged.

     (bb) Except as otherwise described in the Prospectus and Registration
Statement, the Company and its subsidiaries (i) are in compliance with any and
all applicable foreign, federal, provincial, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits, licenses or
other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in the aggregate,
have a Material Adverse Effect.

     (cc) Except as otherwise described in the Registration Statement and
Prospectus, in the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any permit, license or
approval, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities would not,
singly or in the aggregate, have a Material Adverse Effect.

                                       8
<PAGE>

     (dd) Except as otherwise described in the Prospectus, each of the Company
and its subsidiaries has filed all income or other tax returns that are required
to have been filed in its relevant jurisdictions, except insofar as the failure
to file such returns would not have a Material Adverse Effect, and has paid all
taxes due pursuant to such returns or pursuant to any assessment received by the
Company, except for such taxes, if any, as are being contested in good faith and
for which adequate reserves have been provided.

     (ee) There is no tax, levy, impost, deduction, charge or withholding
imposed by the Republic of The Marshall Islands, Republic of Liberia, Bermuda,
Norway or any political subdivision or taxing authority thereof either (i) on or
by virtue of the execution, delivery or performance of this Agreement, the
Indenture, the PEPS Agreements, the Remarketing Agreement or any other document
to be furnished hereunder, or (ii) on any payment to be made by the Company
pursuant to this Agreement, the Indenture, the PEPS Agreements, the Remarketing
Agreement or the Securities, except for any tax, levy, impost, deduction, charge
or withholding imposed on payments made to holders of Securities who reside in,
maintain an office in or engage in business in the Republic of The Marshall
Islands, Republic of Liberia, Bermuda or Norway.

     (ff) Each of the Company, Teekay Chartering Limited ("Teekay Chartering"),
Bona Shipholding Ltd. ("Bona") and UNS, is, and immediately after the Closing
Date will be, Solvent. As used herein, the term "Solvent" means, with respect to
each of the Company, Teekay Chartering, Bona or UNS on a particular date (i) the
fair market value of the assets of the Company, Teekay Chartering, Bona or UNS,
as the case may be, is greater than the total amount of liabilities (including
contingent liabilities) of the Company, Teekay Chartering, Bona or UNS, as the
case may be, (ii) the present fair saleable value of the assets of the Company,
Teekay Chartering, Bona or UNS, as the case may be, is greater than the amount
that will be required to pay the probable liabilities of the Company, Teekay
Chartering, Bona or UNS, as the case may be, on its debts as they become
absolute and matured, (iii) the Company, Teekay Chartering, Bona or UNS, as the
case may be, is able to realize upon its assets and pay its debts and other
liabilities, including contingent obligations, as they mature and (iv) the
Company, Teekay Chartering, Bona or UNS, as the case may be, does not have an
unreasonably small capital.

     (gg) The Company maintains, and each of the subsidiaries maintain, a system
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with United States generally
accepted accounting principles and with statutory accounting principles, as the
case may be, and to maintain accountability for assets; (iii) access to assets
is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

     (hh) None of the Company nor any of its subsidiaries or any employee or
agent thereof has made any payment of funds or received or retained any funds in
violation of any law, rule or regulation, which payment, receipt or retention of
funds is of a character required to be disclosed in the Prospectus.

                                       9
<PAGE>

     (ii) The statements made in the Prospectus under the caption "Service of
Process and Enforcement of Liabilities", insofar as they purport to constitute a
summary of the provisions of the laws therein, are accurate, complete and fair,
in all material respects.

     (jj) The Company is subject to Section 13 or 15(d) of the Exchange Act.

     (kk) The Company is not a Passive Foreign Investment Company ("PFIC")
within the meaning of Section 1296 of the United States Internal Revenue Code of
1986, as amended, and is not likely to become a PFIC.

     (ll) Neither the sale of the Securities by the Company hereunder nor the
use of the proceeds thereof will cause any U.S. person participating in the
offering, either as underwriter and/or purchasers of the Securities, to violate
the Trading With the Enemy Act, as amended, the International Emergency
Economics Powers Act, as amended or any foreign asset control regulations of the
United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended)
(all such laws and regulations collectively referred to as the "Sanctions Laws
and Regulations") or any enabling legislation or executive order relating
thereto.

     (mm) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within the
meaning of Section 517.075, Florida Statutes.

     (nn) The documents incorporated by reference in the Registration Statement
and Prospectus, when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act, and the rules and
regulations of the Commission thereunder, and none of such documents contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading when they were filed with the Commission; and any further documents
so incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.

     (oo) None of the transactions contemplated by this Agreement (including,
without limitation, the use of the proceeds from the sale of the Securities)
will violate or result in a violation of Section 7 of the Exchange Act, or any
regulation promulgated thereunder, including, without limitation, Regulations G,
T, U, and X of the Board of Governors of the Federal Reserve System.

2.   Representations and Warranties of the Company.  The Company represents and
warrants to and agrees with each of the Underwriters that, to its knowledge:

     (a) Navion ASA, a wholly-owned subsidiary of Statoil ASA ("Navion"), has
been duly organized and is validly existing as a corporation under the laws of
the Kingdom of Norway, with corporate power and authority to own, its properties
and to conduct its business and has been duly qualified to transact business and
is in good standing in each other jurisdiction

                                       10
<PAGE>

in which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not, after giving effect to the
acquisition by the Company of such assets of Navion that is contemplated in the
Share Sale and Purchase Agreement by and among Statoil ASA and Statpet AS and
Norsk Teekay AS, dated December 15, 2002, on the general affairs, management,
the current or future consolidated financial position, business prospects,
shareholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect After Navion").

     (b) Each subsidiary of Navion listed on Schedule IX(a) attached hereto
(that purports to identify each subsidiary of Navion that constitutes a
"significant subsidiary" as such term is defined in Rule 1-02 of Regulation S-X)
(collectively, the "Significant Navion Subsidiaries") has been duly
incorporated, is validly existing as a corporation under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its property and to conduct its business and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect After Navion.

     (c) None of Navion nor any of the Significant Navion Subsidiaries is in
violation of its articles of incorporation or by-laws, or in default in the
performance or observance of any material obligation, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which Navion or any of the Significant Navion
Subsidiaries is a party or by which it is bound.

     (d) Navion and each of the Significant Navion Subsidiaries has good and
marketable title in fee simple to all real property and good and marketable
title to all properties and assets owned by them, in each case free and clear of
all liens, encumbrances and defects, except such as do not materially affect the
value of such property and do not interfere with the use made and proposed to be
made of such property by Navion and the Significant Navion Subsidiaries.

     (e) There are no legal or governmental proceedings pending to which Navion
or any Significant Navion Subsidiaries is a party or to which its properties is
subject which, if determined adversely to Navion or any Significant Navion
Subsidiaries, would individually or in the aggregate, have a Material Adverse
Effect After Navion; and no such proceedings are threatened or contemplated by
Regulatory Authorities or threatened by others.

     (f) Each of Navion and the Significant Navion Subsidiaries has all
necessary Permits of and from, and has made all declarations and filings with,
all federal, provincial, state, local or other Regulatory Authorities, all
self-regulatory organizations and all courts and other tribunals, to own, lease
license and use its properties and assets and to conduct the business, except
where the failure to possess such Permits or to make such declarations or
filings would not have a Material Adverse Effect After Navion; and neither
Navion nor any Significant Navion Subsidiaries has received any notice of
proceedings relating to revocation, modification or any other material
impairment of any Permit.

                                       11
<PAGE>

     (g) Navion and the Significant Navion Subsidiaries (i) are in compliance
with any and all Environmental Laws, (ii) have received all permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct
its business and (iii) are in compliance with all terms and conditions of any
such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a Material
Adverse Effect After Navion.

     (h) The Company believes that, in the ordinary course of its business,
Navion conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of Navion and its subsidiaries, in the
course of which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties). The Company believes that, on the
basis of such review, Navion has reasonably concluded that such associated costs
and liabilities would not, singly or in the aggregate, have a Material Adverse
Effect After Navion.

     (i) No material labor dispute with the employees of Navion or any of the
Significant Navion Subsidiaries exists or, to the best of the Company's
knowledge, is imminent.

     (j) Navion and each of the Significant Navion Subsidiaries are insured by
insurers of recognized financial responsibility, participate in insurance clubs,
self-insure or have similar coverage against such losses and risks and in such
amounts as are prudent and customary in the business in which they are engaged.

3.   Agreements to Sell and Purchase. The Company hereby agrees to sell to the
several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, hereby agrees, severally and not jointly, to purchase from
the Company at $25.00 per Firm Security (the "Purchase Price") the number of
Firm Securities set forth in Schedule I hereto opposite the name of such
Underwriter.

     On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the Underwriters the Option Securities, and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to 750,000 Option
Securities at the Purchase Price, plus accrued dividends, if any, to the Option
Closing Date (as defined below). If you, on behalf of the Underwriters, elect to
exercise such option, you shall so notify the Company in writing not later than
30 days after the date of this Agreement, which notice shall specify the number
of Option Securities to be purchased by the Underwriters and the date on which
such Option Securities are to be purchased. Such date may be the same as the
Closing Date (as defined below) but not earlier than the Closing Date nor later
than ten business days after the date of such notice. Option Securities may be
purchased as provided in Section 4 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Securities. If
any Option Securities are to be purchased, each Underwriter agrees, severally
and not jointly, to purchase the number of Option Securities (subject to such
adjustments to eliminate fractional units as you may determine) that bears the
same proportion to the total number of Option Securities to be

                                       12
<PAGE>

purchased as the number of Firm Securities set forth in Schedule I hereto
opposite the name of such Underwriter bears to the total number of Firm
Securities.

     The Company hereby agrees that, without the prior written consent of Morgan
Stanley & Co. Incorporated and Salomon Smith Barney Inc. it will not, during the
period commencing on the date hereof and ending 90 days after the date of the
Prospectus Supplement (1) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any Securities, Purchase Contracts or Common Shares or
any securities convertible into or exercisable or exchangeable for any
Securities, Purchase Contracts or Common Shares or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Securities, Purchase Contracts or
Common Shares, whether any such transaction described in clause (1) or (2) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (a) the sale of any
Securities to the Underwriters hereunder, (b) the issuance by the Company of
shares of Common Stock upon the exercise of an option or warrant or the
conversion of a security outstanding on the date hereof of which the
Underwriters have been advised in writing, or (c) the sale or issuance by the
Company of shares of Common Stock pursuant to employee benefit, option or stock
repurchase plans in existence as of the date hereof.

4.   Terms of Public Offering. The Company is advised by you that the
Underwriters propose to make a public offering of their respective portions of
the Securities as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable. The Company is further
advised by you that the Securities are to be offered to the public initially at
$25.00 per PEPS Unit (the "Public Offering Price"), and to certain dealers
selected by you at a price that represents a concession not in excess of $[__]
per PEPS Unit under the Public Offering Price.

5.   Payment and Delivery. Payment for the Firm Securities to be sold by the
Company shall be made to the Company in Federal or other funds immediately
available in New York City against delivery to you for the respective accounts
of the several Underwriters of the certificates for the Firm Securities at the
offices of Shearman & Sterling, 1080 Marsh Road, Menlo Park, California,
94025-1022, at 9:00 a.m., New York City time, on February [__], 2003, or at such
other time on the same or such other date, not later than five business days
after the date of this Agreement as shall be designated in writing by you. The
time and date of such payment are hereinafter referred to as the "Closing Date."

     Payment for the Option Securities shall be made to the Company in Federal
or other funds immediately available in New York City against delivery to
Underwriters of the certificates for the Option Securities purchased by the
Underwriters on the date specified in the notice described in Section 3 or at
such other time on the same or on such other date, in any event not later than
10 business days after the expiration of the Underwriters' option to purchase
Option Securities as shall be designated in writing by you. The time and date of
such payment are hereinafter referred to as the "Option Closing Date."

                                       13
<PAGE>

     The certificates, if any, for the Securities purchased by the Underwriters
shall be registered in such names and in such denominations as you shall request
in writing not later than one full business day prior to the Closing Date or the
Option Closing Date, as the case may be. The certificates, if any, evidencing
the Firm Securities or Option Securities shall be delivered to you on the
Closing Date or the Option Closing Date, as the case may be, for the respective
accounts of the several Underwriters, with any transfer taxes payable in
connection with the transfer of the Firm Securities or Option Securities to the
Underwriters duly paid, against payment of the Purchase Price with respect to
such Securities.

6.   Conditions to the Underwriters' Obligations. The several obligations of the
Underwriters to purchase and pay for the Securities on the Closing Date are
subject, in the discretion of the Underwriters, to the condition that all
representations and warranties and other statements of the Company in this
Agreement are, at and as of the Closing Date, true and correct, the condition
that the Company shall have performed all of its obligations hereunder
theretofore to be performed, and to the following conditions:

     (a) The Prospectus as amended or supplemented in relation to the Securities
shall have been filed with the Commission pursuant to Rule 424(b) within the
applicable time period prescribed for such filing by the rules and regulations
under the Securities Act and in accordance with Section 6(a) hereof; no stop
order suspending the effectiveness of the Registration Statement shall have been
instituted or shall be pending or, to the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of the Underwriters.

     (b) Subsequent to the execution and delivery of this Agreement and prior to
the Closing Date:

         (i)   there shall not have occurred any downgrading, nor shall any
     notice have been given of any intended or potential downgrading or of any
     review for a possible change that does not indicate the direction of the
     possible change, in the rating accorded any of the Company's securities by
     any "nationally recognized statistical rating organization" as such term is
     defined for purposes of Rule 436(g)(2) under the Securities Act; and

         (ii)  there shall not have occurred any change, or any development
     involving a prospective change, in the condition, financial or otherwise,
     or in the earnings, business or operations of the Company and its
     subsidiaries, taken as a whole, from that set forth in the Prospectus
     (exclusive of any amendments or supplements thereto subsequent to the date
     of this Agreement) that, in your judgment, is material and adverse and that
     makes it, in your judgment, impracticable to market the Securities on the
     terms and in the manner contemplated in the Prospectus.

     (c) The Underwriters shall have received on the Closing Date a certificate,
dated the Closing Date and signed by an executive officer of the Company, to the
effect set forth in Section 6(b)(i) above and to the effect that (A) the
representations and warranties of the Company contained in this Agreement are
true and correct as of the Closing Date and that the

                                       14
<PAGE>

Company has complied with all of the agreements and satisfied all of the
conditions on its part to be performed or satisfied hereunder on or before the
Closing Date; and (B) there shall not have occurred any change, or any
development involving a prospective change in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement).

     (d) The Underwriters shall have received on the Closing Date an opinion of
Watson, Farley & Williams, counsel for the Company, dated the Closing Date and
addressed to you in form and substance satisfactory to counsel for the
Underwriters, to the effect that:

         (i)     The Company was duly incorporated in the Republic of Liberia.

         (ii)    The Company is validly existing as a corporation in good
     standing under the law of the Republic of The Marshall Islands, has the
     corporate power and authority to own its property and to conduct its
     business as described in the Registration Statement and Prospectus.

         (iii)   The Underwriting Agreement has been duly authorized, executed
     and delivered on behalf of the Company.

         (iv)    The Indenture has been duly authorized, executed and delivered
     on behalf of the Company.

         (v)     Each of the PEPS Agreements has been duly authorized, executed
     and delivered on behalf of the Company.

         (vi)    The Remarketing Agreement has been duly authorized, executed
     and delivered on behalf of the Company.

         (vii)   The Company has an authorized capitalization as set forth in
     the Prospectus, and all of the issued shares of capital stock of the
     Company have been duly and validly authorized and issued and are fully paid
     and non-assessable.

         (viii)  Each of the subsidiaries of the Company listed on Schedules
     IV(a) and VI(a) hereto has been duly formed or incorporated, is validly
     existing as a corporation or a limited liability company in good standing
     under the laws of the Republic of The Marshall Islands or Republic of
     Liberia, as the case may be, and has the limited liability company or
     corporate power and authority to own its property and to conduct its
     business as described in the Registration Statement and Prospectus.

         (ix)    All of the issued shares of capital stock or membership
     interests, as the case may be, of each subsidiary listed on Schedule IV(a)
     have been duly authorized and validly issued and, assuming issuance against
     payment therefor, are fully paid and non-assessable. To such counsel's
     knowledge, all of the shares of capital stock or membership interests, as
     the case may be, of each subsidiary listed on Schedules IV(a) and VI(a) are
     owned, directly or indirectly, by the Company free and clear of any pledge,
     lien, security interest, charge, claim, equity or encumbrance of any kind
     except as set

                                       15
<PAGE>

     forth in Schedule III. To such counsel's knowledge, there are no
     outstanding rights, warrants or options to acquire, or instruments
     convertible into or exchangeable for, any shares of capital stock or
     membership interests of any subsidiary listed on Schedules IV(a) and VI(a).

         (x)     The Securities have been duly authorized, executed and
     delivered on behalf of the Company.

         (xi)    The Notes have been duly authorized, executed and delivered on
     behalf of the Company.

         (xii)   The shares of Common Stock to be issued and sold by the Company
     pursuant to the Purchase Contracts have been duly authorized and reserved
     for issuance and, when issued and delivered in accordance with the
     provisions of the Purchase Contract Agreement, will be validly issued,
     fully paid and non-assessable.

         (xiii)  The statements in the Registration Statement and Prospectus
     under the captions "Taxation of Teekay - Marshall Islands Taxation" and
     "Regulation" and in the Company's Form 20-F for the year ended December 31,
     2001 ("20-F") under the captions "Item 4 - Environmental Regulation -
     International Maritime Organization," "Item 4 - Environmental Regulation -
     The United States Oil Pollution Act of 1990," "Item 4 - Environmental
     Regulation - Other Environmental Initiatives," and "Item 10 - Taxation,"
     insofar as such statements constitute summaries of the legal matters,
     documents or proceedings referred to therein, fairly summarize the matters
     referred to therein.

         (xiv)   Although such counsel assumes no responsibility for the factual
     accuracy, completeness or fairness of the statements contained in the
     Registration Statement and Prospectus under the caption "Regulation," and
     in the 20-F under the captions "Item 4 - Environmental Regulation -
     International Maritime Organization," "Item 4 - Environmental Regulation -
     The United States Oil Pollution Act of 1990," and "Item 4 - Environmental
     Regulation - Other Environmental Initiatives," on the basis of the
     procedures undertaken by counsel (and relying as to materiality to the
     extent such counsel deems appropriate upon the opinions of officers and
     other representatives of the Company), no facts have come to the attention
     of counsel that cause it to believe that the statements contained in the
     Registration Statement and Prospectus under the caption "Regulation" and in
     the 20-F under the captions "Item 4 - Environmental Regulation -
     International Maritime Organization," "Item 4 - Environmental Regulation -
     The United States Oil Pollution Act of 1990," and "Item 4 - Environmental
     Regulation - Other Environmental Initiatives," and any further amendments
     or supplements thereto and made by the Company prior to the Closing Date
     contained as of its date or contains as of the Closing Date an untrue
     statement of a material fact or omitted or omits, as the case may be, to
     state a material fact necessary to make the statements therein, in the
     light of the circumstances under which they were made, not misleading.

         (xv)    The choice of New York law to govern the Underwriting Agreement
     constitutes a valid choice of law insofar as the laws of The Republic of
     the Marshall

                                       16
<PAGE>

     Islands are concerned. The submission by the Company to the non-exclusive
     jurisdiction of any federal or state court in the Borough of Manhattan, The
     City of New York (a "New York Court") is a valid submission insofar as the
     laws of The Republic of the Marshall Islands are concerned, provided that
     Watson, Farley & Williams has accepted its appointment by the Company as
     its agent to accept service of process in the United States of America
     under this Agreement.

         (xvi)   A judgment granted by a foreign court against the Company may
     be enforced in The Republic of the Marshall Islands without a retrial on
     the merits of the matter provided that: (A) the judgment is for a specific,
     ascertained sum of money and is final in the jurisdiction granting the
     judgment; (B) the court granting the judgment had jurisdiction under the
     laws of the place where the court is seated; (C) the judgment does not
     offend the principles of the Republic of the Marshall Islands as to due
     process, natural justice or public policy; (D) the judgment was not
     obtained by fraud; (E) the judgment does not conflict with another final
     and conclusive judgment; (F) the defendant was actually present in person
     or by a duly appointed representative and (G) the judgment does not in
     effect constitute a default judgment.

     (e) The Underwriters shall have received on the Closing Date an opinion of
Graham, Thompson & Co., special Bahamian counsel for the Company, dated the
Closing Date and addressed to you in form and substance satisfactory to counsel
for the Underwriters, to the effect that:

         (i)     Each of the subsidiaries of the Company listed on Schedule V(a)
     thereto, has been duly organized, is validly existing as a corporation in
     good standing under the laws of Commonwealth of The Bahamas and has the
     corporate power and authority to own its property and to conduct its
     business as described in the Registration Statement and Prospectus and is
     duly qualified to transact business.

         (ii)    All of the issued shares of capital stock of each subsidiary
     listed on Schedule V(a) have been duly authorized and validly issued and,
     assuming issuance against payment therefor, are fully paid and
     non-assessable. To such counsel's knowledge, all of the shares of capital
     stock of each subsidiary listed on Schedule V(a) are owned, directly or
     indirectly, by the Company free and clear of any pledge, lien, security
     interest, charge, claim, equity or encumbrance of any kind. To such
     counsel's knowledge, there are no outstanding rights, warrants or options
     to acquire, or instruments convertible into or exchangeable for, any shares
     of capital stock of any subsidiary listed on Schedule V(a).

         (iii)   The statements in the Prospectus under the caption "Taxation of
     Teekay - Bahamian Taxation," insofar as such statements constitute
     summaries of the legal matters, documents or proceedings referred to
     therein, fairly present the information called for with respect to such
     legal matters, documents and proceedings and fairly summarize the matters
     referred to therein.

     (f) The Underwriters shall have received on the Closing Date an opinion of
Seward & Kissel LLP, special counsel for the Company, dated the Closing Date and
addressed to you in

                                       17
<PAGE>

form and substance satisfactory to counsel for the Underwriters, to the effect
that the statements in the Prospectus under the caption "Taxation of Teekay -
United States Taxation," "- Taxation of Our Shipping Income: In General," "-
Application of Code Section 883," and "- Taxation in Absence of Internal Revenue
Code Section 883 Exemption" insofar as such statements constitute summaries of
the legal matters, documents or proceedings referred to therein, fairly present
the information called for with respect to such legal matters, documents and
proceedings and fairly summarize the matters referred to therein.

     (g) The Underwriters shall have received on the Closing Date an opinion of
Thommessen Krefting Greve Lund AS Advokatfirma, special Norwegian counsel for
the Company, dated the Closing Date and addressed to you in form and substance
satisfactory to counsel for the Underwriters, to the effect that:

         (i)     Each of the corporations of the Company listed on Schedule
     VII(a) thereto has been duly incorporated. Each of the partnerships of the
     Company listed on Schedule VII(a) thereto has been duly established. Each
     of the subsidiaries listed on Schedule VII(a) is validly existing under the
     laws of the Kingdom of Norway and has the corporate power and authority to
     own its property and to conduct its business as described in the
     Registration Statement and Prospectus and is duly qualified to transact
     business.

         (ii)    All of the issued shares of each corporation listed on Schedule
     VII(a) or interest in each partnership listed on Schedule VII(a) have been
     duly authorized and validly issued and the shares, assuming issuance
     against payment therefor, are fully paid and non-assessable. To such
     counsel's knowledge, all of the shares of capital stock of each subsidiary
     listed on Schedule VII(a) are owned, directly or indirectly, by the Company
     free and clear of any pledge, lien, security interest, charge, claim,
     equity or encumbrance of any kind. To such counsel's knowledge, there are
     no outstanding rights, warrants or options to acquire, or instruments
     convertible into or exchangeable for, any shares of capital stock of any
     corporations listed on Schedule VII(a) nor any such corresponding rights to
     any partnership interest in any of the partnerships listed on Schedule
     VII(a).

         (iii)   The statements in the Registration Statement and Prospectus
     under the captions "Taxation of Teekay - Norwegian Taxation" insofar as
     such statements constitute summaries of the legal matters, documents or
     proceedings referred to therein, fairly present the information called for
     with respect to such legal matters, documents and proceedings and fairly
     summarize the matters referred to therein.

         (iv)    Each of Navion and the Significant Navion Subsidiaries has been
     duly incorporated under the laws of the Kingdom of Norway. Each of Navion
     and the Significant Navion Subsidiaries is validly existing under the laws
     of the Kingdom of Norway and has the corporate power and authority to own
     its property and to conduct its business and is duly qualified to transact
     business in Norway.

         (v)     All of the issued shares of capital stock of each Significant
     Navion Subsidiary have been duly authorized and validly issued and,
     assuming issuance against payment therefor, are fully paid and
     non-assessable.

                                       18
<PAGE>

     (h) The Underwriters shall have received on the Closing Date an opinion of
Perkins Coie LLP, counsel for the Company, dated the Closing Date and addressed
to you in form and substance satisfactory to counsel for the Underwriters, to
the effect that:

         (i)     The Securities, the Indenture, the Underwriting Agreement, the
     PEPS Agreements, the Remarketing Agreement and the Notes conform in all
     material respects to the descriptions thereof in the Prospectus.

         (ii)    The execution and delivery by the Company of, and the
     performance by the Company of its obligations under, the Underwriting
     Agreement, the Indenture, the PEPS Agreements, the Remarketing Agreement,
     the Securities and the Notes (i) will not contravene any provision of the
     laws of the United States or New York or, to such counsel's knowledge, any
     agreement listed as an exhibit to the Company's most recent Form 20-F filed
     with the Commission and any additional documents filed under the Exchange
     Act since the date of such filing or, to such counsel's knowledge, any
     judgment or decree of any governmental body, agency or court of the United
     States or any state thereof having jurisdiction over the Company or any
     subsidiary that has been disclosed in the Company's most recent Form 20-F
     filed with the Commission and any additional documents filed under the
     Exchange Act since the date of such filing and (ii) to such counsel's
     knowledge, will not result in any violation of the provisions of the
     articles of incorporation and by-laws of the Company and will not result in
     or require the creation or imposition of any lien, charge, or other
     encumbrance upon or with respect to any of the properties of the Company or
     any of its subsidiaries, except pursuant to the terms of the Indenture; and
     no consent, approval, authorization or order of or qualification with any
     Regulatory Authority of the United States or New York is required for the
     issue and sale of the Securities or the performance by the Company of its
     obligations under the Underwriting Agreement, the Indenture, the PEPS
     Agreements, the Remarketing Agreement, the Securities or the Notes in
     connection with the offer and sale of the Securities by the Underwriters
     except as may be required by the federal securities or blue sky laws of the
     various states in the United States.

         (iii)   The statements in the Prospectus Supplement under the captions
     "Description of the PEPS Units," "Description of Certain Debt" and "Tax
     Consequences - Material United States Federal Income Tax Consequences" and
     the statements set forth in the Base Prospectus under the captions
     "Securities We May Issue," "Description of Capital Stock," "Description of
     Stock Purchase Contracts and Stock Purchase Units," and "Description of
     Debt Securities," in each case insofar as such statements constitute
     summaries of legal matters, documents or proceedings referred to therein,
     fairly summarize the matters referred to therein in all material respects.

         (iv)    The Company is not an "investment company" or an entity
     "controlled" by an "investment company", as such terms are defined in the
     Investment Company Act, nor a "Passive Foreign Investment Company" within
     the meaning of Section 1297 of the United States Internal Revenue Code of
     1986.

         (v)     Assuming the due authorization, execution, issuance and
     delivery of the Securities by the Company and the due authentication of the
     Securities pursuant to the

                                       19
<PAGE>

     Purchase Contract Agreement and the Indenture, the Securities constitute
     valid and legally binding obligations of the Company entitled to the
     benefits provided by the Indenture on the part of the Notes and the
     Purchase Contract Agreement on the part of the Purchase Contracts,
     enforceable against the Company in accordance with their respective terms,
     subject, as to enforcement, to bankruptcy, insolvency (including, without
     limitation, all laws relating to fraudulent transfers), reorganization,
     moratorium and other laws of general applicability from time to time in
     effect relating to or affecting creditors' rights and to general equitable
     principles (regardless of whether considered in a proceeding in equity or
     at law); provided, however, that upon the occurrence of a Termination Event
     (as defined in the Purchase Contract), the Bankruptcy Code (11
     U.S.C.ss.ss.101-1330, as amended) should not substantively limit the
     provisions of Sections 3.15 and 5.06(a) of the Purchase Contract Agreement
     or Section 5.04 of the Pledge Agreement that require termination of the
     Purchase Contracts and release of the Collateral Agent's security interest
     in (1) the Notes or (2) the Treasury Securities (as defined in the Purchase
     Contract Agreement), as applicable, and the transfer of such Notes and
     Treasury Securities to the Purchase Contract Agent, for the benefit of the
     Holders of the Securities; provided further, however, that no opinion is
     expressed as to whether a court exercising bankruptcy jurisdiction might
     issue a temporary restraining order or provide other interim relief that
     would delay the exercise of such termination right for a period of time
     pending final adjudication of any challenge to the exercise of such right
     during a bankruptcy case involving the Company.

         (vi)    Assuming the due authorization, execution and delivery of the
     Notes by the Company and the due authorization of the Notes by the Trustee,
     the Notes constitute valid and legally binding obligations of the Company
     entitled to the benefits provided by the Indenture, enforceable against the
     Company in accordance with their terms, subject, as to enforcement, to
     bankruptcy, insolvency (including, without limitation, all laws relating to
     fraudulent transfers), reorganization, moratorium and other laws of general
     applicability from time to time in effect relating to or affecting
     creditors' rights and to general equitable principles (regardless of
     whether considered in a proceeding in equity or at law).

         (vii)   The Indenture has been duly qualified under the Trust Indenture
     Act; assuming the due authorization, execution and delivery of the
     Indenture by the Company and the due authentication, execution and delivery
     of the Indenture by the Trustee, the Indenture constitutes a valid and
     legally binding instrument of the Company, enforceable against the Company
     in accordance with its terms, subject, as to enforcement, to bankruptcy,
     insolvency (including, without limitation, all laws relating to fraudulent
     transfers), reorganization, moratorium and other laws of general
     applicability from time to time in effect relating to or affecting
     creditors' rights and to general equitable principles (regardless of
     whether considered in a proceeding in equity or at law).

         (viii)  Assuming the due authorization, execution and delivery of each
     of the PEPS Agreements and the Remarketing Agreement by the Company, each
     of the PEPS Agreements and the Remarketing Agreement constitutes a valid
     and binding agreement of the Company, enforceable against the Company in
     accordance with its terms, subject, as to enforcement, to bankruptcy,
     insolvency (including, without limitation, all laws

                                       20
<PAGE>

     relating to fraudulent transfers), reorganization, moratorium and other
     laws of general applicability from time to time in effect relating to or
     affecting creditors' rights and to general equitable principles (regardless
     of whether considered in a proceeding in equity or at law), provided,
     however, that upon the occurrence of a Termination Event (as defined in the
     Purchase Contract), the Bankruptcy Code (11 U.S.C.ss.ss.101-1330, as
     amended) should not substantively limit the provisions of Sections 3.15 and
     5.06(a) of the Purchase Contract Agreement or Section 5.04 of the Pledge
     Agreement that require termination of the Purchase Contracts and release of
     the Collateral Agent's security interest in (1) the Notes or (2) the
     Treasury Securities (as defined in the Purchase Contract Agreement), as
     applicable, and the transfer of such Notes and Treasury Securities to the
     Purchase Contract Agent, for the benefit of the Holders of the Securities;
     provided further, however, that no opinion is expressed as to whether a
     court exercising bankruptcy jurisdiction might issue a temporary
     restraining order or provide other interim relief that would delay the
     exercise of such termination right for a period of time pending final
     adjudication of any challenge to the exercise of such right during a
     bankruptcy case involving the Company.

         (ix)    To such counsel's knowledge and other than as set forth in the
     Registration Statement and Prospectus, there are no legal or governmental
     proceedings pending or threatened to which the Company or any of its
     subsidiaries is a party or of which any property of the Company or any of
     its subsidiaries is the subject which, if determined adversely to the
     Company or any of its subsidiaries, would have a Material Adverse Effect.

         (x)     The Registration Statement and the Prospectus (other than the
     financial statements and supporting schedules and other financial data
     therein, as to which such counsel need express no belief) comply as to form
     in all material respects with the Securities Act and the applicable rules
     and regulations of the Commission thereunder and the Trust Indenture Act.

         (xi)    The documents incorporated by reference in the Prospectus and
     Registration Statement (other than the financial statements and supporting
     schedules and other financial data therein, as to which such counsel need
     express no belief), when they were filed with the Commission, conformed in
     all material respects to the requirements of the Exchange Act and the rules
     and regulations of the Commission thereunder.

     In addition to the matters set forth above, counsel rendering the foregoing
opinion shall also include a statement to the effect that although such counsel
is not passing upon such statements and assumes no responsibility for and has
made no independent check or investigation to verify the factual accuracy,
completeness or fairness of the statements contained in the Registration
Statement and Prospectus, on the basis of the procedures undertaken by counsel
(and relying as to materiality to the extent such counsel deems appropriate upon
the opinions of officers and other representatives of the Company), no facts
have come to the attention of counsel that cause it to believe that the
Registration Statement and Prospectus and any further amendments or supplements
thereto made by the Company prior to the Closing Date contained as of its date
or as of the Closing Date contained an untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
the light of the

                                       21
<PAGE>

     circumstances under which they were made, not misleading (other than the
     financial statements and supporting schedules and other financial data
     therein, as to which such counsel need express no belief).

     (i) The Underwriters shall have received on the Closing Date, an opinion of
Appleby Spurling & Kempe, special Bermudian counsel for the Company, dated the
Closing Date and addressed to you, in form and substance satisfactory to counsel
for the Underwriters, to the effect that:

         (i)     Each of the subsidiaries of the Company listed on Schedule
     VIII(a) thereto has been duly incorporated, is validly existing as a
     corporation in good standing under the laws of Bermuda and has the
     corporate power and authority to own its property and to conduct its
     business as described in the Registration Statement and Prospectus and is
     duly qualified to transact business.

         (ii)    All of the issued shares of capital stock of each subsidiary
     listed on Schedule VIII(a) have been duly authorized and validly issued
     and, assuming issuance against payment therefor, are fully paid and
     non-assessable. To such counsel's knowledge, all of the shares of capital
     stock of each subsidiary listed on Schedule VIII(a) are owned, directly or
     indirectly, by the Company free and clear of any pledge, lien, security
     interest, charge, claim, equity or encumbrance of any kind. To such
     counsel's knowledge, there are no outstanding rights, warrants or options
     to acquire, or instruments convertible into or exchangeable for, any shares
     of capital stock of any subsidiary listed on Schedule VIII(a), including
     Bona.

         (iii)   The statements in the Prospectus under the captions "Taxation
     of Teekay - Bermudian Taxation" insofar as such statements constitute
     summaries of the legal matters, documents or proceedings referred to
     therein, fairly present the information called for with respect to such
     legal matters, documents and proceedings and fairly summarize the matters
     referred to therein.

         (iv)    Each of the subsidiaries listed on Schedule VIII(a) has been
     designated as non-resident for the purposes of the Exchange Control Act,
     1972 and regulations made thereunder.

         (v)     Each of the subsidiaries listed on Schedule VIII(a) has
     received an assurance from the Ministry of Finance granting an exemption,
     until 28 March 2016, from the imposition of tax under any applicable
     Bermuda law computed on profits or income or computed on any capital asset,
     gain or appreciation, or any tax in the nature of estate duty or
     inheritance tax, provided that such exemption shall not prevent the
     application of any such tax or duty to such persons as are ordinarily
     resident in Bermuda and shall not prevent the application of any tax
     payable in accordance with the provisions of the Land Tax Act 1967 or
     otherwise payable in relation to land in Bermuda leased to the Bermuda
     Subsidiary. Each of the subsidiaries listed on Schedule VIII(a) is not
     required by any Bermuda law or regulation to make any deductions or
     withholdings in Bermuda from any payment it may make to a third party.

                                       22
<PAGE>

         (vi)    There are no Bermuda taxes on profits, income or dividends,
     nor is there any capital gains tax, estate duty or death duty applicable to
     the Company, each of the subsidiaries listed on Schedule VIII(a) or any
     other subsidiary of the Company.

         (vii)   No litigation, arbitration or administrative or other
     proceeding of or before any arbitrator or governmental authority of Bermuda
     is pending against any of the subsidiaries listed on Schedule VIII(a), or
     affecting any of its properties, rights, revenues or assets; and

         (viii)  No notice to the Registrar of Companies of the passing of a
     resolution of members or creditors to wind up or the appointment of a
     liquidator or receiver has been given and no petition to wind up any of the
     subsidiaries listed on Schedule VIII(a) or application to reorganize its
     affairs pursuant to a Scheme of Arrangement or application for the
     appointment or a receiver has been filed with the Supreme Court.

     The opinion of Watson, Farley & Williams described in subsection (d) of
this Section, the opinion of Graham, Thompson & Co. described in subsection (e)
of this Section, the opinion of Seward & Kissell, LLP described in subsection
(f) of this Section, the opinion of Thommessen Krefting Greve Lund AS
Advokatfirma described in subsection (g) of this Section, the opinion of Perkins
Coie LLP described in subsection (h) of this Section and the opinion of Appleby
Spurling & Kempe described in subsection (i) of this Section shall each be
rendered to you at the request of the Company and shall so state therein.

     (j) The Underwriters shall have received on the Closing Date an opinion of
Shearman & Sterling, counsel for the Underwriters, dated the Closing Date in
form and substance satisfactory to the Underwriters.

     (k) The Underwriters shall have received on the Closing Date an opinion of
Seward & Kissel LLP, counsel to The Bank of New York, as Purchase Contract
Agent, dated the Closing Date, and addressed to you in form and substance
reasonably satisfactory to counsel for the Underwriters, to the effect that:

         (i)     The Purchase Contract Agent is a banking corporation validly
     existing under the laws of the State of New York.

         (ii)    The Purchase Contract Agent has the requisite power and
     authority to execute, deliver and perform its obligations under the
     Purchase Contract Agreement and the Pledge Agreement.

         (iii)   The execution, delivery and performance by the Purchase
     Contract Agent of the Purchase Contract Agreement and the Pledge Agreement
     have been duly authorized by all necessary corporate action on the part of
     the Purchase Contract Agent, and the Purchase Contract Agreement and the
     Pledge Agreement have been duly executed and delivered by the Purchase
     Contract Agent, and constitute the valid and binding agreements of the
     Purchase Contract Agent, enforceable against the Purchase Contract Agent in
     accordance with their terms, subject to the effects of bankruptcy,
     insolvency, fraudulent conveyance, reorganization, moratorium and other
     similar laws relating to or affecting creditors' rights generally, general
     equitable principles (whether

                                       23
<PAGE>

     considered in a proceeding in equity or at law) and an implied covenant of
     good faith and fair dealing.

         (iv)    The execution, delivery and performance of the Purchase
     Contract Agreement and the Pledge Agreement by the Purchase Contract Agent
     does not conflict with or constitute a breach of the charter or by-laws of
     the Purchase Contract Agent.

         (v)     No consent, approval or authorization of, or registration with
     or notice to, any state or federal governmental authority or agency
     governing the corporate trust powers of the Purchase Contract Agent is
     required for the execution, delivery or performance by the Purchase
     Contract Agent of the Purchase Contract Agreement and the Pledge Agreement.

     (l) The Underwriters shall have received, on each of the date hereof and on
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from
Deloitte & Touche, independent chartered accountants, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statement and certain financial
information of Ugland Nordic Shipping ASA.

     (m) The Underwriters shall have received, on each of the date hereof and on
the Closing Date, a letter dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from Ernst
& Young, independent chartered accountants, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statement and certain financial
information contained in the Registration Statement and the Prospectus.

     (n) The Securities shall have been approved for listing, subject only to
official notice of issuance, on the New York Stock Exchange.

     (o) The "lock-up" agreements, each substantially in the form of Exhibit A
hereto, between you and certain executive officers, directors of the Company and
Resolute Investments Inc. relating to sales and certain other dispositions of
shares of Securities, Purchase Contracts, Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in full
force and effect on the Closing Date.

     (p) The Company shall have furnished or caused to be furnished to you such
further certificates and documents as you shall have reasonably requested.

     The several obligations of the Underwriters to purchase Option Securities
hereunder are subject to the delivery to the Underwriters on the Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Option
Securities and other matters related to the issuance of the Option Securities.

                                       24
<PAGE>

7.   Covenants of the Company. In further consideration of the agreements of the
Underwriters herein contained, the Company covenants with each Underwriter as
follows:

     (a) To furnish to you, without charge, copies of the Registration Statement
as originally filed with the Commission and of each amendment thereto (including
financial statements, all exhibits thereto and documents incorporated therein by
reference and exhibits thereto) and for delivery to each other Underwriter a
conformed copy of the Registration Statement (without exhibits thereto but
including documents incorporated therein by reference) and to furnish to you in
New York City and to each Underwriter and dealer, without charge, prior to 10:00
A.M. New York City time on the business day next succeeding the date of this
Agreement and from time to time as expeditiously as possible during the period
mentioned in Section 7(c) below, as many copies of the Prospectus, any documents
incorporated therein by reference and exhibits thereto, and any supplements and
amendments thereto or to the Registration Statement as originally filed and of
each amendment thereto, as you may reasonably request. The Company consents to
the use of the Prospectus (and of any amendment or supplement thereto) in
accordance with the provisions of the Securities Act and with the securities or
Blue Sky laws of the jurisdictions in which the Securities are offered by the
several Underwriters and by all dealers to whom Securities may be sold, in
connection with the offering and sale of the Securities.

     (b) (i) Before amending or supplementing the Registration Statement or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus required
to be filed pursuant to such Rule, and (ii) during the period mentioned in
Section 6(c) below not to file any information, documents or reports pursuant to
the Exchange Act that upon filing becomes a document incorporated by reference
in the Registration Statement, without delivering a copy of such information,
documents or reports to you prior to or concurrently with such filing.

     (c) If, during such period after execution and delivery of this Agreement
as in the opinion of counsel for the Underwriters a prospectus is required by
law to be delivered in connection with sales by an Underwriter or dealer, any
event shall occur or condition exist as a result of which it is necessary to
amend or supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a purchaser,
not misleading, or if, in the opinion of counsel for the Underwriters, it is
necessary to amend or supplement the Prospectus (or to file under the Exchange
Act any document which, upon filing, becomes a document incorporated therein by
reference) to comply with applicable law, forthwith to prepare and, subject to
the provisions of Section 6(b) above, file with the Commission and furnish, at
its own expense, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Company) to which Securities may have been
sold by you on behalf of the Underwriters and to any other dealers upon request,
either amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in the light of the
circumstances when the Prospectus is delivered to a purchaser, be misleading or
so that the Prospectus, as amended or supplemented, will comply with law.

                                       25
<PAGE>

     (d) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.

     (e) Not to be or become, at any time prior to the expiration of three years
after the Closing Date, an open-end investment company, unit investment trust,
closed-end investment company or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company Act.

     (f) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Prospectus under the
caption "Use of Proceeds".

     (g) The Company will not take, and will cause each subsidiary not to take,
directly or indirectly, any action that will result in a violation by any U.S.
person participating in the offering of the Sanctions Laws and Regulations with
respect to the sale of the Securities hereunder. Further, the Company will not
use, and will cause each subsidiary not to use, the proceeds from the sale of
the Securities, directly or indirectly, for any purpose or activity that would
cause the Underwriters or any purchaser of the Securities to be in violation of
the Sanctions Laws and Regulations or any agent or "Specially Designated
National" of any country the subject of the Sanctions Laws and Regulations, or
any person or entity of any country the subject of the Sanctions Laws and
Regulations.

     (h) To make generally available to its securityholders as soon as
practicable, but in any event not later than fifteen months after the effective
date of the Registration Statement (as defined in Rule 158(c)), an earnings
statement of the Company and its subsidiaries (which need not be audited)
complying with Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder (including at the option of the Company Rule 158).

     (i) To endeavor to list any Common Shares underlying the Securities on the
New York Stock Exchange.

     (j) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company (including
local and special counsel) and accountants in connection with the registration
and delivery of the Securities under the Securities Act and all other fees or
expenses in connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments and
supplements to any of the foregoing, including all printing or reproduction
costs associated therewith, and the mailing and delivering of copies thereof to
the Underwriters and dealers, (ii) the costs of producing this Agreement, the
Indenture, the PEPS Agreements, the Remarketing Agreement and any Blue Sky
memorandum and legal investment surveys, closing documents and any other
documents in connection with the offer, purchase, sale and delivery of the
Securities, (iii) all expenses in connection with the qualification of the
Securities for the offering and sale under state securities

                                       26
<PAGE>

laws and all as provided in Section 7(d) hereof, including filing fees and the
fees and disbursements of counsel for the Underwriters in connection with the
Blue Sky memoranda and legal investment surveys and such qualification, (iv) any
filing fees and disbursements of counsel to the Underwriters incurred in
connection with the review and qualification of the offering of the Securities
by the National Association of Securities Dealers, Inc., (v) any fees charged by
rating agencies for the rating of the Securities, (vi) all costs and expenses
incident to the listing of the Securities and the Common Shares underlying the
Securities on any national securities exchange, (vii) all fees and expenses in
connection with the preparation and filing of the registration statement on Form
8-A relating to the Securities and all costs and expenses incident to the
listing the Securities on the New York Stock Exchange, (viii) the cost of
producing certificates representing the Securities, (ix) the fees and expenses
of the Trustee, Purchase Contract Agent, Collateral Agent and any transfer
agent, registrar or depositary and the fees and disbursements of counsel for the
Trustee, Purchase Contract Agent and Collateral Agent in connection with the
Securities, (x) all taxes arising as a result of the issuance, sale and delivery
of the Securities by the Underwriters in the manner contemplated by this
Agreement, including in any case, any Marshall Islands income, capital gains,
withholding, transfer or other tax asserted against the Underwriters by reason
of the purchase and sale of the Securities pursuant to this Agreement, (xi) the
costs and expenses of the Company relating to investor presentations on any
"road show" undertaken in connection with the marketing of the offering of the
Securities, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, and (xii) all
other costs and expenses incident to the performance of the obligations of the
Company hereunder for which provision is not otherwise made in this Section. It
is understood, however, that except as provided in this Section, Section 8 and
the last paragraph of Section 10, the Underwriters will pay all of their costs
and expenses, including fees and disbursements of their counsel, stock transfer
taxes payable on resale of any of the Securities by them and any advertising
expenses connected with any offers they may make.

     8. Indemnity and Contribution. (a) The Company agrees to indemnify and hold
harmless each Underwriter and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and each affiliate of any Underwriter within the meaning of
Rule 405 under the Securities Act, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement or any amendment
thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you expressly
for use therein; provided, however that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from

                                       27
<PAGE>

whom the person asserting any such losses, claims damages or liabilities
purchased Securities, or any person controlling such Underwriter, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendment or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Securities
to such person, and if the Prospectus (as so amended or supplemented) would have
cured the defect giving rise to such losses, claims, damages or liabilities,
unless such failure is the result of noncompliance by the Company with Section
7(a) hereof.

     (b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Company to such Underwriter
but only with reference to information relating to such Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.

     (c) In case any proceeding (including any governmental investigation) shall
be instituted involving any person in respect of which indemnity may be sought
pursuant to Section 8(a) or 8(b), such person (the "indemnified party") shall
promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceeding in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated, in the case of
parties indemnified pursuant to Section 8(a), and by the Company, in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such

                                       28
<PAGE>

indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into, and (iii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.

     (d) To the extent the indemnification provided for in Section 8(a) or 8(b)
is unavailable to any indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the allocation
provided by clause 8(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 8(d)(i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other hand
in connection with the offering of the Securities shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Securities (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the Prospectus, bear to the aggregate Public Offering Price
of the Securities. The relative fault of the Company on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by the Underwriters on the other hand
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 8 are several in
proportion to the respective number of Securities they have purchased hereunder,
and not joint.

     (e) The Company and the Underwriters agree that it would not be just or
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in Section 8(d). The amount paid or payable
by an indemnified party as the result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8, no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged

                                       29
<PAGE>

untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 8 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.

     (f) The indemnity and contribution provisions contained in this Section 8
and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriter or any person controlling any Underwriter or
any affiliate of any Underwriter or by or on behalf of the Company, its officers
or directors or any person controlling the Company and (iii) acceptance of and
payment for any of the Securities.

9.   Termination. The Underwriters may terminate this Agreement by notice given
by you to the Company if after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on, or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the Nasdaq National Market, the Chicago
Board of Options Exchange, the Chicago Mercantile Exchange or the Chicago Board
of Trade, (ii) trading of any securities of the Company shall have been
suspended on any exchange or in any over-the-counter market, (iii) a material
disruption in securities settlement, payment or clearance services in the United
States or Canada shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal, New York State or Canadian
authorities or (v) there shall have occurred any outbreak or escalation of
hostilities or declaration of war or any change in financial markets or any
calamity or crisis that, in your judgment, is material and adverse and which,
singly or together with any other such event specified in clause (v), makes it,
in your judgment, impracticable or inadvisable to proceed with the offer, sale
or delivery of the Securities on the terms and in the manner contemplated in the
Prospectus.

10.  Effectiveness; Defaulting Underwriters.  This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.

     If, on the Closing Date or the Option Closing Date, as the case may be, any
one or more of the Underwriters shall fail or refuse to purchase Securities that
it has or they have agreed to purchase hereunder on such date, and the aggregate
number of Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
number of the Securities to be purchased on such date, the other Underwriters
shall be obligated severally in the proportions that the number of Firm
Securities set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Securities set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase on such date; provided that in no event shall
the number of Securities that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 10 by an amount in excess
of one-ninth of such number of Securities without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Securities and the

                                       30
<PAGE>

aggregate number of Firm Securities with respect to which such default occurs is
more than one-tenth of the aggregate number of Firm Securities to be purchased,
and arrangements satisfactory to you and the Company for the purchase of such
Firm Securities are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or the Company. In any such case either you or the Company shall have the right
to postpone the Closing Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Registration Statement and in
the Prospectus or in any other documents or arrangements may be effected. If, on
the Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Option Securities and the aggregate number of Option Securities with
respect to which such default occurs is more than one-tenth of the aggregate
number of Option Securities to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Option Securities or (ii) purchase not less than the number of Option Securities
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.

     If this Agreement shall be terminated by the Underwriters, or any of them,
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform their obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.

11.  Counterparts.  This Agreement may be signed in two or more counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

12.  Applicable Law.  This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.

13.  Judicial Proceedings. (a) The Company irrevocably (i) agrees that any legal
suit, action or proceeding against the Company brought by the Underwriters or by
any person who controls the Underwriters arising out of or based upon this
Agreement or the transactions contemplated hereby may be instituted in any New
York court, (ii) waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
proceeding in any New York court and (iii) submits to the exclusive jurisdiction
of such courts in any such suit, action or proceeding. The Company has appointed
Watson, Farley & Williams, New York, New York, as its authorized agent (the
"Authorized Agent") upon whom process may be served in any such action arising
out of or based on this Agreement or the transactions contemplated hereby which
may be instituted in any New York Court by the Underwriters or by any person who
controls the Underwriters, expressly consents to the jurisdiction of any such
court in respect of any such action, and waives any other requirements of or
objections to personal jurisdiction with respect thereto. Such appointment shall
be irrevocable. The Company represents and warrants that the Authorized Agent
has agreed to act

                                       31
<PAGE>

as such agent for service of process and agrees to take any and all action,
including the filing of any and all documents and instruments, that may be
necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Company shall be deemed, in every respect, effective service of process
upon the Company.

     (b) If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due hereunder into any currency other than United States
dollars, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Underwriters could purchase United
States dollars with such other currency in the City of New York on the business
day proceeding that on which final judgment is given. The obligations of the
Company in respect of any sum due from it to the Underwriters shall,
notwithstanding any judgment in a currency other than United States dollars, not
be discharged until the first business day, following receipt by the
Underwriters of any sum adjudged to be so due in such other currency, on which
(and only to the extent that) the Underwriters may in accordance with normal
banking procedures purchase United States dollars with such other currency; if
the United States dollars so purchased are less than the sum originally due to
the Underwriters hereunder, the Company agrees, as a separate obligation and
notwithstanding any such judgment, that the party responsible for such judgment
shall indemnify the Underwriters against such loss. If the United States dollars
so purchased are greater than the sum originally due to the Underwriters
hereunder, the Underwriters agree to pay to the Company an amount equal to the
excess of the dollars so purchased over the sum originally due to the
Underwriters hereunder.

14.  Notice. Except as otherwise provided herein, notice given pursuant to any
provision of this Agreement shall be delivered or sent by mail, telex or
facsimile (i) if to the Company, at the address of the Company set forth in the
Prospectus; or (ii) if to you, care of Morgan Stanley & Co. Incorporated, 1585
Broadway, New York, New York 10036, Attention: Manager, Corporate Finance
Division.

15.  Headings. The headings of the sections of this Agreement have been inserted
for convenience of reference only and shall not be deemed a part of this
Agreement.

                                       32
<PAGE>

                                       Very truly yours,

                                       TEEKAY SHIPPING CORPORATION

                                       By:
                                           -----------------------------------
                                           Name:
                                           Title:

Accepted as of the date hereof.

MORGAN STANLEY & CO. INCORPORATED

By:
   ----------------------------------------
   Name:
   Title:

SALOMON SMITH BARNEY INC.

By:
   ----------------------------------------
   Name:
   Title:

<PAGE>

                                   SCHEDULE I

                                                                Number of
                                                             Firm Securities
                        Underwriter                          To Be Purchased
                        ----------                           ---------------
Morgan Stanley & Co. Incorporated......................
Salomon Smith Barney Inc...............................
                           Total                                5,000,000

                                     Sch. I

<PAGE>

                                   SCHEDULE II

Title of Securities:

Registration Statement:  Registration Statement No. 333-102594

Number of Firm Securities: 5,000,000 PEPS(SM) Units

Number of Option Securities: 750,000 PEPS(SM) Units

Price to Public: $25.00 per Security

Purchase Price by Underwriters: $[    ] per Security

Interest Rate on Notes: [   ]%

Specified funds for payment of purchase price: Federal (same day) funds

Reference Price: $[    ]

Threshold Appreciation Price: $[    ]

Closing Price of Teekay Shipping Corporation Common Stock on
February 10, 2003:  $38.52

Payment Dates: February 16, May 16, August 16, and November 16, commencing
May 16, 2003

Purchase Contract Settlement Date: February 16, 2006

Maturity of Note: May 18, 2006

Stock Exchange Listing:  New York Stock Exchange

Closing Date: February 18, 2003

Closing Location: Menlo Park, California

Names and addresses of Underwriters:

         Morgan Stanley & Co. Incorporated
         1585 Broadway
         New York, New York 10036

         Salomon Smith Barney Inc.
         388 Greenwich Street
         24th Floor
         New York, New York  10013

                                    Sch. II
<PAGE>

                                  SCHEDULE III

              Encumbrances on shares of the Company's Subsidiaries

          1. Shares of the following of the Company's subsidiaries are
encumbered pursuant to the Pledge Agreement and Irrevocable Proxy dated January
29, 1996, relating to Teekay Shipping Corporation's $225 Million 8.32% First
Preferred Ship Mortgage Notes Due 2008.

         Poul Spirit LLC
         Torben Spirit LLC
         Senang Spirit LLC
         Mayon Spirit LLC
         Leyte Spirit LLC
         Luzon Spirit LLC
         Samar Spirit LLC

          2. Shares of the following of the Company's subsidiaries are
encumbered pursuant to the Amended and Restated Reimbursement Agreement, dated
April 16, 1998, between Barrington (Australia) Pty Limited, Palmerston
(Australia) Pty Limited, VSSI Australia Limited, VSSI Transport Inc., Alliance
Chartering Pty Limited and Nedship Bank (America) N. V.

         Dampier Spirit LLC
         Avalon Spirit LLC

          3. Shares of the following of the Company's subsidiaries are
encumbered pursuant to the Agreement for a U.S. $200,000,000 Reducing Revolving
Credit Facility, dated January 26, 1998, to be made available to certain
wholly-owned subsidiaries of Teekay Shipping Corporation, by Den Norske Bank
ASA, Nordea Bank, and The Bank of Nova Scotia.

         Musashi Spirit LLC
         Onozo Spirit LLC
         Palmstar Cherry LLC
         Palmstar Lotus LLC
         Palmstar Poppy LLC
         Teekay Spirit LLC
         Vancouver Spirit LLC
         Victoria Spirit LLC

                                    Sch. III

<PAGE>

                                 SCHEDULE IV(a)

  Company Subsidiaries Incorporated in the Republic of Liberia With Operations

Teekay Norge Limited

                                 SCHEDULE IV(b)

 Company Subsidiaries Incorporated in the Republic of Liberia Without Operations

Willow Ltd.
Cranberry Corporation
Jasmin Holdings Ltd.

                                    Sch. IV
<PAGE>

                                  SCHEDULE V(a)

        Company Subsidiaries Incorporated in The Bahamas With Operations

         Teekay Shipping Limited

                                  SCHEDULE V(b)

       Company Subsidiaries Incorporated in The Bahamas Without Operations

         Seagull International Ltd.

                                     Sch. V
<PAGE>

                                 SCHEDULE VI(a)

 Company Subsidiaries Incorporated in The Republic of The Marshall Islands With
                                   Operations

Alliance Spirit LLC                           Palmstar Orchid LLC
Avalon Spirit LLC                             Palmstar Poppy LLC
Bahamas Spirit LLC                            Palmstar Rose LLC
Cook Spirit LLC                               Palmstar Thistle LLC
Cork Spirit LLC                               PetroAtlantic LLC
Dampier Spirit LLC                            PetroNordic LLC
Donegal Spirit LLC                            Poul Spirit LLC
DSME Hull No. 5248 LLC                        Samar Spirit LLC
DSME Hull No. 5249 LLC                        Sebarok Spirit LLC
Galway Spirit LLC                             Seletar Spirit LLC
Great West Hull No. 1465 LLC                  Semakau Spirit LLC
Great West Hull No. 1466 LLC                  Senang Spirit LLC
Hamane Spirit LLC                             Sentosa Spirit LLC
Kanata Spirit LLC                             Seraya Spirit LLC
Kareela Spirit LLC                            Shannon Spirit LLC
Koyagi Spirit LLC                             Shilla Spirit LLC
Kyushu Spirit LLC                             Singapore Spirit LLC
Leyte Spirit LLC                              Sudong Spirit LLC
Limerick Spirit LLC                           Teekay Spirit LLC
Luzon Spirit LLC                              Teekay Chartering Limited
Magellan Spirit LLC                           Teekay Lightering Services LLC
Mayon Spirit LLC                              Teekay Nordic Holdings Inc.
Mushashi Spirit LLC                           Torben Spirit LLC
Namsan Spirit LLC                             Torres Spirit LLC
Nordic NB LLC                                 Ulsan Spirit LLC
Norsk Teekay Holdings Ltd.                    Vancouver Spirit LLC
Onozo Spirit LLC                              Victoria Spirit LLC
Pacific Spirit LLC
Palmstar Cherry LLC
Palmstar Lotus LLC

                                 SCHEDULE VI(b)

    Company Subsidiaries Incorporated in The Republic of The Marshall Islands
                               Without Operations

                                    Sch. VI
<PAGE>

                                 SCHEDULE VII(a)

           Company Subsidiaries Incorporated in Norway With Operations

Ugland Nordic Shipping AS                     KS Nordic Laurita
Ugland Nordic Investment AS                   KS Bona Fortuna
Teekay Shipping (Norway) AS                   KS Bona Freighter
Norsk Teekay AS                               KS Nordic Akarita
Nordic Akarita AS                             KS Nordic Apollo
Nordic Apollo AS
Nordic Laurita AS
Nordic Sarita Investment AS

                                 SCHEDULE VII(b)

         Company Subsidiaries Incorporated in Norway Without Operations

                                    Sch. VII
<PAGE>

                                SCHEDULE VIII(a)

          Company Subsidiaries Incorporated in Bermuda With Operations

Bona Shipholding Ltd.
Teekay Shipping Limited
Bona Shipping India Ltd.
Bona Freighter & Fortuna Ltd.

                                SCHEDULE VIII(b)

         Company Subsidiaries Incorporated in Bermuda Without Operations

                                   Sch. VIII

<PAGE>

                                 SCHEDULE IX(a)

                         Significant Navion Subsidiaries

Navion Offshore Loading AS
Navion Shipping Holding AS
Navion Shipping Operations AS

                                    Sch. IX

<PAGE>

                                    Exhibit A

                        [Form of PEPS Lock-Up Agreement]

                                February __, 2003

Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036

Salomon Smith Barney Inc.
388 Greenwich Street
24th Floor
New York, New York 10013

Dear Sirs and Mesdames:

         The undersigned understands that Morgan Stanley & Co. Incorporated
("Morgan Stanley") and Salomon Smith Barney Inc. (collectively with Morgan
Stanley, the "Underwriters") propose to enter into an Underwriting Agreement
(the "Underwriting Agreement") with Teekay Shipping Corporation, a Republic of
The Marshall Islands corporation (the "Company"), providing for the public
offering (the "Public Offering") by the Underwriters Premium Equity
Participating Security Units - PEPS (each a "Security" and collectively, the
"Securities") which require any holder of a Security to, among other things,
purchase from the Company, on a future date, shares of the Company's Common
Stock, par value $0.0001 per share (the "Common Stock").

         To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 90 days after the date of the final prospectus supplement relating to the
Public Offering (the "Prospectus Supplement"), (1) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any Securities,
Purchase Contracts or shares of Common Stock or any securities convertible into
or exercisable or exchangeable for any Securities, Purchase Contracts or shares
of Common Stock or (2) enter into any swap or other arrangement that transfers
to another, in whole or in part, any of the economic consequences of ownership
of the Securities, Purchase Contracts or shares of Common Stock, whether any
such transaction described in clause (1) or (2) above is to be settled by
delivery of Securities, Purchase Contracts or Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (a)
the sale of any Securities to the Underwriters pursuant to the Underwriting
Agreement, (b) transactions relating to shares of Securities, Purchase Contracts
or Common Stock or other securities acquired in open market transactions after
the completion of the Public Offering, or (c) dispositions of shares of Common
Stock by gift to the undersigned's immediate family members, to trusts
established for the benefit of the undersigned's immediate family members or to
charitable organizations; provided that any such person, trust or charitable
organization agrees as a condition to receiving such gifts to be bound

<PAGE>

by the terms of the foregoing sentence. In addition, the undersigned agrees
that, without the prior written consent of the Underwriters, it will not, during
the period commencing on the date hereof and ending 90 days after the date of
the Prospectus Supplement, make any demand for or exercise any right with
respect to, the registration of any Securities, Purchase Contracts or shares of
Common Stock or any security convertible into or exercisable or exchangeable for
Securities, Purchase Contracts or Common Stock. The undersigned also agrees and
consents to the entry of stop transfer instructions with the Company's transfer
agent and registrar against the transfer of the undersigned's share of
Securities, Purchase Contracts or Common Stock except in compliance with the
foregoing restrictions.

         The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this Lock-Up Agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.

         Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.

         This Lock-up Agreement will terminate and shall be of no further effect
in the event that either the Underwriting Agreement is terminated or the sale of
the Securities in the Public Offering has not occurred on or before February 28,
2003.

                                       Very truly yours,

                                       ----------------------------------------
                                       (Name)

                                       ----------------------------------------
                                       (Address)

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