BOND AGREEMENT between Teekay LNG Partners L.P. (Issuer) and Nordic Trustee ASA (Bond Trustee) on behalf of the Bondholders in the bond issue FRN Teekay LNG Partners L.P. Senior Unsecured Bond Issue 2015/2020

1 Interpretation

2 The Bonds

3 Listing

4 Registration in a Securities Depository

5 Purchase and transfer of Bonds

6 Conditions precedent

7 Representations and Warranties

8 Status of the Bonds and security

9 Interest

10 Maturity of the Bonds and Change of Control

11 Payments

12 Issuer’s acquisition of Bonds

13 Covenants

14 Fees and expenses

15 Events of Default

16 Bondholders’ meeting

17 The Bond Trustee

18 Miscellaneous

(1)

Teekay LNG Partners L.P. (a limited partnership organized in the ▇▇▇▇▇▇▇▇ Islands with Company No. 950008), as issuer (the “Issuer”), and

(2)

Nordic Trustee ASA (a company incorporated in Norway with Company No. 963 342 624), as bond trustee (the “Bond Trustee”).

1

Interpretation

1.1

Definitions

A.

Where all management powers over the business and affairs of the Issuer are vested exclusively in its general partner:

(i)

The General Partner ceases to be the general partner of the Issuer; or

(ii)

Teekay Corporation ceases to own, directly or indirectly, a minimum of 50 percent (50%) of the voting rights in the General Partner;

or

B.

Where all management powers over the business and affairs of the Issuer become vested exclusively in a board of directors of the Issuer, and Teekay Corporation ceases to own, directly or indirectly, a minimum of 50 percent (50%) of the voting rights to elect the members of that board of directors or the voting rights to elect a minimum of 50 percent (50%) of the board of directors.

(a)

moneys borrowed, including acceptance credit;

(b)

any bond, note, debenture, loan stock or other similar instrument;

(c)

the amount of any liability in respect of any lease, hire purchase contract which would, in accordance with GAAP, be treated as a finance or capital lease (excluding any amounts applicable to leases to the extent that such lease obligations are fully secured by a security deposit which is held on the balance sheet under “restricted cash”);

(d)

receivables sold or discounted (other than any receivables sold on a non-recourse basis);

(e)

any sale and lease-back transaction, or similar transaction which is treated as indebtedness under GAAP;

(f)

the acquisition cost of any asset to the extent payable after its acquisition or possession by the party liable where the deferred payment is arranged primarily as a method of raising finance or financing the acquisition of that asset;

(g)

any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price, including without limitation currency or interest rate swaps, caps or collar transactions (and, when calculating the value of the transaction, only the ▇▇▇▇-to-market value of the applicable derivative shall be taken into account);

(h)

any amounts raised under any other transactions having the commercial effect of a borrowing or raising of money, whether recorded in the balance sheet or not (including any forward sale of purchase agreement);

(i)

any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institutions; and

(j)

any guarantee, indemnity or similar assurance against financial loss of any person in respect of any of the items referred to in (a) through (i) above.

(i)

any Subsidiary whose total consolidated assets represent at least 10 % of the total consolidated assets of the Group, or

(ii)

any Subsidiary whose total consolidated revenues represent at least 10 % of the total consolidated net sales of the Group.

(i)

any debit balance carried forward on the Issuer’s consolidated profit and loss account;

(ii)

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

(iii)

any amount attributable to minority interests in Subsidiaries on the Issuer’s consolidated balance sheet.

(i)

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

(ii)

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

1.2

Construction

(a)

headings are for ease of reference only;

(b)

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

(c)

references to Clauses are references to the Clauses of this Bond Agreement;

(d)

references to a time is a reference to Oslo time unless otherwise stated herein;

(e)

references to a provision of law is a reference to that provision as it may be amended or re-enacted, and to any regulations made by the appropriate authority pursuant to such law, including any determinations, rulings, judgments and other binding decisions relating to such provision or regulation;

(f)

references to “control” means the power to appoint a majority of the board of directors of the entity or to direct the management and policies of an entity, whether through the ownership of voting capital, by contract or otherwise; and

(h)

references to a “person” shall include any individual, firm, partnership, joint venture, company, corporation, trust, fund, body corporate, unincorporated body of persons, or any state or any agency of a state or association (whether or not having separate legal personality).

2

The Bonds

2.1

Binding nature of the Bond Agreement

2.1.1

The Bondholders are, through their subscription, purchase or other transfer of Bonds bound by the terms of the Bond Agreement and other Finance Documents, and grant authority to the Bond Trustee to finalize and execute the Bond Agreement on the Bondholders behalf as set out in the subscription documents, term sheet, sales documents or in any other way, and all Bond transfers are subject to the terms of this Bond Agreement and all Bond transferees are, in taking transfer of Bonds, deemed to have accepted the terms of the Bond Agreement and the other Finance Documents and will automatically become parties to the Bond Agreement upon the completed transfer having been registered, without any further action required to be taken or formalities to be complied with, see also Clause 18.1.

2.1.2

The Bond Agreement is available to anyone and may be obtained from the Bond Trustee or the Issuer. The Issuer shall ensure that the Bond Agreement is available to the general public throughout the entire term of the Bonds.

2.2

The Bonds

2.2.1

The Issuer has resolved to issue a series of Bonds in the amount of NOK 1,000,000,000 (Norwegian kroner one billion).

2.3

Purpose and utilization

2.3.1

The net proceeds of the Bonds shall be employed for general partnership purposes including funding of newbuilding installments.

3

Listing

3.1

The Issuer shall apply for listing of the Bonds on Oslo Børs.

3.2

If the Bonds are listed, the Issuer shall ensure that the Bonds remain listed until they have been discharged in full.

4

Registration in a Securities Depository

4.1

The Bond Issue and the Bonds shall prior to disbursement be registered in the Securities Depository according to the Norwegian Securities Depository Act (Act 2002/64) and the terms and conditions of the Securities Depository.

4.2

The Issuer shall promptly arrange for notification to the Securities Depository of any changes in the terms and conditions of this Bond Agreement. The Bond Trustee shall receive a copy of the notification.

4.3

The Issuer is responsible for the implementation of correct registration in the Securities Depository. The registration may be executed by an agent for the Issuer provided that the agent is qualified according to relevant regulations.

4.4

The Bonds have not been registered under the US Securities Act, and the Issuer is under no obligation to arrange for registration of the Bonds under the US Securities Act.

5

Purchase and transfer of Bonds

5.1

Subject to the restrictions set forth in this Clause 5, the Bonds are freely transferable and may be pledged.

5.2

Bondholders may be subject to purchase or transfer restrictions with regard to the Bonds, as applicable from time to time under local laws to which a Bondholder may be subject (due e.g. to its nationality, its residency, its registered address, its place(s) for doing business). Each bondholder must ensure compliance with local laws and regulations applicable at own cost and expense. Without limiting the generality of the foregoing:

5.3

Notwithstanding the above, a Bondholder which has purchased the Bonds in contradiction to mandatory restrictions applicable may nevertheless utilize its voting rights under this Bond Agreement.

6

Conditions Precedent

6.1

Disbursement of the net proceeds of the Bonds to the Issuer will be subject to the Bond Trustee having received the following documents, in form and substance satisfactory to it, at least one Business Day prior to the Issue Date:

(a)

this Bond Agreement duly executed by all parties thereto;

(b)

certified copies of all necessary corporate resolutions of the Issuer to issue the Bonds and execute the Finance Documents to which it is a party;

(c)

a power of attorney from the Issuer to relevant individuals for its execution of the relevant Finance Documents, or extracts from the relevant register or similar documentation evidencing the individuals authorized to sign on behalf of the Issuer;

(d)

certified copies of the Certificate of Limited Partnership for the Issuer, evidencing that it is validly existing, and the partnership agreement for the Issuer;

(e)

the latest Financial Statements for the Issuer, and the Issuer’s latest Quarterly Financial Report;

(f)

confirmation that the requirements set forth in Chapter 7 of the Norwegian Securities Trading Act (implementing the EU prospectus directive (2003/71 EC) concerning prospectuses have been fulfilled or do not apply to the Bond Issue;

(g)

to the extent necessary, any public authorisations required for the Bond Issue;

(h)

confirmation from the Paying Agent that the Bonds have been registered in the Securities Depository;

(i)

written confirmation in accordance with Clause 7.3 (if required);

(j)

the agreement set forth in Clause 14.2, duly executed;

(k)

documentation on the granting of authority to the Bond Trustee as set out in Clause 2.1 and copies of any written documentation made public by the Issuer or the Manager in connection with the Bond Issue; and

(l)

legal opinions in a form and content acceptable to the Bond Trustee from local counsel acceptable to the Bond Trustee, confirming inter alia (i) that the Issuer is legally organised and validly existing under its jurisdiction of organisation, (ii) the valid execution by the Issuer of the Finance Documents and the enforceability of the Finance Documents, (iii) that the Issuer has full partnership power and capacity to enter into and perform the duties under the Finance Documents, and (iv) that there are no other consents, approvals, authorisations or orders required by the Issuer from any governmental or other regulatory agencies in the jurisdictions of organisation of the Issuer in connection with the issue and offering of the Bonds and the performance by Issuer of its obligations under the Finance Documents.

6.2

The Bond Trustee may, in its reasonable opinion, waive the deadline or requirements for documentation as set forth in Clause 6.1.

6.3

Disbursement of the net proceeds from the Bonds is subject to the Bond Trustee’s written notice to the Issuer, the Manager and the Paying Agent that the documents have been received and that the required conditions precedent are fulfilled or have been waived.

6.4

On the Issue Date, subject to receipt of confirmation from the Bond Trustee pursuant to Clause 6.3, the Manager shall make the net proceeds from the Bond Issue available to the Issuer.

7

Representations and Warranties

7.1

The Issuer represents and warrants to the Bond Trustee (on behalf of the Bondholders) that:

(i)

the Bondholder has some connection with the Taxing jurisdiction other than merely holding the Bonds or receiving principal or interest payments on the Bonds (such as citizenship, nationality, residence, domicile, or existence of a business, a permanent establishment, a dependent agent, a place of business or a place of management present or deemed present within the Taxing jurisdiction);

(ii)

any Tax imposed on, or measured by, net income.

7.2

The representations and warranties set out in Clause 7.1 shall apply for the Issuer and are made on the execution date of this Bond Agreement, and shall be deemed to be repeated on the Issue Date.

7.3

The Bond Trustee may prior to disbursement require a written statement from the Issuer confirming compliance with Clause 7.1.

7.4

In the event of misrepresentation, the Issuer shall indemnify the Bond Trustee for any economic losses suffered, both prior to the disbursement of the Bonds, and during the term of the Bonds, as a result of its reliance on the representations and warranties provided by the Issuer herein.

8

Status of the Bonds and security

8.1

The Bonds shall be senior unsecured debt of the Issuer. The Bonds shall rank at least pari passu with all other senior unsecured obligations of the Issuer (save for such claims which are preferred by bankruptcy, insolvency, liquidation or other similar laws of general application and for other obligations that are mandatorily preferred by law) and shall rank ahead of subordinated debt.

8.2

The Bonds are unsecured.

9

Interest

9.1

The Issuer shall pay interest on the aggregate outstanding principal amount of the Bonds from, and including, the Issue Date at the Bond Reference Rate plus the Margin (together the “Floating Rate”).

9.2

Interest payments shall be made in arrears on the Interest Payment Dates each year; the first Interest Payment Date falls in August 2015.

9.3

The relevant interest payable amount shall be calculated based on a period from, and including, one Interest Payment Date to, but excluding, the next following applicable Interest Payment Date.

9.4

The day count fraction (“Floating Rate Day Count Fraction”) in respect of the calculation of the payable interest amount shall be “Actual/360”, which refers to the actual number of days in the calculation period for which interest is payable divided by 360.

9.5

The applicable Floating Rate on the Bonds is set/reset on each Interest Payment Date by the Bond Trustee commencing on the Interest Payment Date at the beginning of the relevant calculation period, based on the Bond Reference Rate two Business Days preceding that Interest Payment Date.

9.6

The payable interest amount per Bond for a relevant calculation period shall be calculated as follows:

            Interest

Face

Floating

Floating Rate

            Amount

Value

Rate

Day Count Fraction

10

Maturity of the Bonds and Change of Control

10.1

Maturity

10.2

Change of control

10.2.1

Upon the occurrence of a Change of Control Event each Bondholder shall have a right of pre-payment (a “Put Option”) of its Bonds at a price of 100 % of par plus accrued and unpaid interest.

10.2.2

The Put Option must be exercised within two months after the Issuer has given notification to the Bond Trustee and the Bondholders of a Change of Control Event. Such notification shall be given as soon as possible after a Change of Control Event has taken place.

10.2.3

On the settlement date of the Put Option, the Issuer shall pay to each of the Bondholders holding Bonds to be pre-paid, the principal amount of each such Bond and any unpaid interest accrued up to (but not including) the settlement date.

11

Payments

11.1

Covenant to pay

11.1.1

The Issuer will on any Payment Date (or any other due date pursuant to any Finance Document) unconditionally pay to or to the order of the Bond Trustee all amounts due under this Bond Agreement or any other Finance Document.

11.1.2

The covenant contained in Clause 11.1.1 shall be for the benefit of the Bond Trustee and the Bondholders.

11.2

Payment mechanics

11.2.1

If no specific order is made by the Bond Trustee under Clause 11.1.1, the Issuer shall pay all amounts due to the Bondholders under this Bond Agreement or any other Finance Document by crediting the bank account nominated by each Bondholder in connection with its securities account in the Securities Depository.

11.2.2

Payment shall be deemed to have been made once the amount has been credited to the bank which holds the bank account nominated by the Bondholder in question, but if the paying bank and the receiving bank are the same, payment shall be deemed to have been made once the amount has been credited to the bank account nominated by the Bondholder in question, see however Clause 11.3.

11.2.3

In case of irregular payments, the Bond Trustee may instruct the Issuer, the Bondholders or others of other payment mechanisms than described in Clause 11.2.1 or 11.2.2 above. The Bond Trustee may also obtain payment information regarding Bondholders’ accounts from the Securities Depository or Account Managers.

11.2.4

Subject to Clause 11.3, payment by the Issuer in accordance with this Clause 11.2 shall constitute good discharge of its obligations under Clause 11.1.1.

11.3

Currency

11.3.1

If the Bonds are denominated in currencies other than NOK, each Bondholder must provide the Paying Agent (either directly or through its Account Manager) with specific payment instructions, including foreign exchange bank account details. Depending on the currency exchange settlement agreements between the Bondholders’ bank and the Paying Agent, cash settlement may be delayed, in which case no default interest or other penalty shall accrue for the benefit of the Bondholders.

11.3.2

Except as otherwise expressly provided, all amounts payable under this Bond Agreement and any other Finance Document shall be payable in the same currency as the Bonds are denominated in. If, however, the Bondholder has not given instruction as set out in Clause 11.3.1, within 5 Business Days prior to a Payment Date, the cash settlement will be exchanged into NOK and credited to the NOK bank account registered with the Bondholders account in the Securities Depository.

11.3.3

Amounts payable in respect of costs, expenses, Taxes and other liabilities shall be payable in the currency in which they are incurred.

11.4

Set-off and counterclaims

11.4.1

The Issuer may apply or perform any counterclaims or set-off against any payment obligations pursuant to this Bond Agreement or any other Finance Document.

11.4

Interest in the event of late payment

11.5.1

In the event that payment of interest or principal is not made on the relevant Payment Date, the unpaid amount shall bear interest from the Payment Date at an interest rate equivalent to the interest rate according to Clause 9 plus 5.00 percentage points.

11.5.2

The interest charged under this Clause 11.5 shall be added to the defaulted amount on each respective Interest Payment Date relating thereto until the defaulted amount has been repaid in full.

11.5.3

The unpaid amounts shall bear interest as stated above until payment is made, whether or not the Bonds are declared to be in default pursuant to Clause 15.1 (a), cf. Clauses 15.2 - 15.4.

11.6

Partial payments

11.6.1

If the Bond Trustee or the Paying Agent receives a payment that is insufficient to discharge all the amounts then due and payable under the Finance Documents, that payment shall be applied in the following order:

(a)

first, in or towards payment of any unpaid fees, costs and expenses of the Bond Trustee under the Finance Documents;

(b)

secondly, in or towards payment of any accrued interest due but unpaid under the Bond Agreement, pro rata and without any preference or priority of any kind; and

(c)

thirdly, in or towards payment of any principal due but unpaid under the Bond Agreement, pro rata and without any preference or priority of any kind.

12

Issuer’s acquisition of Bonds

12.1

The Issuer has the right to acquire and own Bonds (Issuer’s Bonds). The Issuer’s Bonds may at the Issuer’s discretion be retained by the Issuer, sold or discharged.

13

Covenants

13.1

General

13.1.1

The Issuer has undertaken the covenants in this Clause 13 to the Bond Trustee (on behalf of the Bondholders), as further stated below.

13.1.2

Subject to Section 18.2, the covenants in this Clause 13 shall remain in force from the date of this Bond Agreement and until such time that no amounts are outstanding under this Bond Agreement and any other Finance Document, unless the Bond Trustee (or Bondholders by action at a Bondholders Meeting, as the case may be), has agreed in writing to waive any covenant, and then only to the extent of such waiver, and on the terms and conditions set forth in such waiver.

13.2

Information Covenants

13.2.1

The Issuer shall

(a)

without being requested to do so, immediately inform the Bond Trustee of any Default or Event of Default as well as of any circumstances which the Issuer understands would reasonably be expected to lead to an Event of Default;

(b)

without being requested to do so, inform the Bond Trustee of any other event which could reasonably be expected to have a Material Adverse Effect;

(c)

without being requested to do so, inform the Bond Trustee if the Issuer intends to sell or dispose of all or a substantial part of its assets or operations, or change the nature of its business;

(d)

without being requested to do so, produce Financial Statements annually and Quarterly Financial Reports quarterly and make them available on its website in the English language as soon as they become available, and not later than 120 days after the end of the financial year and 60 days after the end of the relevant quarter, in each case subject to any exemption, waiver or extension granted by the Exchange or as permitted by any amendment to the Exchange listing rules;

(e)

at the request of the Bond Trustee, report the balance of the Issuer’s Bonds;

(f)

without being requested to do so, send a copy to the Bond Trustee of its notices to the Exchange (if listed) which are of relevance for the Issuer’s liabilities pursuant to this Bond Agreement;

(g)

without being requested to do so, inform the Bond Trustee of changes in the registration of the Bonds in the Securities Depository; and

(h)

within a reasonable time, provide such information about the Issuer’s financial condition as the Bond Trustee may reasonably request.

13.2.2

The Issuer shall at the request of the Bond Trustee provide the documents and information necessary to maintain the listing and quotation of the Bonds on the Exchange (if listed) and to otherwise enable the Bond Trustee to carry out its rights and duties pursuant to this Bond Agreement and the other Finance Documents, as well as applicable laws and regulations.

13.2.3

The Issuer shall in connection with the issue of its Financial Statements and Quarterly Reports under Clause 13.2.1(d), confirm to the Bond Trustee in writing the Issuer’s compliance with the covenants in Clause 13. Such confirmation shall be undertaken in a compliance certificate, substantially in the format set out in Attachment 1 hereto, signed by the Chief Executive Officer or Chief Financial Officer of the Issuer. In the event of non-compliance, the compliance certificate shall describe the non-compliance, the reasons therefore as well as the steps which the Issuer has taken and will take in order to rectify the non-compliance.

13.3

General Covenants

(i)

The Issuer shall not, and shall ensure that no Group Companies shall cease to carry out the general nature or scope of its business, if such cessation would have a Material Adverse Effect.

(ii)

The Issuer shall procure that no material change is made to the general nature or scope of the business of the Group from that carried on at the date of this Bond Agreement, or as contemplated by this Bond Agreement.

(iii)

The General Partner shall at all times during the tenor of the Bonds maintain its interest as a general partner of the Issuer, unless all management powers over the business and affairs of the Issuer become vested in a board of directors of the Issuer.

13.4

Corporate and operational matters

(i)

material litigations, arbitrations or administrative proceedings which have been started by or against any Group Company; and

(ii)

other events which have occurred which have had or would reasonably be expected to have a Material Adverse Effect, as the Bond Trustee may reasonably request.

13.5

Financial Covenants and listing

14

Fees and expenses

14.1

The Issuer shall cover all documented costs and expenses incurred by it or the Bond Trustee in connection with this Bond Agreement and the fulfilment of its obligations under this Bond Agreement or any other Finance Document, including in connection with the negotiation, preparation, execution and enforcement of this Bond Agreement and the other Finance Documents and any registration or notifications relating thereto (including any stamp duty), the listing of the Bonds on an Exchange (if applicable), and the registration and administration of the Bonds in the Securities Depository. The Bond Trustee may withhold funds received from the Issuer or any other person to set-off and cover any such costs and expenses.

14.2

The fees, costs and expenses payable to the Bond Trustee shall be paid by the Issuer and are set out in a separate agreement between the Issuer and the Bond Trustee.

14.3

Fees, costs and expenses payable to the Bond Trustee which, due to the Issuer’s insolvency or similar circumstances, are not reimbursed in any other way may be covered by making an equivalent reduction in the proceeds to the Bondholders hereunder of any costs and expenses incurred by the Bond Trustee in connection with the restructuring or default of the Bond Issue and the enforcement of any Finance Document.

14.4

Any public fees levied on the trade of Bonds in the secondary market shall be paid by the Bondholders, unless otherwise provided by law or regulation, and the Issuer is not responsible for reimbursing any such fees.

14.5

The Issuer is responsible for withholding any withholding tax imposed by applicable law on any payments to the Bondholders.

14.6

If the Issuer is required by law to withhold any withholding tax from any payment under any Finance Document:

(a)

the amount of the payment due from the Issuer shall be increased to such amount which is necessary to ensure that the Bondholders receive a net amount which is (after making the required withholding) equal to the payment which would have been due if no withholding had been required; and

(b)

the Issuer shall at the request of the Bond Trustee deliver to the Bond Trustee evidence that the required tax reduction or withholding has been made.

14.7

If any withholding tax is imposed due to subsequent changes in applicable law after the date of this Bond Agreement, the Issuer shall have the right to call all but not some of the Bonds at par value plus accrued interest. Such call shall be notified by the Issuer in writing to the Bond Trustee and the Bondholders at least thirty - 30 - Business Days prior to the settlement date of the call.

15

Events of Default

15.1

Subject to Clause 15.2 or 15.3, the Bonds may be declared by the Bond Trustee to be in default upon occurrence of any of the following events (each of which shall be referred to as an “Event of Default”) if:

(i)

any Financial Indebtedness is not paid when due and after giving effect to any applicable grace period,

(ii)

any Financial Indebtedness is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described),

(iii)

any commitment for any Financial Indebtedness is cancelled or suspended by a creditor as a result of an event of default (however described) and such cancellation and suspension would have a Material Adverse Effect, or

(iv)

any creditor becomes entitled to declare any Financial Indebtedness due and payable prior to its specified maturity as a result of an event of default (however described).

(i)

general suspension of payments, or a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) under any law relating to bankruptcy, insolvency or reorganization or relief of debtors,

(ii)

a composition, compromise, assignment or arrangement with any creditor which has a material adverse effect on the Issuer’s ability to perform its payment obligations under this Bond Agreement, or

(iii)

the appointment of a liquidator (other than in respect of a solvent liquidation), receiver, administrative receiver, administrator, compulsory manager or other similar officer of any substantial part of its assets.

15.2

In the event that one or more of the circumstances mentioned in Clause 15.1 occurs and is continuing, the Bond Trustee can, in order to protect the interests of the Bondholders, declare the Outstanding Bonds including accrued interest and expenses to be in default and due for immediate payment.

15.3

In the event that one or more of the circumstances mentioned in Clause 15.1 occurs and is continuing, the Bond Trustee shall declare the Outstanding Bonds including accrued interest and expenses to be in default and due for payment if:

(a)

the Bond Trustee receives a demand in writing with respect to the above from Bondholders representing at least 1/5 of the aggregate principal amount of Voting Bonds, and the Bondholders’ Meeting has not decided on other solutions, or

(b)

the Bondholders pursuant to action at a Bondholders’ Meeting have decided to declare the Outstanding Bonds in default and due for payment.

15.4

In the event that the Bond Trustee pursuant to the terms of Clauses 15.2 or 15.3 declares the Outstanding Bonds to be in default and due for payment, the Bond Trustee shall immediately deliver to the Issuer a notice demanding payment of interest and principal due to the Bondholders under the Outstanding Bonds including accrued interest and interest on overdue amounts and expenses.

16

Bondholders’ meeting

16.1

Authority of the Bondholders’ meeting

16.1.1

The Bondholders’ Meeting represents the supreme authority of the Bondholders community in all matters relating to the Bonds, and has the power to make all decisions altering the terms and conditions of the Bonds, including, but not limited to, any reduction of principal or interest and any conversion of the Bonds into other capital classes.

16.1.2

The Bondholders’ Meeting cannot resolve that any overdue payment of any instalment shall be reduced unless there is a pro rata reduction of the principal that has not fallen due, but may resolve that accrued interest (whether overdue or not) shall be reduced without a corresponding reduction of principal.

16.1.3

If a resolution by or an approval of the Bondholders is required, such resolution shall be passed at a Bondholders’ Meeting, see however Clause 17.1. Resolutions passed at Bondholders’ Meetings shall be binding upon all Bondholders and prevail for all the Bonds.

16.2

Procedural rules for Bondholders ’ meetings

16.2.1

A Bondholders’ Meeting shall be held at the written request of:

(a)

the Issuer;

(b)

Bondholders representing at least 1/10 of the Voting Bonds;

(c)

the Exchange, if the Bonds are listed; or

(d)

the Bond Trustee.

16.2.2

The Bondholders’ Meeting shall be summoned by the Bond Trustee. A request for a Bondholders’ Meeting shall be made in writing to the Bond Trustee, and shall clearly state the matters to be discussed.

16.2.3

If the Bond Trustee has not summoned a Bondholders’ Meeting within ten Business Days after having received a valid request, then the requesting party may summons the Bondholders’ Meeting itself.

16.2.4

The summons to a Bondholders’ Meeting shall be dispatched no later than ten Business Days prior to the date of the Bondholders’ Meeting. The summons and a confirmation of each Bondholder’s holdings of Bonds shall be sent to all Bondholders registered in the Securities Depository at the time of distribution. The Exchange shall also be informed if the Bonds are listed.

16.2.5

The summons shall specify the agenda of the Bondholders’ Meeting. The Bond Trustee may in the summons also set out other matters on the agenda than those requested. If amendments to this Bond Agreement have been proposed, the main content of the proposal shall be stated in the summons.

16.2.6

The Bond Trustee may restrict the Issuer from making any changes in the number of Voting Bonds in the period from distribution of the summons until the Bondholders’ Meeting, by serving notice to it to such effect.

16.2.7

Matters that have not been reported to the Bondholders in accordance with the procedural rules for summoning of a Bondholders’ Meeting may only be adopted with the approval of all Voting Bonds.

16.2.8

The Bondholders’ Meeting shall be held on premises designated by the Bond Trustee. The Bondholders’ Meeting shall be opened and shall, unless otherwise decided by the Bondholders’ Meeting, be chaired by the Bond Trustee. If the Bond Trustee is not present, the Bondholders’ Meeting shall be opened by a Bondholder, and be chaired by a representative elected by the Bondholders’ Meeting.

16.2.9

Minutes of the Bondholders’ Meeting shall be kept. The minutes shall state the number of Bonds represented at the Bondholders’ Meeting, the resolutions passed at the meeting, and the result of the voting. The minutes shall be signed by the chairman and at least one other person elected by the Bondholders’ Meeting. The minutes shall be deposited with the Bond Trustee and shall be available to the Bondholders.

16.2.10

The Bondholders, the Bond Trustee and—provided the Bonds are listed—representatives of the Exchange, have the right to attend the Bondholders’ Meeting. The chairman may grant access to the meeting to other parties, unless the Bondholders’ Meeting decides otherwise. Bondholders may attend by a representative holding proxy. Bondholders have the right to be assisted by an advisor. In case of dispute the chairman shall decide who may attend the Bondholders’ Meeting and vote for the Bonds.

16.2.11

Representatives of the Issuer have the right to attend the Bondholders’ Meeting. The Bondholders’ Meeting may resolve that the Issuer’s representatives may not participate in particular matters. The Issuer has the right to be present under the voting.

16.3

Resolutions passed at Bondholders ’ Meetings

16.3.1

At the Bondholders’ Meeting each Bondholder may cast one vote for each Voting Bond owned at close of business on the day prior to the date of the Bondholders’ Meeting in accordance with the records registered in the Securities Depository. The Bond Trustee may, at its sole discretion, accept other evidence of ownership.

16.3.2

In all matters, the Issuer, the Bond Trustee and any Bondholder have the right to demand vote by ballot. In case of parity of votes, the chairman shall have the deciding vote, regardless of the chairman being a Bondholder or not.

16.3.3

In order to form a quorum, at least half (1/2) of the Voting Bonds must be represented at the meeting, see however Clause 16.4. Even if less than half (1/2) of the Voting Bonds are represented, the Bondholders’ Meeting shall be held and voting completed.

16.3.4

Resolutions shall be passed by simple majority of the Voting Bonds represented at the Bondholders’ Meeting, unless otherwise set out in Clause 16.3.5.

16.3.5

A majority of at least 2/3 of the Voting Bonds represented at the Bondholders’ Meeting is required for any waiver or amendment of any terms of this Bond Agreement.

16.3.6

The Bondholders’ Meeting may not adopt resolutions which may give certain Bondholders or others an unreasonable advantage at the expense of other Bondholders.

16.3.7

The Bond Trustee shall ensure that resolutions passed at the Bondholders’ Meeting are properly implemented, however, the Bond Trustee may refuse to carry out resolutions being in conflict with this Bond Agreement (or any other Finance Document) or any applicable law.

16.3.8

The Issuer, the Bondholders and the Exchange shall be notified of resolutions passed at the Bondholders’ Meeting.

16.4

Repeated Bondholders ’ Meeting

16.4.1

If the Bondholders’ Meeting does not form a quorum pursuant to Clause 16.3.3, a repeated Bondholders’ Meeting may be summoned to vote on the same matters. The attendance and the voting result of the first Bondholders’ Meeting shall be specified in the summons for the repeated Bondholders’ Meeting.

16.4.2

The procedures and resolutions as set out in 16.2 and 16.3 above also apply for a repeated Bondholders’ meeting, however, a valid resolution may be passed at a repeated Bondholders’ Meeting even though less than half (1/2) of the Voting Bonds are represented.

17

The Bond Trustee

17.1

The role and authority of the Bond Trustee

17.1.1

The Bond Trustee shall monitor the compliance by the Issuer of its obligations under this Bond Agreement and applicable laws and regulations which are relevant to the terms of this Bond Agreement, including supervision of timely and correct payment of principal or interest, (however, this shall not restrict the Bond Trustee from discussing matters of confidentiality with the Issuer), arrange Bondholders’ Meetings, and make the decisions and implement the measures resolved pursuant to this Bond Agreement. The Bond Trustee is not obligated to assess the Issuer’s financial situation beyond what is directly set out in this Bond Agreement.

17.1.2

The Bond Trustee may take any step it in its sole discretion considers necessary or advisable to ensure the rights of the Bondholders in all matters pursuant to the terms of this Bond Agreement and is entitled to rely on advice from professional advisors. The Bond Trustee may in its sole discretion postpone taking action until such matter has been put forward to the Bondholders’ Meeting. The Bond Trustee is not obliged to take any steps to ascertain whether any Event of Default has occurred and until it has actual knowledge or express notice to the contrary the Bond Trustee is entitled to assume that no Event of Default has occurred.

17.1.3

The Bond Trustee may make decisions binding for all Bondholders concerning this Bond Agreement, including amendments to this Bond Agreement and waivers or modifications of certain provisions, which in the opinion of the Bond Trustee, do not materially and adversely affect the rights or interests of the Bondholders pursuant to this Bond Agreement.

17.1.4

The Bond Trustee may reach decisions binding for all Bondholders in circumstances other than those mentioned in Clause 17.1.3 provided that prior notification has been made to the Bondholders. Such notice shall contain a proposal of the amendment and the Bond Trustee’s evaluation. Further, such notification shall state that the Bond Trustee may not reach a decision binding for all Bondholders in the event that any Bondholder submits a written protest against the proposal within a deadline set by the Bond Trustee. Such deadline may not be less than five Business Days following the dispatch of such notification.

17.1.5

The Bond Trustee may reach other decisions than set out in Clauses 17.1.3 or 17.1.4 to amend or rectify decisions which due to spelling errors, calculation mistakes, misunderstandings or other obvious errors do not have the intended meaning.

17.1.6

The Bond Trustee may not adopt resolutions which may give certain Bondholders or others an unreasonable advantage at the expense of other Bondholders.

17.1.7

The Issuer, the Bondholders and the Exchange shall be notified of decisions made by the Bond Trustee pursuant to Clause 17.1 unless such notice obviously is unnecessary.

17.1.8

The Bondholders’ Meeting can decide to replace the Bond Trustee without the Issuer’s approval, as provided for in Clause 16.3.5.

17.1.9

The Bond Trustee may act as bond trustee and/or security agent for several bond issues relating to the Issuer notwithstanding potential conflicts of interest. The Bond Trustee may delegate exercise of its powers to other professional parties.

17.1.10

The Bond Trustee may instruct the Paying Agent to split the Bonds to a lower denomination in order to facilitate partial redemptions or restructuring of the Bonds or other situations.

17.2

Liability and indemnity

17.2.1

The Bond Trustee is liable only for direct losses incurred by Bondholders or the Issuer as a result of gross negligence or wilful misconduct by the Bond Trustee in performing its functions and duties as set out in this Bond Agreement. Such liability is limited to the maximum amount set out in Clause 2.2. The Bond Trustee is not liable for the content of information provided to the Bondholders on behalf of the Issuer.

17.2.2

The Issuer is liable for, and shall indemnify the Bond Trustee fully in respect of, all losses, expenses and liabilities incurred by the Bond Trustee as a result of negligence by the Issuer (including its directors, management, officers, employees, agents and representatives) to fulfil its obligations under the terms of this Bond Agreement and any other Finance Document, including losses incurred by the Bond Trustee as a result of the Bond Trustee’s actions based on misrepresentations made by the Issuer in connection with the establishment and performance of this Bond Agreement and any other Finance Document.

17.2.3

The Bond Trustee can as a condition for carrying out an instruction from the Bondholders (including, but not limited to, instructions set out in Clause 15.3(a) or 16.2.1 (b), require satisfactory security and indemnities for any possible liability and anticipated costs and expenses, from those Bondholders who requested that instruction and/or those who voted in favour of the decision to instruct the Bond Trustee. Any instructions from the Bondholders may be put forward to the Bondholders’ Meeting by the Bond Trustee before the Bond Trustee takes any action.

17.3

Change of Bond Trustee

17.3.1

Change of Bond Trustee shall be carried out pursuant to the procedures set out in Clause 16. The Bond Trustee shall continue to carry out its duties as bond trustee until such time that a new Bond Trustee is elected.

17.3.2

The fees and expenses of a new bond trustee shall be covered by the Issuer pursuant to the terms set out in Clause 14, but may be recovered wholly or partially from the Bond Trustee if the change is due to a breach by the Bond Trustee of its duties pursuant to the terms of this Bond Agreement or other circumstances for which the Bond Trustee is liable.

17.3.3

The Bond Trustee undertakes to co-operate so that the new bond trustee receives without undue delay following the Bondholders’ Meeting the documentation and information necessary to perform the functions as set out under the terms of this Bond Agreement.

18

Miscellaneous

18.1

The community of Bondholders

(a)

the Bondholders are bound by the terms of this Bond Agreement;

(b)

the Bond Trustee has power and authority to act on behalf of, and/or represent; the Bondholders, in all matters, included but not limited to taking any legal or other action, including enforcement of the Bond Issue and/or any security, opening of bankruptcy or other insolvency proceedings;

(d)

the Bond Trustee has, in order to manage the terms of this Bond Agreement, access to the Securities Depository to review ownership of Bonds registered in the Securities Depository; and

(e)

this Bond Agreement establishes a community between Bondholders meaning that:

(f)

(i)

the Bonds rank pari passu between each other;

(ii)

the Bondholders may not, based on this Bond Agreement, act directly towards, and may not themselves institute legal proceedings against, the Issuer or any other third party based on claims derived from the Finance Documents, including but not limited to recover the Bonds, enforcing any security interest or pursuing claims against any party as a substitute for damages to the interests under the Finance Documents, regardless of claims being pursued on a contractual or non-contractual basis, however not restricting the Bondholders to exercise their individual rights derived from this Bond Agreement;

(iii)

the Issuer may not, based on this Bond Agreement, act directly towards the Bondholders;

(iv)

the Bondholders may not cancel the Bondholders’ community; and

(v)

the individual Bondholder may not resign from the Bondholders’ community.

18.2

Defeasance

18.2.1

The Issuer may, at its option and at any time, elect to have certain obligations discharged (see Clause 18.2.2) upon complying with the following conditions (“Covenant Defeasance”);

(a)

the Issuer shall have irrevocably pledged to the Bond Trustee for the benefit of the Bondholders cash or government obligations acceptable by the Bond Trustee (the “Defeasance Pledge”) in such amounts as will be sufficient for the payment of principal and interest on the Outstanding Bonds to Maturity Date;

(b)

the Issuer shall, if required by the Bond Trustee, provide a legal opinion reasonably acceptable to the Bond Trustee to the effect that the Bondholders will not recognize income, gain or loss for income tax purposes (under US federal or Norwegian tax law, if applicable) as a result of the Defeasance Pledge and Covenant Defeasance, and will be subject to such income tax on the same amount and in the same manner and at the same times as would have been the case if the Defeasance Pledge had not occurred;

(c)

no Event of Default shall have occurred and be continuing on the date of establishment of the Defeasance Pledge, or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 181^st day after the date of establishment of the Defeasance Pledge;

(d)

neither the Defeasance Pledge nor the Covenant Defeasance results in a breach or violation of any material agreement or instrument binding upon the Issuer, or the certificate of association or partnership agreement governing the Issuer;

(e)

the Issuer shall have delivered to the Bond Trustee a certificate signed by the Chief Executive Officer of the GP that the Defeasance Pledge was not made by the Issuer with the intent of preferring the Bondholders over any other creditors of the Issuer or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Issuer or others;

(f)

the Issuer shall have delivered to the Bond Trustee any certificate or legal opinion reasonably required regarding the Covenant Defeasance or Defeasance Pledge (including certificate from the Chief Executive Officer of the GP and a legal opinion from its legal counsel to the effect that all conditions for Covenant Defeasance have been complied with; and that (i) the Defeasance Pledge will not be subject to any rights of creditors of the Issuer, (ii) the Defeasance Pledge will constitute a valid, perfected and enforceable security interest in favour of the Bond Trustee for the benefit of the Bondholders, and (iii) after the 181^st day following the establishment of the Defeasance Pledge, the funds and assets so pledged will not be subject to the effects of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors rights generally under the laws of the jurisdiction where the Defeasance Pledge was established and the corporate domicile of the Issuer).

18.2.2

Upon the exercise by the Issuer of its option under Clause 18.2.1;

(a)

the Issuer shall be released from their obligations under all provisions in Clause 13, except 13.2.1 (a), (g) and (h).

(b)

the Issuer shall not (and shall ensure that all Group Companies shall not) take any actions that may cause the value of the security interest created by this Covenant Defeasance to be reduced, and shall at the request of the Bond Trustee execute, or cause to be executed, such further documentation and perform such other acts as the Bond Trustee may reasonably require in order for the security interest to remain valid, enforceable and perfected by the Bond Trustee for the account of the Bondholders;

(c)

any guarantor(s) of the Issuer’s obligations under the Bonds shall be discharged from their obligations under the related guarantee(s), and the guarantee(s) shall cease to have any legal effect;

(d)

all other provisions of the Bond Agreement (except to the extend indicated in clauses (a)–(c) above) shall remain fully in force without any modifications.

18.2.3

All moneys covered by the Defeasance Pledge shall be applied by the Bond Trustee, in accordance with the provisions of this Bond Agreement, to the payment to the Bondholders of all sums due to them under this Bond Agreement on the due date thereof.

18.3

Limitation of claims

18.3.1

All claims under the Bonds and this Bond Agreement for payment, including interest and principal, shall be subject to the time-bar provisions of the Norwegian Limitation Act of May 18, 1979 No. 18.

18.4

Access to information

18.4.1

The Bond Agreement is available to anyone and copies may be obtained from the Bond Trustee or the Issuer. The Issuer shall ensure that the Bond Agreement is available in copy form to the general public until all the Bonds have been fully discharged.

18.4.2

The Bond Trustee shall, in order to carry out its functions and obligations under the Bond Agreement, have access to the Securities Depository for the purposes of reviewing ownership of the Bonds registered in the Securities Depository.

18.5

Amendments

18.5.1

All amendments of this Bond Agreement shall be made in writing, and shall unless otherwise provided for by this Bond Agreement, only be made with the approval of all parties hereto.

18.6

Notices, contact information

18.6.1

Written notices, warnings, summons and other communications to the Bondholders made by the Bond Trustee shall be sent via the Securities Depository with a copy to the Issuer and the Exchange. Information to the Bondholders may in lieu of such requirement in the immediately preceding sentence be published at the web site ▇▇▇.▇▇▇▇▇▇▇▇.▇▇.

18.6.2

The Issuer’s written notifications to the Bondholders shall be sent via the Bond Trustee, or alternatively through the Securities Depository with a copy to the Bond Trustee and the Exchange.

18.6.3

Unless otherwise specifically provided, all notices or other communications under or in connection with this Bond Agreement between the Bond Trustee and the Issuer shall be given or made in writing, by e-mail or facsimile. Any such notice or communication shall be deemed to be given or made as follows:

18.6.4

The Issuer and the Bond Trustee shall ensure that the other party is kept informed of changes in e-mail address, telephone and fax numbers and contact persons.

18.7

Dispute resolution and legal venue

18.7

This Bond Agreement and all disputes arising out of, or in connection with this Bond Agreement between the Bond Trustee, the Bondholders and the Issuer, shall be governed by Norwegian law.

18.8

Service of process

18.8.1

Without prejudice to any other mode of service, the Issuer:

(a)

irrevocably appoints Teekay Shipping Norway AS (a limited liability company incorporated in Norway with Company No. 964 111 723) as its agent for service of process relating to any proceedings before the Norwegian courts in connection with any Finance Document;

(b)

agrees that failure by the process agent to notify it of the process will not invalidate the proceedings concerned; and

(c)

consents to the service of process relating to any such proceedings before the Norwegian courts by prepaid posting of a copy of the process to its address stated in this Bond Agreement.

The Issuer:

TEEKAY LNG PARTNERS L.P.

The Bond Trustee:

NORDIC TRUSTEE ASA

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

/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇

By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇

By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇

Position:

Position:

1.

All information contained herein is true and accurate and there has been no change which would reasonably be expected to have a material adverse effect on the financial condition of the Issuer since the date of the last accounts or the last Compliance Certificate submitted to you.

2.

The covenants set out in Clause 13 are satisfied in all material respects;

3.

The aggregate amount of Undrawn Revolving Credit Lines of the Group Companies as of [date] was USD [ ];

4.

In accordance with Clause 13.5(a), the Free Liquidity of the Group as of [date] was USD [ ];

5.

In accordance with Clause 13.5(b), the Net Debt Ratio as of [date] was [ ]%; and

6.

In accordance with Clause 13.5(c), the Tangible Net Worth as of [date] was USD [ ].