Republic of The Marshall Islands | 4400 | 98-0454169 | ||
(State or other jurisdiction of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
David Matheson
Chris Hall Perkins Coie LLP 1120 N.W. Couch Street, 10th Floor Portland, Oregon 97209 (503) 727-2000 |
Joshua Davidson
Laura Tyson Baker Botts L.L.P. 910 Louisiana Street Houston, TX 77002-4995 (713) 229-1234 |
II-1
II-2
II-3
Item 6.
Indemnification of Directors and Officers
Item 7.
Recent Sales of Unregistered Securities
Item 8.
Exhibits and Financial Statement Schedules
Exhibit
Number
Description
1
.1
Form of Underwriting Agreement
3
.1
Certificate of Limited Partnership of Teekay LNG Partners L.P.
(incorporated by reference to Exhibit 3.1 of the
Registrants Form F-1, declared effective by the
Securities and Exchange Commission on May 5, 2005, File
No. 333-120727)
3
.2
First Amended and Restated Agreement of Limited Partnership of
Teekay LNG Partners L.P. (incorporated by reference to Appendix
A to the Prospectus contained within the Registrants
Form F-1, declared effective by the Securities and Exchange
Commission on May 5, 2005, File No. 333-120727)
3
.3
Certificate of Formation of Teekay GP L.L.C. (incorporated by
reference to Exhibit 3.3 of the Registrants
Form F-1, declared effective by the Securities and Exchange
Commission on May 5, 2005, File No. 333-120727)
3
.4
Second Amended and Restated Limited Liability Company Agreement
of Teekay GP L.L.C. (incorporated by reference to
Exhibit 3.4 of the Registrants Form F-1,
declared effective by the Securities and Exchange Commission on
May 5, 2005, File No. 333-120727)
5
.1
Opinion of Watson, Farley & Williams, as to the
legality of the securities being registered*
8
.1
Opinion of Perkins Coie LLP, relating to tax matters*
8
.2
Opinion of Watson, Farley & Williams, relating to tax
matters*
10
.1
Form of Credit Facility (incorporated by reference to
Exhibit 10.1 of the Registrants Form F-1,
declared effective by the Securities and Exchange Commission on
May 5, 2005, File No. 333-120727)
10
.2
Form of Contribution, Conveyance and Assumption Agreement
(incorporated by reference to Exhibit 10.2 of the
Registrants Form F-1, declared effective by the
Securities and Exchange Commission on May 5, 2005, File
No. 333-120727)
Exhibit
Number
Description
10
.3
Form of Teekay LNG Partners L.P. 2005 Long-Term Incentive Plan
(incorporated by reference to Exhibit 10.3 of the
Registrants Form F-1, declared effective by the
Securities and Exchange Commission on May 5, 2005, File
No. 333-120727)
10
.4
Form of Omnibus Agreement (incorporated by reference to
Exhibit 10.4 of the Registrants Form F-1,
declared effective by the Securities and Exchange Commission on
May 5, 2005, File No. 333-120727)
10
.5
Form of Amendment to Omnibus Agreement*
10
.6
Form of Administrative Services Agreement with Teekay Shipping
Limited (incorporated by reference to Exhibit 10.5 of the
Registrants Form F-1, declared effective by the
Securities and Exchange Commission on May 5, 2005, File
No. 333-120727)
10
.7
Form of Advisory, Technical and Administrative Services
Agreement (incorporated by reference to Exhibit 10.6 of the
Registrants Form F-1, declared effective by the
Securities and Exchange Commission on May 5, 2005, File
No. 333-120727)
10
.8
Form of LNG Strategic Consulting and Advisory Services Agreement
(incorporated by reference to Exhibit 10.7 of the
Registrants Form F-1, declared effective by the
Securities and Exchange Commission on May 5, 2005, File
No. 333-120727)
10
.9
Form of Agreement to Purchase Nakilat Interest (incorporated by
reference to Exhibit 10.10 of the Registrants
Form F-1, declared effective by the Securities and Exchange
Commission on May 5, 2005, File No. 333-120727)
10
.10
Syndicated Loan Agreement between Naviera Teekay Gas III,
S.L. (formerly Naviera F. Tapias Gas III, S.A.) and Caixa
de Afforos de Vigo Ourense e Pontevedra, as Agent, dated as of
October 2, 2000, as amended (incorporated by reference to
Exhibit 10.11 of the Registrants Form F-1,
declared effective by the Securities and Exchange Commission on
May 5, 2005, File No. 333-120727)
10
.11
Bareboat Charter Agreement between Naviera Teekay Gas III,
S.L. (formerly Naviera F. Tapias Gas III, S.A.) and
Poseidon Gas AIE, dated as of October 20, 2000
(incorporated by reference to Exhibit 10.12 of the
Registrants Form F-1, declared effective by the
Securities and Exchange Commission on May 5, 2005, File
No. 333-120727)
10
.12
Credit Facility Agreement between Naviera Teekay Gas IV, S.L.
(formerly Naviera F. Tapias Gas IV, S.A.) and Chase Manhattan
International Limited, as Agent, dated as of December 21,
2001, as amended (incorporated by reference to
Exhibit 10.13 of the Registrants Form F-1,
declared effective by the Securities and Exchange Commission on
May 5, 2005, File No. 333-120727)
10
.13
Bareboat Charter Agreement between Naviera Teekay Gas IV, S.L.
(formerly Naviera F. Tapias Gas IV, S.A.) and Pagumar AIE, dated
as of December 30, 2003 (incorporated by reference to
Exhibit 10.14 of the Registrants Form F-1,
declared effective by the Securities and Exchange Commission on
May 5, 2005, File No. 333-120727)
10
.14
Form of Purchase Agreement relating to African Spirit L.L.C.,
Asian Spirit L.L.C. and European Spirit L.L.C.
21
.1
List of Subsidiaries of Teekay LNG Partners L.P.*
23
.1
Consent of Ernst & Young LLP*
23
.2
Consent of Watson, Farley & Williams (contained in
Exhibit 5.1)*
23
.3
Consent of Perkins Coie LLP (contained in Exhibit 8.1)*
24
.1
Powers of Attorney*
Item 9.
Undertakings
(1) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as
of the time it was declared effective.
(2) For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial
bona fide
offering thereof.
II-4
TEEKAY LNG PARTNERS L.P.
By: Teekay GP LLC, its General Partner
By:
/s/ Bruce C. Bell
Name: Bruce C. Bell
Title: Secretary
Signature
Title
/s/ *
Chief Executive Officer and Chief Financial Officer (Principal
Executive, Financial and Accounting Officer), Director and
Authorized Representative in the United States
/s/ *
Director
/s/ *
Director
/s/ *
Director
/s/ *
Director
/s/ *
Director
/s/ *
Director
*By: /s/ Bruce C. Bell
EXHIBIT 1.1
TEEKAY LNG PARTNERS L.P.
4,000,000 COMMON UNITS
REPRESENTING LIMITED PARTNER INTERESTS
Citigroup Global Markets Inc. November __, 2005
[Co-Managers -- to come]
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
Teekay LNG Partners L.P., a limited partnership organized under the laws of the Marshall Islands (the "Partnership"), proposes to issue and sell (the "OFFERING") to you (the "UNDERWRITERS"), 4,000,000 Common Units (the "FIRM UNITS"), each representing a limited partner interest in the Partnership (the "COMMON UNITS"). The Partnership also proposes to grant to you an option to purchase up to 600,000 additional Common Units to cover over-allotments (the "OPTION UNITS"). The Firm Units and the Option Units, if purchased, are hereinafter collectively called the "UNITS." Certain terms used herein are defined in Section 19 hereof.
Teekay GP L.L.C., a Marshall Islands limited liability company (the "GENERAL PARTNER"), serves as the sole general partner of the Partnership. Teekay LNG Operating L.L.C., a Marshall Islands limited liability company (the "OPERATING COMPANY"), is a wholly owned direct subsidiary of the Partnership. Teekay Luxembourg S.a.r.l., a Luxembourg company ("LUXCO"), is a wholly owned direct subsidiary of the Operating Company. Teekay Shipping Spain S.L., a Spanish company ("TEEKAY SPAIN"), is a wholly owned direct subsidiary of Luxco. The entities set forth on Schedule II are wholly owned subsidiaries of Teekay Spain and are referred to herein collectively with Luxco and Teekay Spain as the "OPERATING SUBSIDIARIES").
The General Partner, the Partnership, the Operating Company and the Operating Subsidiaries are hereinafter referred to collectively as the "TEEKAY ENTITIES." The General Partner, the Partnership and the Operating Company are hereinafter referred to collectively as the "TEEKAY PARTIES."
This is to confirm the agreement among the Teekay Parties and the Underwriters concerning the purchase of the Firm Units and the Option Units from the Partnership by the Underwriters.
1. Representations, Warranties and Agreements of the Teekay Parties. Each of the Teekay Parties, jointly and severally, represents and warrants to, and agrees with, each Underwriter that:
(a) Registration. The Partnership has prepared and filed with the Commission a registration statement (File number 333-_______) on Form F-1, including a related preliminary prospectus, for registration under the Act of the offering and sale of the Units. The Partnership may have filed one or more amendments thereto, including a related preliminary prospectus, each of which has previously been furnished to you. The Partnership will next file with the Commission one of the following: either (i) prior to the Effective Date of such registration statement, a further amendment to such registration statement (including the form of final prospectus) or (ii) after the Effective Date of such registration statement, a final prospectus in accordance with Rules 430A and 424(b). In the case of clause (ii), the Partnership has included in such registration statement, as amended at the Effective Date, all information (other than Rule 430A Information) required by the Act and the rules thereunder to be included in such registration statement and the Prospectus. As filed, such amendment and form of final prospectus, or such final prospectus, shall contain all Rule 430A Information, together with all other such required information, and, except to the extent Citigroup Global Markets Inc. shall agree in writing to a modification, shall be in all substantive respects in the form furnished to you prior to the Execution Time or, to the extent not completed at the Execution Time, shall contain only such specific additional information and other changes (beyond that contained in the latest Preliminary Prospectus) as the Partnership has advised you, prior to the Execution Time, will be included or made therein.
(b) No Material Misstatements or Omissions. On the Effective Date, the Registration Statement did or will, and when the Prospectus is first filed (if required) in accordance with Rule 424(b) and on the Closing Date and on any date on which Option Units are purchased hereunder, if such date is not the Closing Date (an "OPTION CLOSING DATE"), the Prospectus (and any supplements thereto) will, comply in all material respects with the applicable requirements of the Act and the rules thereunder; on the Effective Date and at the Execution Time, the Registration Statement did not or will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading; and, on the Effective Date, the Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date of any filing pursuant to Rule 424(b) and on the Closing Date and any Option Closing Date, the Prospectus (together with any supplement thereto) will not, include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and the statements made or to be made in such documents that are covered by Rule 175(b) under the Act were made or will be made with a reasonable basis and in good faith, provided, however, that the Teekay Parties make no representations or warranties as to the information contained in or omitted from the Registration Statement or the Prospectus (or any supplement thereto) in reliance upon and in conformity with information furnished in writing to the Partnership by or on behalf of any Underwriter specifically for inclusion in the Registration Statement or the Prospectus (or any supplement thereto).
(c) Formation and Qualification. Each of the Teekay Entities has been duly formed or incorporated and is validly existing as a limited partnership, limited liability company
or corporation, as the case may be, in good standing under the laws of its respective jurisdiction of formation or incorporation, and is duly registered or qualified to do business and is in good standing as a foreign limited liability company, limited partnership or corporation, as the case may be, in each jurisdiction in which its ownership or lease of property or the conduct of its businesses requires such registration or qualification, except where the failure so to register or qualify would not (i) reasonably be expected to have a Material Adverse Effect or (ii) subject the limited partners of the Partnership to any material liability or disability. "MATERIAL ADVERSE EFFECT," as used throughout this Agreement, means a material adverse effect on the condition (financial or otherwise), results of operations, business, properties, assets or prospects of the Teekay Entities, taken as a whole, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto). Each of the Teekay Entities has all limited liability company, limited partnership or corporate, as the case may be, power and authority necessary to own or lease its properties currently owned or leased or to be owned or leased at each Closing Date, and to conduct its business as currently conducted and as to be conducted at each Closing Date, in each case in all material respects as described in the Registration Statement and Prospectus.
(d) Ownership of General Partner Interest in the Partnership. The General Partner is the sole general partner of the Partnership with a 2.0% general partner interest in the Partnership; such general partner interest will be duly authorized and validly issued in accordance with the partnership agreement of the Partnership (the "PARTNERSHIP AGREEMENT"); and the General Partner owns such general partner interest free and clear of all pledges, liens, encumbrances, security interests, charges, equities or other claims (collectively, "LIENS") (except restrictions on transferability contained in the Partnership Agreement, as described in the Prospectus, or under applicable securities laws).
(e) Ownership of the Sponsor Units and Incentive Distribution Rights in the Partnership. Teekay Shipping Corporation, a Marshall Islands corporation and the owner of the General Partner ("TSC"), owns, immediately prior to the Offering, 8,734,572 Common Units and 14,734,572 Subordinated Units (all such Common and Subordinated Units being collectively referred to herein as the "SPONSOR UNITS"); and the General Partner owns 100% of the Incentive Distribution Rights (as defined in the Partnership Agreement) (the "INCENTIVE DISTRIBUTION RIGHTS"). All of such Sponsor Units and Incentive Distribution Rights and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnership Agreement, and are fully paid (to the extent required under the Partnership Agreement) and nonassessable (except as described in the Prospectus under the caption "The Partnership Agreement - - Limited Liability"); and TSC and the General Partner own the Sponsor Units and the Incentive Distribution Rights, respectively, free and clear of all Liens (except restrictions on transferability contained in the Partnership Agreement, as described in the Prospectus or under applicable securities laws).
(f) Valid Issuance of the Units. At the Closing Date or the Option Closing Date, the Firm Units and the Option Units, as the case may be, and the limited partner interests represented thereby will be duly authorized by the Partnership Agreement and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms hereof, will be validly issued, fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as described in the Prospectus under the caption "The Partnership Agreement - Limited Liability").
(g) Ownership of the General Partner. TSC directly owns a 100% membership interest in the General Partner; such membership interest has been duly authorized and validly issued and is fully paid (to the extent required under the limited liability company agreement of the General Partner (the "GENERAL PARTNER LLC AGREEMENT")) and nonassessable (except as such nonassessability may be affected by Section 51 of the Marshall Islands Limited Liability Company Act); and TSC owns such membership interest free and clear of all Liens.
(h) Ownership of the Operating Company. The Partnership owns a 100% membership interest in the Operating Company; such membership interest has been duly authorized and validly issued in accordance with the limited liability company agreement of the Operating Company (the "OPERATING COMPANY LLC AGREEMENT") and is fully paid (to the extent required under the Operating Company LLC Agreement) and nonassessable (except as such nonassessability may be affected by Section 51 of the Marshall Islands Limited Liability Company Act); and the Partnership owns such membership interest free and clear of all Liens except for Liens pursuant to the Credit Agreement (as defined in Section 19 hereof).
(i) Ownership of the Operating Subsidiaries and Acquisition Subsidiaries. The Operating Company owns, directly or indirectly, 100% of the equity interests in each of the Operating Subsidiaries; such equity interests are duly authorized and validly issued in accordance with the organizational documents of each Operating Subsidiary (the "OPERATING SUBSIDIARIES' ORGANIZATIONAL DOCUMENTS") and are fully paid (to the extent required under the Operating Subsidiaries' Organizational Agreements) and nonassessable (except as such nonassessability may be affected by the applicable statutes of the jurisdiction of formation of the applicable Operating Subsidiary); and the Operating Company owns such equity interests free and clear of all Liens except for Liens pursuant to the credit agreements and related security agreements disclosed or referred to in the Prospectus. Immediately following the closing of the acquisition of African Spirit L.L.C., Asian Spirit L.L.C. and European Spirit L.L.C. (the "ACQUISITION SUBSIDIARIES") according to the terms and conditions set forth in the Purchase Agreement, the Operating Company will own, directly or indirectly, 100% of the equity interests in each of the Acquisition Subsidiaries; such equity interests will be duly authorized and validly issued in accordance with the organizational documents of each Acquisition Subsidiary (THE "ACQUISITION SUBSIDIARIES ORGANIZATIONAL DOCUMENTS") and will be fully paid (to the extent required under the Acquisition Subsidiaries Organizational Agreements) and nonassessable (except as such nonassessability may be affected by the applicable statutes of the jurisdiction of formation of the applicable Acquisition Subsidiary); and the Operating Company will own such equity interests free and clear of all Liens except for Liens pursuant to the credit agreements and related security agreements disclosed or referred to in the Prospectus.
(j) No Other Subsidiaries. Other than its 2.0% general partner interest in the Partnership and the Incentive Distribution Rights, the General Partner does not own, and at the Closing Date and the Option Closing Date, will not own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity. Other than (i) the Partnership's ownership of a 100% membership interest in the Operating Company and (ii) the Operating Company's ownership
(directly or indirectly) of 100% of the equity interests in each of the Operating Subsidiaries and in the Acquisition Subsidiaries, neither the Partnership nor the Operating Company owns, and at the Closing Date and the Option Closing Date, neither will own, directly or indirectly, any equity or long-term debt securities of any corporation, partnership, limited liability company, joint venture, association or other entity.
(k) No Preemptive Rights or Options. Except as described in the Prospectus or herein, there are no preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of, any equity interests of any of the Teekay Entities. Except as described in the Prospectus, there are no outstanding options or warrants to purchase (i) any Common Units, Subordinated Units, Incentive Distribution Rights or other interests in the Partnership, (ii) any membership interests in the Operating Company, (iii) to the Teekay Parties' knowledge, any membership interests in the General Partner, or (iv) any equity interests in any Operating Subsidiary or the Acquisition Subsidiaries.
(l) No Registration Rights. No holder of securities of any of the Teekay Entities has rights to the registration of such securities under the Registration Statement, except for any rights of TSC with respect to this Offering, which rights it has waived.
(m) Capitalization. As of June 30, 2005 and based on the assumptions set forth in the Prospectus, the Partnership would have had, on an as adjusted basis indicated in the Prospectus (and any amendment or supplement thereto), a capitalization as set forth in the "Capitalization" section thereof.
(n) Authority and Authorization. The Partnership has all requisite limited partnership power and authority to issue, sell and deliver the Units in accordance with and upon the terms and conditions set forth in this Agreement, the Partnership Agreement, the Registration Statement and the Prospectus and to acquire the equity interests in the Acquisition Subsidiaries pursuant to the terms of the Purchase Agreement. At the Closing Date and the Option Closing Date, all corporate, partnership and limited liability company action, as the case may be, required to be taken by the Teekay Entities or any of their stockholders, partners or members for the (i) authorization, issuance, sale and delivery of the Units contemplated by this Agreement and (ii) execution, delivery and performance of the Purchase Agreement shall have been validly taken.
(o) Enforceability of this Agreement. This Agreement has been duly authorized, validly executed and delivered by each of the Teekay Parties.
(p) Enforceability of Operative Agreements.
(i) the General Partner LLC Agreement has been duly authorized, executed and delivered by TSC;
(ii) the Partnership Agreement has been duly authorized, executed and delivered by the General Partner and TSC and is a valid and legally binding agreement of the General Partner and TSC, enforceable against the General Partner and TSC in accordance with its terms;
(iii) the Operating Company LLC Agreement has been duly authorized, executed and delivered by the Partnership; and
(iv) each of the Operating Subsidiaries' Organizational Documents have been duly authorized, executed and delivered by the appropriate Teekay Entity;
provided that, with respect to each agreement described in this Section 1(p), the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and, provided further, that the indemnity, contribution and exoneration provisions contained in any of such agreements may be limited by applicable laws and public policy.
The General Partner LLC Agreement, the Partnership Agreement, the Operating Company LLC Agreement, and the Operating Subsidiaries' Organizational Documents are herein collectively referred to as the "OPERATIVE AGREEMENTS."
(q) Enforceability of the Purchase Agreement. The General Partner has the power and authority to enter into, on behalf of the Partnership, the Purchase Agreement between TSC and the Partnership related to the acquisition of the entities that own the Suezmax tankers the African Spirit, the Asian Spirit and the European Spirit (the "PURCHASE AGREEMENT") and to carry out its obligations thereunder. The Purchase Agreement has been duly authorized, validly executed and delivered by the General Partner, on behalf of the Partnership, and is a valid and legally binding agreement of the Partnership, enforceable against it in accordance with its terms, except as such enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law); and, provided, further, that the indemnity provisions contained in the Purchase Agreement may be limited by applicable laws and public policy.
(r) No Conflicts. None of the offering, issuance and sale by the Partnership of the Units, the execution, delivery and performance of this Agreement, the Operative Agreements or the Purchase Agreement by the Teekay Entities that are parties hereto or thereto, or the consummation of the transactions contemplated hereby and thereby (i) conflicts or will conflict with or constitutes or will constitute a violation of any agreement of limited partnership, limited liability company agreement, certificate of incorporation or bylaws or other organizational documents of any of the Teekay Entities, (ii) conflicts or will conflict with or constitutes or will constitute a breach or violation of, or a default (or an event that, with notice or lapse of time or both, would constitute such a default) under, any indenture, contract, mortgage, deed of trust, note agreement, loan agreement, lease or other agreement, or instrument to which any of the Teekay Entities is a party or by which any of them or any of their respective properties may be bound, (iii) violates or will violate any statute, law, rule, regulation, judgment, order or decree applicable to any of the Teekay Entities of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority having jurisdiction over any of the Teekay Entities or any of their properties, or (iv) results or will result in the creation or imposition of any Lien upon any property or assets of any of the Teekay Entities (other than Liens referred to or described in the Prospectus), which conflicts, breaches, violations, defaults or Liens, in the case
of clauses (ii), (iii) or (iv), could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or could materially impair the ability of any of the Teekay Entities to perform their obligations under this Agreement, the Operative Agreements or the Purchase Agreement.
(s) No Consents. Except for (i) the registration of the Units under
the Act, (ii) such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), and applicable state securities or "Blue Sky" laws
in connection with the purchase and distribution of Units by the Underwriters,
(iii) such consents (as defined herein) that have been, or prior to the Closing
Date will be, obtained, (iv) such consents that, if not obtained, would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect or could not reasonably be expected to materially impair the
ability of any of the Teekay Entities to perform their obligations under this
Agreement, the Operative Agreements or the Purchase Agreement, and (v) as
disclosed in the Prospectus, no permit, consent, approval, authorization, order,
registration, filing or qualification ("CONSENT") of or with any court,
governmental agency or body having jurisdiction over any of the Teekay Entities
or any of their respective properties is required in connection with the
offering, issuance and sale by the Partnership of the Units, the execution,
delivery and performance of this Agreement and the Purchase Agreement by the
Teekay Entities parties hereto or thereto, or the consummation of the
transactions contemplated by this Agreement or the Purchase Agreement.
(t) No Default. None of the Teekay Entities is (i) in violation of its
agreement of limited partnership, limited liability company agreement,
certificate of incorporation or bylaws or other organizational documents, (ii)
in breach of or in default under (and no event that, with notice or lapse of
time or both, would constitute such a default has occurred or is continuing
under) any term, covenant, obligation, agreement or condition contained in any
indenture, mortgage, deed of trust, note agreement, loan agreement, lease or
other agreement, obligation, condition, covenant or instrument to which it is a
party or by which it is or may be bound or to which any of its properties or
assets is subject or (iii) in violation of any statute, law, rule, regulation,
judgment, order or decree applicable to any of the Teekay Entities of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over any of the Teekay Entities or any of their
properties, which breach, default or violation, in the case of clause (ii) or
(iii), would, if continued, reasonably be expected to have a Material Adverse
Effect, or could reasonably be expected to materially impair the ability of any
of the Teekay Entities to perform their obligations under this Agreement, the
Operative Agreements or the Purchase Agreement. To the knowledge of the Teekay
Parties, no third party to any indenture, contract, mortgage, deed of trust,
note agreement, loan agreement, lease or other agreement, obligation, condition,
covenant or instrument to which any of the Teekay Entities is a party or by
which any of them are bound or to which any of their properties are subject, is
in default under any such agreement, which breach, default or violation would,
if continued, reasonably be expected to have a Material Adverse Effect.
(u) Conformity of Securities to Description in Prospectus. The Units, when issued and delivered in accordance with the terms of the Partnership Agreement against payment therefor as provided herein will conform, and the Sponsor Units and the Incentive Distribution Rights conform, in all material respects to the descriptions thereof contained in the Prospectus.
(v) No Material Adverse Change. Since the date of the latest audited financial statements included in the Prospectus and other than as set forth in or contemplated by the Prospectus, (i) no Teekay Entity has sustained 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, investigation, order or decree, (ii) there has not been any material change in the capitalization or material increase in the short-term debt or long-term debt of the Teekay Entities or any material adverse change, or any development involving or which could reasonably be expected to involve, individually or in the aggregate, a prospective material adverse change in or affecting the general affairs, condition (financial or otherwise), results of operations, business, properties, assets or prospects of the Teekay Entities, taken as a whole, and (iii) none of the Teekay Entities has incurred any liability or obligation, direct, indirect or contingent, or entered into any transactions, whether or not in the ordinary course of business, that, individually or in the aggregate, is material to the Teekay Entities, taken as a whole, or otherwise than as set forth or contemplated in the Prospectus (exclusive of any supplement thereto).
(w) Financial Statements. The consolidated historical financial statements (including the related notes and supporting schedules) included in the Prospectus and the Registration Statement (i) present fairly in all material respects the financial condition, results of operations and cash flows of the entities purported to be shown thereby on the basis stated therein, at the respective dates or for the respective periods indicated, (ii) comply as to form in all material respects with the applicable accounting requirements of the Act and (iii) have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted therein). The summary historical and pro forma financial and operating information set forth in the Prospectus (and any amendment or supplement thereto) under the caption "Summary Historical and Pro Forma Financial and Operating Data" and the selected historical and pro forma financial and operating data set forth in the Registration Statement and Prospectus under the caption "Selected Historical and Pro Forma Financial and Operating Data" is accurately presented in all material respects and prepared on a basis consistent with the audited and unaudited historical financial statements and pro forma financial statements, as applicable, from which it has been derived. The pro forma financial statements included in the Prospectus and the Registration Statement include assumptions that provide a reasonable basis for presenting the significant effects directly attributable to the transactions and events described therein; the related pro forma adjustments give appropriate effect to those assumptions; and the pro forma adjustments reflect the proper application in all material respects of those adjustments to the historical financial statement amounts in the pro forma financial statements included in the Prospectus and the Registration Statement. The pro forma financial statements included in the Prospectus and the Registration Statement comply as to form in all material respects with the applicable accounting requirements of Regulation S-X under the Act.
(x) Independent Registered Public Accounting Firm. The accountants, Ernst & Young LLP, who have certified or shall certify the financial statements of Luxco, Teekay Spain, the Partnership and the General Partner and delivered their report with respect to the audited consolidated financial statements included in the Prospectus, were and are the independent registered public accounting firm with respect to such entities within the meaning of
the Act and the applicable published rules and regulations thereunder and the rules and regulations of the Public Company Accounting Oversight Board.
(y) Transfer Taxes. There are no transfer taxes or other similar fees or charges under Federal law or the laws of any state, or any political subdivision thereof, required to be paid in connection with the execution and delivery of this Agreement, the issuance by the Partnership or sale by the Partnership of the Units or the consummation of the transactions contemplated by this Agreement.
(z) Title to Properties. The Operating Company and the Operating
Subsidiaries have good and marketable title to all real property and good title
to all personal property described in the Prospectus as owned by the Operating
Company and the Operating Subsidiaries, and each Operating Subsidiary identified
on Exhibit B is the sole owner of the vessel set forth opposite its name on
Exhibit B (the "VESSELS"), in each case free and clear of all Liens except (i)
as described, and subject to the limitations contained, in the Prospectus or
(ii) as do not materially affect the value of such property, taken as a whole,
and do not materially interfere with the use of such properties, taken as a
whole, as they have been used in the past and are proposed to be used in the
future, as described in the Prospectus (the Liens described in clauses (i) and
(ii) above being "PERMITTED LIENS"); provided that with respect to any interest
in real property and buildings held under lease by the Operating Company or any
of the Operating Subsidiaries, such real property and buildings are held under
valid and subsisting and enforceable leases (except as may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws relating to or affecting creditors' rights generally and by general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law)), with such exceptions as do not materially
interfere with the use of the properties of the Teekay Entities, taken as a
whole as they have been used in the past as described in the Prospectus and are
proposed to be used in the future as described in the Prospectus.
(aa) Vessel Registration. Each vessel identified in Exhibit B is duly registered under the laws of the jurisdiction set forth on Exhibit B in the name of the applicable Operating Subsidiary or other Teekay Entity identified in Exhibit B, free and clear of all Liens except for Permitted Liens.
(bb) Permits. Each of the Teekay Entities has such permits, consents (as defined above), licenses, franchises, concessions, certificates and authorizations ("PERMITS") of, and has made all declarations and filings with, all Federal, provincial, state, local or foreign governmental or regulatory authorities, all self-regulatory organizations and all courts and other tribunals, as are necessary to own or lease its properties and to conduct its business in the manner described in the Prospectus, subject to such qualifications as may be set forth in the Prospectus and except for such permits, declarations and filings that, if not obtained, would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; except as set forth in the Prospectus, each of the Teekay Entities has fulfilled and performed all its material obligations with respect to such permits which are or will be due to have been fulfilled and performed by such date and no event has occurred that would prevent the permits from being renewed or reissued or that allows, or after notice or lapse of time would allow, revocation or termination thereof or results or would result in any impairment of the rights of the holder of any
such permit, except for such non-renewals, non-issues, revocations, terminations and impairments that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and none of such permits contains any restriction that is materially burdensome to the Teekay Entities, taken as a whole.
(cc) Insurance. Except as set forth in the Prospectus with respect to off hire insurance, the Teekay Entities are insured by insurers of recognized financial responsibility covering against such losses and risks and in such amounts as are prudent and customary in the businesses in which they are engaged; all policies of insurance insuring the Teekay Entities or their respective businesses, assets, employees, officers and directors are in full force and effect; the Teekay Entities are in compliance with the terms of such policies and instruments in all material respects; and there are no claims by any of the Teekay Entities under any such policy or instrument as to which any insurance company is denying liability or defending under a reservation of rights clause; none of the Teekay Entities has been refused any insurance coverage sought or applied for; and the General Partner believes that each of the Teekay Entities will be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect.
(dd) Contracts to be Described or Filed. To the best knowledge of the Teekay Parties, there is no agreement, franchise, contract, indenture, lease or other document or instrument of a character required to be described in the Registration Statement or Prospectus, or to be filed as an exhibit thereto, which is not described or filed as required.
(ee) Litigation. There is (i) no action, suit or proceeding before or
by any court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or, to the knowledge of the Teekay Parties, threatened, to
which any of the Teekay Entities is or could reasonably be expected to be made a
party or to which the business or property of any of the Teekay Entities is or
could reasonably be expected to be made subject or that would be required to be
disclosed in the Registration Statement which is not adequately disclosed in the
Prospectus as required, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or, to the knowledge of
the Teekay Parties, that has been proposed by any governmental agency, and (iii)
no injunction, restraining order or order of any nature issued by a Federal or
state court or foreign court of competent jurisdiction to which any of the
Teekay Entities is or may be subject, that, in the case of clauses (i), (ii) and
(iii) above, (A) could reasonably be expected to (1) individually or in the
aggregate have a Material Adverse Effect, or (2) prevent or result in the
suspension of the offering and issuance of the Units, or (B) questions the
validity of this Agreement, any Operative Agreement or the Purchase Agreement.
(ff) Certain Relationships and Related Transactions. No relationship, direct or indirect, exists between or among any Teekay Entity, on the one hand, and the directors, officers, members, partners, stockholders, customers or suppliers of any Teekay Entity on the other hand that is required to be described in the Prospectus that is not so described. There are no outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of indebtedness by any Teekay Entity to or for the benefit of any of the officers, directors or managers of any Teekay Entity or their respective family members, except as disclosed in the Registration Statement and the Prospectus. No Teekay
Entity has, in violation of the Sarbanes-Oxley Act of 2002, directly or indirectly, extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan to or for any director or executive officer of any Teekay Entity.
(gg) Sarbanes-Oxley Act of 2002. The Partnership is in compliance in
all material respects with all applicable provisions of the Sarbanes-Oxley Act
of 2002 and the rules and regulations of the Commission, the NYSE (as defined in
Section 1(oo) hereof) that are effective and applicable to the Partnership.
(hh) No Labor Dispute. No labor problem or dispute with the employees of the Teekay Entities exists or is threatened or imminent, and none of the Teekay Parties is aware of any existing or imminent labor disturbance by the employees of any of its principal suppliers, contractors or customers, that, in each case, could reasonably be expected to have a Material Adverse Effect.
(ii) Tax Returns. Each of the Teekay Entities has filed all foreign, federal, state and local tax returns that are required to be filed or has requested extensions thereof (except in any case in which the failure so to file could not reasonably be expected to have a Material Adverse Effect) and has paid all taxes required to be paid by it and any other assessment, fine or penalty levied against it, to the extent that any of the foregoing is due and payable, except for any such assessment, fine or penalty that is currently being contested in good faith or as could not reasonably be expected to have a Material Adverse Effect.
(jj) Books and Records. Each Teekay Entity maintains systems of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with U.S. generally accepted accounting principles and to maintain asset accountability; (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.
(kk) Environmental Compliance. Each Teekay Entity (i) is in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or Hazardous Materials (as defined below) ("ENVIRONMENTAL LAWS"),
(ii) has received and is in compliance with all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its
business, (iii) has not received notice of any actual or potential liability
under any environmental law, and (iv) is not a party to or affected by any
pending or, to the knowledge of the Teekay Parties, threatened action, suit or
proceeding, is not bound by any judgment, decree or order, and has not entered
into any agreement, in each case relating to any alleged violation of any
Environmental Law or any actual or alleged release or threatened release or
cleanup at any location of any Hazardous Materials, except where such
noncompliance or deviation from that described in (i) - (iv) above could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. None of the Teekay Entities has been named as a "potentially
responsible party" under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ("CERCLA"). The term "HAZARDOUS MATERIAL"
means (A)
any "hazardous substance" as defined in CERCLA, (B) any "hazardous waste" as defined in the Resource Conservation and Recovery Act, as amended, (C) any petroleum or petroleum product, (D) any polychlorinated biphenyl and (E) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material, waste or substance regulated under or within the meaning of any other Environmental Law.
(ll) Effect of Environmental Laws. In the ordinary course of its business, each Teekay Entity periodically reviews the effect of Environmental Laws on its business, operations and properties, 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, each Teekay Entity has reasonably concluded that such associated costs and liabilities would not, individually or in the aggregate, have a Material Adverse Effect.
(mm) Intellectual Property. Each of the Teekay Entities owns or possess' rights to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, technology, know-how and other intellectual property necessary for the conduct of their respective businesses, except where the failure to possess such rights could not reasonably be expected to have a Material Adverse Effect, and the Teekay Parties believe that the conduct by the Teekay Entities of their respective businesses will not conflict with, and the Teekay Entities have not received any notice of any claim of conflict with, any such rights of others.
(nn) No Distribution of Other Offering Materials. None of the Teekay Entities has distributed and, prior to the later to occur of (i) the Closing Date and (ii) completion of the distribution of the Units, will not distribute, any prospectus (as defined under the Act) in connection with the offering and sale of the Units other than the Registration Statement, any Preliminary Prospectus, the Prospectus or other materials, if any, permitted by the Act, including Rule 134 under the Act.
(oo) NYSE Listing. The Units have been approved for listing on the New York Stock Exchange ("NYSE"), subject only to official notice of issuance.
(pp) Investment Company/Public Utility Holding Company. None of the Teekay Entities is now, and after the sale of the Units to be sold by the Partnership hereunder and application of the net proceeds from such sale as described in the Prospectus under the caption "Use of Proceeds" and after giving effect to the Offering will be, (i) an "investment company" or a company "controlled by" an "investment company" within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations thereunder (the "1940 ACT") or (ii) a "public utility company," "holding company" or a "subsidiary company" of a "holding company" under the Public Utility Holding Company Act of 1935, as amended.
(qq) Passive Foreign Investment Company. To the best knowledge of the Teekay Parties, the Partnership is not a Passive Foreign Investment Company ("PFIC") within the meaning of Section 1296 of the Code.
(rr) Tax Passthrough Status. None of the Teekay Entities has elected to be treated as a corporation for United States federal income tax purposes. Each of the Teekay Entities has properly elected not to be treated as a corporation for United States federal income tax purposes (other than any Teekay Entity that is classified other than as a corporation without regard to whether it makes an election).
(ss) Foreign Corrupt Practices Act. No Teekay Entity nor any director, officer, agent, employee or affiliate of any Teekay Entity, is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices Act of 1977, as amended (such act, including the rules and regulations thereunder, the FCPA"), including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any "foreign official" (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and each of the Teekay Entities and its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
(tt) Sanctions Laws and Regulations. Neither the sale of the Units by the Partnership 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 Units, to violate the Trading With the Enemy Act, as amended, the International Emergency Economic 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.
(uu) OFAC. None of the Teekay Entities is, and, to the knowledge of the Teekay Parties, no director, officer, agent, employee or affiliate of any of the Teekay Entities is, currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department ("OFAC"); and the Teekay Entities will not directly or indirectly use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(vv) Money Laundering Laws. The operations of the Teekay Entities are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the "MONEY LAUNDERING LAWS") and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving any of the Teekay Entities with respect to the Money Laundering Laws is pending or, to the best knowledge of the Teekay Parties, threatened.
(ww) Brokers. Except as described in the Prospectus, there are no contracts, agreements or understandings between any Teekay Entity and any person that would give rise to a valid claim against any Teekay Entity or any Underwriter for a brokerage commission, finder's fee or other like payment in connection with this offering of the Units.
(xx) Market Stabilization. None of the Teekay Entities has taken, directly or indirectly, any action designed to or that would constitute or that might reasonably be expected to cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Partnership to facilitate the sale or resale of the Units.
(yy) Prohibition on Dividends. Except as provided in the Credit Agreement and by Section 40 of the Marshall Islands Limited Liability Company Act of 1996, neither the Operating Company nor any Operating Subsidiary is prohibited, directly or indirectly, from paying any dividends to the Partnership or the Operating Company, as the case may be, from making any other distribution on such subsidiary's equity securities, from repaying to the Partnership or the Operating Company any loans or advances to such subsidiary from the Partnership or the Operating Company or from transferring any of such subsidiary's property or assets to the Partnership, the Operating Company or any other subsidiary of the Partnership.
(zz) Statistical and Market Data. The statistical and market-related data included in the Prospectus and the Registration Statement are based on or derived from sources which the Teekay Parties believe to be reliable and accurate.
Any certificate signed by any officer of any Teekay Entity and delivered to the Underwriters or to counsel for the Underwriters in connection with the closing of the Offering shall be deemed a representation and warranty by such Teekay Entity, as to matters covered thereby, to each Underwriter.
(a) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Partnership agrees to sell to each Underwriter, and each Underwriter agrees, severally and not jointly, to purchase from the Partnership, at a purchase price of $_______ per Unit, the amount of the Firm Units set forth opposite such Underwriter's name on Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the representations and warranties herein set forth, the Partnership hereby grants an option to the Underwriters to purchase, severally and not jointly, up to 600,000 Option Units at the same purchase price per Unit as the Underwriters shall pay for the Firm Units. Said option may be exercised only to cover over-allotments in the sale of the Firm Units by the Underwriters. Said option may be exercised in whole or in part at any time and from time to time on or before the 30th day after the date of the Prospectus upon written or telegraphic notice by the Underwriters to the Partnership setting forth the number of Option Units as to which the several Underwriters are exercising the option and the settlement date. The number of Option Units to be purchased by each Underwriter shall be the same percentage of the total number of Option Units to be purchased by the several Underwriters as such Underwriter is purchasing of the Firm Units,
subject to such adjustments as Citigroup Global Markets Inc. in its absolute discretion shall make to eliminate any fractional Units.
3. Delivery and Payment. Delivery of and payment for the Firm Units and the Option Units (if the option provided for in Section 2(b) hereof shall have been exercised on or before the third Business Day prior to the Closing Date) shall be made at _____ AM, New York City time, on _____, 2005 at the offices of Perkins Coie LLP, Portland, Oregon, or at such time on such later date not more than three Business Days after the foregoing date as Citigroup Global Markets Inc. shall designate, which date and time may be postponed by agreement between Citigroup Global Markets Inc. and the Partnership or as provided in Section 9 hereof (such date and time of delivery and payment for the Units being herein called the "CLOSING DATE"). Delivery of the Units shall be made to Underwriters for their respective accounts against payment by the several Underwriters of the purchase price thereof to or upon the order of the Partnership by wire transfer payable in same-day funds to an account specified by the Partnership. Delivery of the Units shall be made through the facilities of The Depository Trust Company ("DTC") unless Citigroup Global Markets Inc. shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after the third Business Day prior to the Closing Date, the Partnership will deliver the Option Units (at the expense of the Partnership) to Citigroup Global Markets Inc., at 388 Greenwich Street, New York, New York, on the date specified by Citigroup Global Markets Inc. (which shall be within three Business Days after exercise of said option) for the respective accounts of the several Underwriters against payment by the Underwriters of the purchase price thereof to or upon the order of the Partnership by wire transfer payable in same-day funds to an account specified by the Partnership. Delivery of the Option Units shall be made through the facilities of DTC unless Citigroup Global Markets Inc. shall otherwise instruct. If settlement of the Option Units occurs after the Closing Date, the Partnership will deliver to the Underwriters on the Option Closing Date for the Option Units, and the obligation of the Underwriters to purchase the Option Units shall be conditioned upon receipt of, supplemental opinions, certificates and letters confirming as of such date the opinions, certificates and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Units for sale to the public as set forth in the Prospectus.
5. Agreements. Each of the Teekay Parties, jointly and severally, agrees with the several Underwriters that:
(a) Preparation of Prospectus and Registration Statement. The Teekay
Parties will use their best efforts to cause the Registration Statement, if not
effective at the Execution Time, and any amendment thereof, to become effective.
Prior to the termination of the offering of the Units, the Partnership will not
file any amendment of the Registration Statement or supplement to the Prospectus
or any Rule 462(b) Registration Statement unless the Partnership has furnished
you a copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective pursuant
to Rule 430A, or filing of the Prospectus is otherwise required under Rule
424(b), the Partnership will cause the
Prospectus, properly completed, and any supplement thereto to be filed in a form approved by Citigroup Global Markets Inc. with the Commission pursuant to the applicable paragraph of Rule 424(b) within the time period prescribed and will provide evidence satisfactory to Citigroup Global Markets Inc. of such timely filing. The Partnership will promptly advise Citigroup Global Markets Inc. (i) when the Registration Statement, if not effective at the Execution Time, shall have become effective, (ii) when the Prospectus, and any supplement thereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b) or when any Rule 462(b) Registration Statement shall have been filed with the Commission, (iii) when, prior to termination of the offering of the Units, any amendment to the Registration Statement shall have been filed or become effective, (iv) of any request by the Commission or its staff for any amendment of the Registration Statement, or any Rule 462(b) Registration Statement, or for any supplement to the Prospectus or for any additional information, (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the institution or threatening of any proceeding for that purpose and (vi) of the receipt by the Partnership of any notification with respect to the suspension of the qualification of the Units for sale in any jurisdiction or the institution or threatening of any proceeding for such purpose. The Partnership will use its best efforts to prevent the issuance of any such stop order or the suspension of any such qualification and, if issued, to obtain as soon as possible the withdrawal thereof.
(b) Filing of Amendment or Supplement. If, at any time when a prospectus relating to the Units is required to be delivered under the Act, any event occurs as a result of which the Prospectus as then supplemented would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein in the light of the circumstances under which they were made not misleading, or if it shall be necessary to amend the Registration Statement or supplement the Prospectus to comply with the Act or the rules thereunder, the Partnership promptly will (i) notify Citigroup Global Markets Inc. of any such event, (ii) prepare and file with the Commission, subject to the second sentence of paragraph (a) of this Section 5, an amendment or supplement which will correct such statement or omission or effect such compliance, and (iii) supply any supplemented Prospectus to you in such quantities as you may reasonably request.
(c) Reports to Unitholders. As soon as practicable, but in any event not later than 90 days after the close of the period covered thereby, the Partnership will make generally available to its unitholders and to Citigroup Global Markets Inc. an earnings statement or statements of the Teekay Entities (excluding the General Partner) which will satisfy the provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) Copies of Reports. The Partnership will furnish or make available via the Commission's Electronic Data Gathering Analysis and Retrieval (EDGAR) System to its unitholders annual reports containing financial statements audited by independent public accountants and quarterly reports containing financial statements and financial information which may be unaudited. The Partnership will, for a period of two years from the Closing Date, furnish or make available via the Commission's Electronic Data Gathering Analysis and Retrieval (EDGAR) System, to the Underwriter a copy of each annual report, quarterly report, current report and all other documents, reports and information furnished by the Partnership to holders of Units (excluding any periodic income tax reporting materials) or filed with any
securities exchange or market pursuant to the requirements of such exchange or market or with the Commission pursuant to the Act or the Exchange Act (other than any annual CEO certification and annual written affirmations to the NYSE).
(e) Signed Copies of the Registration Statement. The Partnership has furnished to Citigroup Global Markets Inc. and counsel for the Underwriters photocopies of signed copies of the Registration Statement (including exhibits thereto).
(f) Qualification of Securities. The Partnership will arrange, if necessary, for the qualification of the Units for sale under the laws of such jurisdictions as the Underwriters may reasonably designate and will maintain such qualifications in effect so long as reasonably required for the distribution of the Units; provided that in no event shall the Partnership be obligated to qualify to do business in any jurisdiction where it is not now so qualified or to take any action that would subject it to service of process in suits, other than those arising out of the offering or sale of the Units, in any jurisdiction where it is not now so subject. The Partnership will, from time to time, prepare and file such statements and reports as are or may be reasonably required of it to continue such qualifications in effect for so long a period as the Underwriters may reasonably request for the distribution of the Units.
(g) Lock-up Period; Lock-up Letters. The Teekay Entities will not, without the prior written consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge, or otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the Teekay Entities or any affiliated company of the Teekay Entities, directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act and the rules and regulations of the Commission promulgated thereunder with respect to, any Common Units or any securities convertible into, or exercisable, or exchangeable for, Common Units, or publicly announce an intention to effect any such transaction, for a period of 90 days after the date of this Agreement (the "RESTRICTED PERIOD"); provided, however, that the Partnership may grant restricted units or options to purchase Common Units under the Partnership's 2005 Long-Term Incentive Plan. If (1) during the last 17 days of the Restricted Period any of the Teekay Entities issues an earnings release or announces material news or the occurrence of a material event relating to any of the Teekay Entities or (2) prior to the expiration of the Restricted Period any of the Teekay Entities announces that it will release earnings results during the 16 day period beginning on the last day of the Restricted Period, then the foregoing restrictions shall continue to apply until the expiration of the 18 day period beginning on the issuance of the earnings release or the announcement of the material news or material event.
(h) Compliance with Sarbanes-Oxley Act. Each of the Teekay Entities will comply in all material respects with all applicable provisions of the Sarbanes-Oxley Act of 2002.
(i) Price Manipulation. The Teekay Entities will not take, directly or indirectly, any action designed to or that would constitute or that could reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or manipulation of the price of any security of the Partnership to facilitate the sale or resale of the Units.
(j) Expenses. The Partnership agrees to pay the costs and expenses
relating to the following matters: (i) the preparation, printing or reproduction
and filing with the Commission of the Registration Statement (including
financial statements and exhibits thereto), each Preliminary Prospectus, the
Prospectus, and each amendment or supplement to any of them; (ii) the printing
(or reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Registration
Statement, each Preliminary Prospectus, the Prospectus, and all amendments or
supplements to any of them, as may, in each case, be reasonably requested for
use in connection with the offering and sale of the Units; (iii) the
preparation, printing, authentication, issuance and delivery of certificates for
the Units, including any stamp or transfer taxes in connection with the original
issuance and sale of the Units; (iv) the printing (or reproduction) and delivery
of this Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of the
Units; (v) the registration of the Units under the Exchange Act and the listing
of the Units on the NYSE; (vi) any registration or qualification of the Units
for offer and sale under the securities or blue sky laws of the several states
(including filing fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such registration and qualification); (vii) any filings
required to be made with the National Association of Securities Dealers, Inc.
("NASD") (including filing fees); (viii) the transportation and other expenses
incurred by or on behalf of Partnership representatives in connection with
presentations to prospective purchasers of the Units; (ix) the fees and expenses
of the Partnership's accountants and the fees and expenses of counsel (including
local and special counsel) for the Partnership; and (x) all other costs and
expenses of the Partnership or the Teekay Entities incident to the performance
by them of their obligations hereunder. Notwithstanding the foregoing, it is
understood that, except as expressly provided in this subsection (j), and
Section 7 and 8 hereof, the Underwriters will pay all of their own costs and
expenses, including without limitation, fees and disbursements of their counsel,
transfer taxes on the resale by them of any of the Units, the transportation and
other expenses incurred by or on their behalf in connection with presentations
to potential purchasers of Units and any advertising expenses relating to offers
of Units they may make.
(k) Use of Proceeds. The Teekay Entities will use the net proceeds received by them from the sale of the Units in the manner specified in the Prospectus under "Use of Proceeds."
(l) Investment Company; PFIC. For a period of five years after the
Closing Date or, if later, the Option Closing Date, the Partnership will use its
best reasonable efforts to ensure that (i) no Teekay Entity, nor any subsidiary
thereof, shall become an "investment company" as defined in the 1940 Act, and
(ii) the Partnership shall not become a PFIC.
(m) Sanctions Laws and Regulations. The Partnership will not take, and will cause each subsidiary not to take, directly or indirectly, any action that could reasonably be expected to 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 Units hereunder. Further, the Partnership will not use, and will cause each subsidiary not to use, the proceeds from the sale of the Units,
directly or indirectly, for any purpose or activity that would cause the Underwriters or any purchaser of the Units 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.
6. Conditions to the Obligations of the Underwriters. The obligations of the Underwriters to purchase the Firm Units and the Option Units, as the case may be, shall be subject to the accuracy of the representations and warranties on the part of the Teekay Parties contained herein as of the Execution Time, the Closing Date and any Option Closing Date pursuant to Section 3 hereof, to the accuracy of the statements of the Teekay Parties made in any certificates delivered pursuant to the provisions hereof, to the performance by the Teekay Parties of their obligations hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to the Execution Time, unless the Underwriters agree in writing to a later time, the Registration Statement will become effective not later than (i) 6:00 PM New York City time on the date of determination of the public offering price, if such determination occurred at or prior to 3:00 PM New York City time on such date or (ii) 9:30 AM on the Business Day following the day on which the public offering price was determined, if such determination occurred after 3:00 PM New York City time on such date; if filing of the Prospectus, or any supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and any such supplement, will be filed in the manner and within the time period required by Rule 424(b); and no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or threatened.
(b) All corporate, partnership and limited liability company proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Operative Agreements, the Purchase Agreement, the Registration Statement and the Prospectus, and all other legal matters relating to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all material respects to counsel for the Underwriters, and the Partnership shall have furnished to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.
(c)(1) The Partnership shall have requested and caused Watson, Farley & Williams (New York) LLP, special Marshall Islands counsel for the Partnership, to have furnished to you their written opinion, dated the Closing Date and addressed to you, in form and substance reasonably satisfactory to the Underwriters, to the effect that:
(i) The Partnership. The Partnership has been duly formed and is validly existing in good standing as a limited partnership under the law of the Republic of The Marshall Islands, and has the limited partnership power and authority to own or lease its properties and to conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus.
(ii) The General Partner and the Operating Company. Each of the General Partner and the Operating Company has been duly formed and is validly existing
in good standing as a limited liability company under the law of the Republic of The Marshall Islands, and each has the limited liability company power and authority to own or lease its properties and to conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus.
(iii) Operating Subsidiaries. Each of the subsidiaries of the Partnership listed on Schedule III (the "MARSHALL ISLANDS SUBSIDIARIES") is validly existing in good standing as a limited liability company under the law of the Republic of The Marshall Islands, and each has the limited liability company power and authority to own or lease its properties and to conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus.
(iv) Ownership of the General Partner Interest in the Partnership. The General Partner is the sole general partner of the Partnership with a 2% general partner interest in the Partnership; such general partner interest has been duly authorized and validly issued in accordance with the Partnership Agreement; and, to counsel's knowledge, the General Partner owns its general partner interest free and clear of all Liens (except for restrictions on transferability contained in the Partnership Agreement, as described in the Prospectus or under applicable securities laws).
(v) Ownership of the Sponsor Units and the Incentive Distribution Rights. TSC owns the Sponsor Units and the General Partner owns all of the Incentive Distribution Rights; all of such Sponsor Units, the Incentive Distribution Rights and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnership Agreement, and are fully paid (to the extent required under the Partnership Agreement) and nonassessable; and to counsel's knowledge, TSC owns the Sponsor Units and the General Partner owns the Incentive Distribution Rights, in each case free and clear of all Liens (except, with respect to the Incentive Distribution Rights, restrictions on transferability as described in the Prospectus or under applicable law).
(vi) Valid Issuance of the Firm Units. The Common Units to be issued and sold to the Underwriters by the Partnership pursuant to this Agreement and the limited partner interests represented by such Common Units have been duly authorized by the Partnership Agreement and, when issued and delivered to the Underwriters against payment therefor in accordance with the terms of this Agreement, will be validly issued, fully paid (to the extent required under the Partnership Agreement) and nonassessable; and other than the Sponsor Units and the Incentive Distribution Rights, the Common Units will be the only limited partner interests of the Partnership issued and outstanding at the Closing Date other than any awards made under the Partnership's 2005 Long-Term Incentive Plan.
(vii) Ownership of the General Partner. TSC directly owns a 100% membership interest in the General Partner; such membership interest has been duly authorized and validly issued in accordance with the General Partner LLC Agreement and is fully paid (to the extent required under the General Partner LLC Agreement) and nonassessable;
and, to counsel's knowledge, TSC directly owns such membership interest free and clear of all Liens.
(viii) Ownership of the Operating Company. The Partnership owns a 100% membership interest in the Operating Company; such membership interest has been duly authorized and validly issued in accordance with the Operating Company LLC Agreement and is fully paid (to the extent required under the Operating Company LLC Agreement) and nonassessable; and, to counsel's knowledge, the Partnership owns such membership interest free and clear of all Liens other than Liens pursuant to the credit agreements and related security agreements disclosed or referred to in the Prospectus.
(ix) Ownership of the Marshall Island Subsidiaries. The Operating Company owns, directly or indirectly, 100% of the membership interest in each Marshall Islands Subsidiary; such membership interests have been duly authorized and validly issued in accordance with the limited liability company agreement of each Marshall Islands Subsidiary and are fully paid (to the extent required under each Marshall Islands Subsidiary's limited liability company agreement) and nonassessable; and, to counsel's knowledge, the Operating Company owns such membership interests free and clear of all Liens other the Liens pursuant to the credit agreements and related security agreements disclosed or referred to in the Prospectus. Immediately following the closing of the acquisition of the Acquisition Subsidiaries according to the terms and conditions set forth in the Purchase Agreement, the Operating Company will own, directly or indirectly, 100% of the membership interest in each of the Acquisition Subsidiaries; such membership interests will be duly authorized and validly issued in accordance with the limited liability company agreement of each Acquisition Subsidiary and will be fully paid (to the extent required under each Acquisition Subsidiary's limited liability company agreement) and nonassessable; and to our knowledge, the Operating Company owns such membership interests free and clear of all Liens other than Liens pursuant to the credit agreements and related security agreements disclosed or referred to in the Prospectus.
(x) No Preemptive Rights or Options. Except as described in the
Prospectus, there are no preemptive rights or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of, (i) any
limited partner interests in the Partnership, (ii) any membership interests
in the General Partner or the Operating Company or (iii) any equity
interests in any Marshall Islands Subsidiary, in each case pursuant to the
limited partnership agreement, limited liability company agreement or other
organizational documents of such entity. To the knowledge of such counsel
and except as described in the Prospectus, there are no outstanding options
or warrants to purchase (A) any Common Units, Subordinated Units, Incentive
Distribution Rights or other interests in the Partnership, (B) any
membership interests in the General Partner or the Operating Company, or
(C) any equity interests in any Marshall Islands Subsidiary.
(xi) No Registration Rights. To the knowledge of such counsel and except for rights waived by TSC, neither the filing of the Registration Statement nor the offering or sale of the Units as contemplated by this Agreement gives rise to any rights
for or relating to the registration of any securities of any of the General Partner, the Partnership, the Operating Company or the Marshall Islands Subsidiaries (except, in the case of the Partnership, with respect to the Common Units as contemplated by the Registration Statement).
(xii) Authority and Authorization. The Partnership has all requisite limited partnership power and authority to issue, sell and deliver the Units in accordance with and upon the terms and conditions set forth in this Agreement, the Registration Statement and the Prospectus and to acquire the membership interest in each of the Acquisition Subsidiaries pursuant to the terms of the Purchase Agreement. All corporate, limited partnership and limited liability company action, as the case may be, required to be taken by the Teekay Parties or any of their respective stockholders, partners or members pursuant to the law of the Republic of The Marshall Islands for the authorization, issuance, sale and delivery of the Common Units and the consummation of the transactions contemplated by this Agreement and the Purchase Agreement has been validly taken.
(xiii) Due Execution and Delivery of the Underwriting Agreement. This Agreement has been duly authorized, validly executed and delivered by each of the Teekay Parties.
(xiv) Enforceability of Teekay Parties Operative Agreements. Each Teekay Party's Operative Agreement constitutes a valid and legally binding obligation of each Teekay Party, enforceable against each such Teekay Party in accordance with its respective terms, except that (i) the enforceability thereof may be limited by applicable bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors' rights generally and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and (ii) the indemnity, contribution and exoneration provisions contained in any of such agreements may be limited by applicable laws and public policy.
(xv) Purchase Agreement. The Purchase Agreement has been duly authorized, validly executed and delivered by the Partnership.
(xvi) No Conflicts. None of the offering, issuance and sale by the Partnership of the Common Units, the execution, delivery and performance of this Agreement or the Purchase Agreement, or the consummation of the transactions contemplated hereby and thereby (i) conflicts or will conflict with or constitutes or will constitute a violation of any Teekay Party's Operative Agreement,
(ii) conflicts or will conflict with or constitutes or will constitute a breach or violation of, or a default under (or an event which, with notice or lapse of time or both, would constitute such a default), any agreement governed by the law of the Republic of The Marshall Islands filed as an exhibit to the Registration Statement, (iii) violates or will violate any statute, law, rule, regulation, judgment, order or decree known to such counsel of any court, regulatory body, administrative agency, governmental body, arbitrator or other authority situated in, the Republic of The Marshall Islands, or (iv) to our knowledge results or will result in the creation or imposition of any Lien upon any property or assets of any of the Teekay Parties.
(xvii) No Consents. No consent (as such term is defined in
Section 1(s) hereof) under the law of the Republic of The Marshall Islands
is required for the offering, issuance and sale by the Partnership of the
Units, the execution, delivery and performance of this Agreement or the
Purchase Agreement or the consummation of the transactions contemplated by
this Agreement or the Purchase Agreement.
(xviii) Permits. To the knowledge of such counsel, no permits (as such term is defined in Section 1(bb) hereof) of, or declarations or filings with, any governmental or regulatory authorities of the Republic of The Marshall Islands are required for any of the Teekay Parties to own or lease its properties and to conduct its business in the manner described in the Prospectus.
(xix) Vessel Registration. Each of the vessels listed on Schedule A hereto is registered in the sole ownership of the entity indicated as the "Owning Entity" of such vessel on such schedule under the law of the Marshall Islands and each such Owning Entity has record title thereto, free and clear of all liens, claims, debts or encumbrances and defects of title of record, except as indicated on such schedule or as described in the Prospectus.
(xx) Accuracy of Statements. The statements in the Registration Statement and Prospectus under the captions "Business -- Regulation -- International Maritime Organization (or IMO)," "Business -- Regulation -- Environmental Regulations -- The United States Oil Pollution Act of 1990 (or OPA 90)," "Business -- Regulation -- Environmental Regulations -- Other Environmental Initiatives," "Business -- Taxation of the Partnership -- Marshall Islands Taxation," "Conflicts of Interest and Fiduciary Duties" and "The Partnership Agreement" and "Service of Process and Enforcement of Civil Liabilities," insofar as they constitute descriptions of agreements, fairly describe in all material respects the portions of the agreements addressed thereby, and insofar as they purport to constitute summaries of law or legal conclusions, fairly describe in all material respects the portions of the statutes and regulations addressed thereby.
(xxi) Negative Assurance. Although we have not independently verified, are not passing on, and are not assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement and the Prospectus under the captions "Business -- Regulation -- International Maritime Organization (or IMO)," "Business-Regulation-Environmental Regulations -- The United States Oil Pollution Act of 1990 (or OPA 90)," "Business -- Regulation -- Environmental Regulations -- Other Environmental Initiatives," "Business -- Taxation of the Partnership -- Marshall Islands Taxation," "Conflicts of Interest and Fiduciary Duties," "The Partnership Agreement-Limited Liability" and "Service of Process and Enforcement of Civil Liabilities" (except to the extent specified in the foregoing opinion), no facts have come to such counsel's attention that lead such counsel to believe that the above-referenced sections of the Registration Statement, as of its effective date, 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 or that the above-referenced sections of the Prospectus, as of its issue date and the Closing Date, contains or contained an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
(xxii) Tax Opinion. The opinion of Watson, Farley & Williams that is filed as Exhibit 8.2 to the Registration Statement is confirmed and the Underwriters may rely upon such opinion as if it were addressed to them.
(xxiii) Choice of Law. The choice of New York law to govern this Agreement constitutes a valid choice of law under the law of the Republic of The Marshall Islands.
(xxiv) Non-Exclusive Jurisdiction. The submission by the Partnership to the non-exclusive jurisdiction of any Federal or state court in the Borough of Manhattan, The City of New York, is a valid submission under the law of the Republic of The Marshall Islands.
(xxv) Enforcement of Judgments. A judgment granted by a foreign court against the Partnership may be enforced in the Republic of The Marshall Islands without a retrial on the merits of the matter provided that: (i) the judgment is for a sum of money and is final in the jurisdiction granting the judgment; (ii) the court granting the judgment had jurisdiction under the laws of the place where it sat and the judgment does not offend principles of the Republic of The Marshall Islands as to due process, propriety or public order, and (iii) the defendant was actually present in person or by a duly appointed representative and the judgment does not constitute in effect a default judgment.
In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Teekay Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic,
that all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine and (C) state that their opinion is limited to the laws of The Republic of the Marshall Islands and United States federal law.
(c)(2) The Partnership shall have requested and caused Watson, Farley & Williams LLP, special English counsel for the Partnership, to have furnished to you their written opinion, dated the Closing Date and addressed to you, in form and substance reasonably satisfactory to the Underwriters, to the effect that
(i) an English court, applying English conflict of laws rules, would (notwithstanding that neither TSC nor the Partnership have any connection with England or Wales and nor that any of the Acquisition Subsidiaries or the rights and assets sold and purchased under the Purchase Agreement are sited in England and Wales) hold as between TSC and the Partnership that English law is the applicable law of the Purchase Agreement; but in circumstances where the rights or assets are the subject matter of a dispute with a third party or which is referred to the courts of a jurisdiction in which these assets or rights are sited, or in which any of the parties to such dispute are located, an English court, applying English conflict of laws rules, could hold that the effectiveness of the rights and interests created by the Purchase Agreement would be subject to determination in accordance with the laws of the country in which a party to the dispute resides or is formed and/or the law of the country in which the assets or rights are situated.
(ii) no consent of any governmental or official authority in England applicable to companies generally is required in connection with the Purchase Agreement in order for it to be valid or to remain enforceable under English law; and it is not necessary to deliver or register the Purchase Agreement in England or Wales in order to confirm its validity.
(iii) provided that all aspects of the closing of the acquisition of the Acquisition Subsidiaries are effected outside, and none of the related documents are brought into, the United Kingdom, neither the Purchase Agreement nor the transfers of the ownership interests or promissory notes pursuant thereto will be chargeable to United Kingdom stamp duty.
(iv) the provisions of the Purchase Agreement relating to the sale and purchase of ownership interests in and promissory notes issued by the Acquisition Subsidiaries are binding and enforceable obligations. We express no opinion as to the enforceability of the options to be granted to TSC under the terms of the Purchase Agreement or in relation to the warranties and indemnities expressed to be given in the Purchase Agreement.
In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Teekay Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, that all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine and (C) state that their opinion is limited to the laws of England and Wales, and (D) state that they express no opinion with respect to the title of any of the Teekay Entities to any property purported to be transferred by the Purchase Agreement nor with respect to the accuracy or descriptions of real or personal property.
(d) The Partnership shall have requested and caused Perkins Coie LLP, counsel for the Partnership, to have furnished to you their written opinion, dated the Closing Date and addressed to you, in form and substance reasonably satisfactory to the Underwriters, to the effect that:
(i) Description of Investment by Employee Benefit Plans. The statements in the Registration Statement and Prospectus under the caption "Investment in Teekay LNG Partners L.P. by Employee Benefit Plans," insofar as it purports to constitute a summary of law or legal conclusions, fairly describes in all material respects the portions of the statutes and regulations addressed thereby
(ii) Tax Opinion. The opinion of Perkins Coie LLP that is filed as Exhibit 8.1 to the Registration Statement is confirmed and the Underwriters may rely upon such opinion as if it were addressed to them.
(iii) No Options. To the knowledge of such counsel and except as described in the Prospectus, there are no outstanding options or warrants to purchase (A) any Common Units, Subordinated Units, Incentive Distribution Rights or other interests in the Partnership, or (B) any membership interests in the General Partner, the Operating Company, or the Operating Subsidiaries.
(iv) No Registration Rights. To the knowledge of such counsel, there are no contracts, agreements or understandings between any of the Teekay Entities and any person granting such person the right to require any of the Teekay Entities to file a registration statement under the Act with respect to any securities of any of the Teekay Entities owned or to be owned by such person or to require any of the Teekay Entities to include such securities in the securities registered pursuant to the Registration Statement or in any securities being registered pursuant to any other registration statement filed by any Teekay Entity under the Act, except for any such rights held by TSC pursuant to the [Partnership Agreement], which rights have been waived with respect to this Offering.
(v) Accuracy of Statements. The statements in the Registration Statement and Prospectus under the captions "Cash Distribution Policy," "Conflicts of Interest and Fiduciary Duties," "Description of the Common Units," "The Partnership Agreement," "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and Capital Resources -- Credit Facilities," "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and Capital Resources -- Covenants and Other Restrictions in Our Financing Arrangements," "Business -- Time Charters -- General Provisions," "Business -- LNG Time Charters," "Business -- Crude Oil Time Charters" and "Certain Relationships and Related Party Transactions -- Omnibus Agreement," "Certain Relationships and Related Party Transactions -- Advisory and Administrative Services Agreements," "Certain
Relationships and Related Party Transactions -- Joint Venture with an Entity Controlled by Mr. Fernando Tapias," "Certain Relationships and Related Party Transactions -- Agreement to Purchase Suezmax Tankers and Time Charters," "Certain Relationships and Related Party Transactions -- Granada Spirit Charter and Purchase Agreement," and "Certain Relationships and Related Party Transactions -- Agreement to Purchase RasGas II Interest," insofar as they constitute descriptions of agreements, fairly describe in all material respects the portions of the agreements addressed thereby, and the Common Units, the Subordinated Units and the Incentive Distribution Rights conform in all material respects to the descriptions thereof contained in the Registration Statement and the Prospectus under the captions "Summary -- The Offering," "Cash Distribution Policy," "Description of the Common Units" and "The Partnership Agreement"; provided, however, that such counsel need not express any opinion with respect to Marshall Islands law.
(vi) Effectiveness of Registration Statement. The Registration
Statement was declared effective under the Act as of _____, 2005; a Rule
462(b) Registration Statement was filed on ________, 2005 and was
immediately effective upon filing; the Prospectus was filed with the
Commission pursuant to Rule 424(b) on _______, 2005 in a manner and within
the time period required by Rule 424(b); and, to the knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued under the Act and no proceedings for that purpose
have been instituted or threatened
(vii) Compliance as to Form. The Registration Statement and the Prospectus (other than the financial statements and other financial and statistical information contained therein, as to which such counsel need not express any opinion) comply as to form in all material respects with the applicable requirements of the Act and the rules thereunder.
(viii) Legal Proceedings or Contracts to be Described or Filed. To the knowledge of such counsel, (i) there is no pending or threatened action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving any Teekay Entity or its property of a character required to be disclosed in the Registration Statement which is not disclosed in the Prospectus as required and (ii) there is no agreement, franchise, contract, indenture, lease or other document or instrument of a character that are required to be described in the Registration Statement or the Prospectus by the Act or to be filed by the Act as exhibits to the Registration Statement that are not described or filed as required.
(ix) Investment Company. No Teekay Entity is an "investment company" as such term is defined in the Investment Company Act of 1940, as amended.
In addition, such counsel shall state that, in the course of such counsel's participation, as counsel to the Partnership, in the preparation of the Registration Statement and the Prospectus, such counsel has examined information available to it, including legal records,
documents and proceedings, and has attended conferences with, among others, representatives of the Underwriters, officers and other representatives of the Teekay Entities and the independent public accountants for the Partnership, at which conferences the contents of the Registration Statement and the Prospectus were discussed. Such counsel shall also state that, without undertaking to determine independently or assuming any responsibility for the accuracy, completeness or fairness of the statements contained in the Registration Statement or the Prospectus, such counsel has no reason to believe that the Registration Statement, as of its effective date, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading; or that the Prospectus, as of its issue date or as of the Closing Date, contained or contains any untrue statement of a material fact or omitted or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (except that such counsel need not express any opinion or belief with respect to (i) any financial statements, including the notes and schedules thereto and the auditor's reports, if any thereon or (ii) other financial or statistical data included in the Registration Statement or the Prospectus).
(e) The Partnership shall have requested and caused Arthur Bensler, Senior Vice President and General Counsel for TSC, to have furnished to you a letter, dated the Closing Date and addressed to you, in form and substance reasonably satisfactory to the Underwriters, which shall state that such counsel has participated in conferences with officers and other representatives of the Teekay Entities and the independent public accountants of the Partnership and your representatives, at which the contents of the Registration Statement and the Prospectus and related matters were discussed, and although such counsel has not independently verified, is not passing on, and is not assuming any responsibility for the accuracy, completeness or fairness of the statements contained in, the Registration Statement and the Prospectus, no facts have come to such counsel's attention that lead such counsel to believe that the Registration Statement (other than (i) the financial statements included therein, including the notes and schedules thereto and the auditors' reports thereon, and (ii) the other financial and statistical information included therein, as to which such counsel need not comment), as of its effective date 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, or that the Prospectus (other than (i) the financial statements included therein, including the notes and schedules thereto and the auditors' reports thereon, and (ii) the other financial and statistical information included therein, as to which such counsel need not comment), as of its issue date and the Closing Date contained or contains an untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(f) The Partnership shall have requested and caused Noble & Scheidecker, special Luxembourg counsel for the Partnership, to have furnished to you their written opinion, dated the Closing Date and addressed to you, in form and substance reasonably satisfactory to the Underwriters, to the effect that:
(i) Luxco. Luxco is a company duly incorporated and validly existing under the laws of Grand-Duchy of Luxembourg ("Luxembourg") and has all requisite
corporate capacity and power to acquire and own securities and or participations in Luxembourg or foreign corporations and to own or lease its properties and conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus.
(ii) Ownership of Luxco. The issued capital of Luxco consists of 1,500 (one thousand five hundred) shares, all of which are held by the Operating Company. All the issued shares of capital stock of Luxco have been duly authorized, validly issued, fully subscribed for in cash and are not assessable. To such counsel's knowledge, all of the shares of capital stock of Luxco are free of all liens, other than those liens described in the Agreement dated February 22, 2001, entered into by, amongst others, Naviera Teekay Gas S.L., as Borrower, and the several banks and financial institutions named therein.
(iii) Preemptive Rights and Warrants. To such counsel's knowledge, no warrant or other options to acquire exists with respect to any shares of capital stock of Luxco. There are no preemptive rights or other rights to subscribe for or to purchase any equity interests in Luxco pursuant to the Articles of Association of Luxco, issued by Maitre Joseph Elvinger, notary public in Luxembourg (the "Articles"). Pursuant to Article Ten of the Articles, Luxco's shares may not be transferred to third parties (i.e. outside the realm of its shareholders) unless shareholder representing three-quarters of the corporate capital of Luxco have agreed thereto in a general meeting of shareholders.
In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Teekay Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, that all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, and (C) state that their opinion is limited to the laws of Luxembourg.
(g) The Partnership shall have requested and caused PricewaterhouseCoopers, special Luxembourg tax advisor to the Partnership, to have furnished to you their written analysis, dated the Closing Date and addressed to you, in form and substance reasonably satisfactory to the Underwriters, to the effect that such advisor confirms that the discussion contained in the Prospectus under the caption "Business -- Taxation of the Partnership -- Luxembourg Taxation" is an accurate discussion of Luxembourg tax matters (except for the representations and statements of fact of the Partnership included in such discussion, as to which such advisor need not comment).
In rendering such analysis, such advisor may (A) rely in respect of matters of fact upon certificates of officers and employees of the Teekay Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, that all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, and (C) state that their analysis is limited to the laws of Luxembourg.
(h) The Partnership shall have requested and caused Uria & Menendez, special Spanish counsel for the Partnership, to have furnished to you their written opinion, dated the Closing Date and addressed to you, in form and substance reasonably satisfactory to the Underwriters, to the effect that:
(i) Formation of Spanish Subsidiaries. Each of the subsidiaries of the Partnership listed on Schedule IV (the "SPANISH SUBSIDIARIES") was duly incorporated and is validly existing as private limited liability company (Sociedad de responsabilidad limitada) under the laws of Spain. Each of the Spanish Subsidiaries has corporate power to own or lease its properties and to conduct its business, in each case in all material respects as described in the Registration Statement and the Prospectus.
(ii) Ownership of Spanish Subsidiaries. All of the created units of stock of capital of each Spanish Subsidiary have been validly created and, assuming creation against payment therefore, are fully paid. All of the units of stock of corporate capital of the Spanish Subsidiaries are owned, directly or indirectly, by the Operating Company free and clear of all Liens, other than the pledges set for on Exhibit A (the "SPANISH PLEDGES"). To counsel's knowledge, there are no outstanding rights, warrants or options to acquire, or instruments convertible or exchangeable for, any units of stock of any Spanish Subsidiary.
(iii) No Preemptive Rights or Options. There are no preemptive rights or other rights to subscribe for or to purchase, nor any restriction upon the voting or transfer of any shares of capital stock of any Spanish Subsidiary other than those set forth in the Spanish Private Limited Liability Companies Act (Ley 2/1995, de 23 de marzo, de Sociedades de Responsabilidad Limitada), in the Spanish Pledges, the Spanish credit agreements of Naviera Teekay Gas III, S.L. and Naviera Teekay Gas IV, S.L. ("Spanish Credit Agreement") and in the Credit Agreement.
(iv) Permits. To the knowledge of such counsel after due inquiry, each of the Spanish Subsidiaries has such permits of governmental or regulatory authorities of Spain as are necessary to own or lease its properties and to conduct its business, subject to such qualifications as may be set forth in the Operating Subsidiaries' Organizational Documents and except for such permits which, if not obtained, reasonable could not, individually or in the aggregate, have a material adverse effect upon the ability or the Partnership and its subsidiaries, taken as a whole, to conduct their businesses in all material respects in the manner described in the Prospectus; and, to the knowledge of such counsel after due inquiry, none of the Spanish Subsidiaries has received any notice of proceedings in Spain relating to the revocation or modification of any such permits which, individually or in the aggregate could reasonably be expected to have a material adverse effect upon the ability of the Partnership and its subsidiaries, taken as a whole, to conduct their businesses in all material respects in the manner described in the Prospectus.
In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Teekay Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic,
that all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, and (C) state that their opinion is limited to the laws of Spain.
(i) The Partnership shall have requested and caused Uria & Menendez, special Spanish tax counsel to the Partnership, to have furnished to you their written opinion, dated the Closing Date and addressed to you, in form and substance reasonably satisfactory to the Underwriters, to the effect that such counsel confirms that the discussion contained in the Prospectus under the caption "Business -- Taxation of the Partnership -- Spanish Taxation" is an accurate discussion of relevant Spanish tax matters (except for the representations and statements of fact of the Partnership included in such discussion, as to which such counsel need not comment).
In rendering such opinion, such advisor may (A) rely in respect of matters of fact upon certificates of officers and employees of the Teekay Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, that all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, and (C) state that their opinion is limited to the laws of Spain.
(j) The Partnership shall have requested and caused Wilson & Partners, special Canadian counsel for the Partnership, to have furnished to you their written opinion, dated the Closing Date and addressed to you, in form and substance reasonably satisfactory to the Underwriters, to the effect that in the opinion of such counsel, the description in the Prospectus under the caption "Business -- Taxation of the Partnership -- Non-United States Tax Consequences -- Canadian Federal Income Tax Consequences" is a fair summary of the material Canadian federal income tax consequences under the Income Tax Act (Canada) to those holders of common units acquired in the offering described therein (except that in such opinion counsel need not address or comment on the representations and statements of fact of the Partnership included in such description including, without limitation, those relating to whether the activities or affairs of the Partnership can or will be conducted in a manner that the Partnership will not be carrying on business in Canada).
In rendering such opinion, such counsel may (A) rely in respect of matters of fact upon certificates of officers and employees of the Teekay Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, that all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, and (C) state that their opinion is limited to the laws of Canada.
(k) The Partnership shall have requested and caused PricewaterhouseCoopers, special Qatari tax advisor to the Partnership, to have furnished to you their written analysis, dated the Closing Date and addressed to you, in form and substance reasonably satisfactory to the Underwriters, to the effect that such advisor confirms that the discussion contained in the Prospectus under the caption "Business -- Taxation of the Partnership -- Qatari Taxation" is an accurate discussion of Qatari tax matters (except for the representations and statements of fact of the Partnership included in such discussion, as to which counsel need not comment).
In rendering such opinion, such advisor may (A) rely in respect of matters of fact upon certificates of officers and employees of the Teekay Entities and upon information obtained from public officials, (B) assume that all documents submitted to them as originals are authentic, that all copies submitted to them conform to the originals thereof, and that the signatures on all documents examined by them are genuine, and (C) state that their analysis is limited to the laws of Qatar.
(l) The Underwriters shall have received from Baker Botts L.L.P., counsel for the Underwriters, such opinion or opinions, dated the Closing Date and addressed to the Underwriters, with respect to such matters as the Underwriters may reasonably require, and the Partnership shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(m) The Underwriters shall have received from Seward & Kissel LLP, special Marshall Islands counsel for the Underwriters, such opinion or opinions, dated the Closing Date and addressed to the Underwriters, with respect to such matters as the Underwriters may reasonably require, and the Partnership shall have furnished to such counsel such documents as they request for the purpose of enabling them to pass upon such matters.
(n) The General Partner shall have furnished to the Underwriters a certificate signed by its principal executive officer and principal financial officer dated the Closing Date and addressed to the Underwriters, to the effect that the signer of such certificate has carefully examined the Registration Statement, the Prospectus, any supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the Teekay Parties in this Agreement are true and correct on and as of the Closing Date with the same effect as if made on the Closing Date and each Teekay Party has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or, to such officer's knowledge, threatened;
(iii) since the date of the most recent financial statements included in the Prospectus (exclusive of any supplement thereto), there has been no material adverse effect on the general affairs, condition (financial or otherwise), results of operations, business, properties, assets or prospects of the Teekay Entities, taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto); and
(iv) such other matters as you may reasonably request.
(o) The Partnership shall have requested and caused Ernst & Young LLP to have furnished to the Underwriters, at the Execution Time and at the Closing Date, letters, dated respectively as of the Execution Time and as of the Closing Date, in form and substance reasonably satisfactory to the Underwriters, confirming that they are independent accountants
with respect to the Teekay Entities within the meaning of the Act and the applicable rules and regulations adopted by the Commission thereunder and stating in effect that:
(i) in their opinion the audited financial statements and financial statement schedules included in the Registration Statement and the Prospectus and reported on by them comply as to form in all material respects with the applicable accounting requirements of the Act and the related rules and regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited financial statements made available by the Partnership and its subsidiaries; carrying out certain specified procedures (but not an examination in accordance with generally accepted auditing standards) which would not necessarily reveal matters of significance with respect to the comments set forth in such letter; a reading of the minutes of the meetings of the members, partners, stockholders, directors, managers and committees of the Teekay Entities; and inquiries of certain officials of the Partnership who have responsibility for financial and accounting matters of the Partnership and its subsidiaries as to transactions and events subsequent to June 30, 2005, nothing came to their attention which caused them to believe that:
(1) said unaudited financial statements are not in conformity with generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included in the Registration Statement and the Prospectus;
(2) (i) with respect to the period subsequent to June 30, 2005, there were any changes, at a specified date not more than five days prior to the date of the letter, in the long-term debt of the Partnership and its subsidiaries or decreases in the consolidated net current assets (working capital) or partners' equity of the Partnership and its subsidiaries as compared with the amounts shown on the June 30, 2005 consolidated balance sheet included in the Registration Statement and the Prospectus, or for the period from July 1, 2005 to such specified date (with respect to the Partnership and its subsidiaries) there were any decreases, as compared with the corresponding period during the preceding year in consolidated net revenues or net income of Luxco, its predecessors and subsidiaries (including, without limitation, Teekay Spain), except in all instances for changes or decreases set forth in such letter, in which case the letter shall be accompanied by an explanation by the Partnership as to the significance thereof unless said explanation is not deemed necessary by the Underwriters; or
(3) the information included in the Registration Statement and Prospectus in response to Form 20-F, Item 3A (Selected Financial Data) and Form 20-F, Item 6B (Compensation) is not in conformity with the applicable disclosure requirements of Form F-1 and Form 20-F;
(iii) they have performed certain other specified procedures as a result of which they determined that certain information of an accounting, financial or statistical
nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Partnership and its subsidiaries) set forth in the Registration Statement and the Prospectus, including the information set forth under the captions "Prospectus Summary -- Summary Historical and Pro Forma Financial and Operating Data," "Capitalization," "Dilution," "Selected Historical and Pro Forma Financial and Operating Data," and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Prospectus, agrees with the accounting records of the Partnership and its subsidiaries, excluding any questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited pro forma financial statements included in the Registration Statement and the Prospectus (the "pro forma financial statements"); carrying out certain specified procedures; inquiries of certain officials of the Teekay Entities who have responsibility for financial and accounting matters; and proving the arithmetic accuracy of the application of the pro forma adjustments to the historical amounts in the pro forma financial statements, nothing came to their attention which caused them to believe that the pro forma financial statements do not comply as to form in all material respects with the applicable accounting requirements of Rule 11-02 of Regulation S-X or that the pro forma adjustments have not been properly applied to the historical amounts in the compilation of such statements.
References to the Prospectus in this paragraph (o) include any supplement thereto at the date of the letter.
(p) Subsequent to the Execution Time or, if earlier, the dates as of which information is given in the Registration Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of any supplement thereto), there shall not have been (i) any change or decrease specified in the letter or letters referred to in paragraph (n) of this Section 6 or (ii) any change, or any development involving a prospective change, in or affecting the general affairs, management, condition (financial or otherwise), stockholders' equity, partners' equity, members' equity, results of operations, business, properties, assets or prospects of the Teekay Entities taken as a whole, whether or not arising from transactions in the ordinary course of business, except as set forth in or contemplated in the Prospectus (exclusive of any supplement thereto) the effect of which, in any case referred to in clause (i) or (ii) above, is, in the sole judgment of the Underwriters, so material and adverse as to make it impractical or inadvisable to proceed with the offering or delivery of the Units as contemplated by the Registration Statement (exclusive of any amendment thereof) and the Prospectus (exclusive of any supplement thereto).
(q) Prior to the Closing Date, the Teekay Entities shall have furnished to the Underwriters such further information, certificates and documents as the Underwriters may reasonably request.
(r) Subsequent to the Execution Time, there shall not have been any decrease in the rating of any of the debt securities of any of the Teekay Entities, if applicable, by any "nationally recognized statistical rating organization" (as defined for purposes of Rule 436(g) under the Act) or any notice given of any intended or potential decrease in any such rating or of a possible change in any such rating that does not indicate the direction of the possible change.
(s) The Units shall have been listed and admitted and authorized for trading on the NYSE subject to official notice of issuance, and satisfactory evidence of such actions shall have been provided to the Underwriters.
(t) At the Execution Time, the Partnership shall have furnished to the Underwriters a letter substantially in the form of Exhibit A hereto from the executive officers and directors of the General Partner addressed to the Underwriters.
If any of the conditions specified in this Section 6 shall not have been fulfilled when and as provided in this Agreement, or if any of the opinions and certificates mentioned above or elsewhere in this Agreement shall not be reasonably satisfactory in form and substance to the Underwriters and counsel for the Underwriters, this Agreement and all obligations of the Underwriters hereunder may be canceled at, or at any time prior to, the Closing Date by the Underwriters. Notice of such cancellation shall be given to the Partnership in writing or by telephone or facsimile confirmed in writing.
7. Reimbursement of Underwriter's Expenses. If the sale of the Units provided for herein is not consummated because any condition to the obligations of the Underwriter set forth in Section 6 hereof is not satisfied, because of any termination pursuant to Section 10 hereof or because of any refusal, inability or failure on the part of the Teekay Parties to perform any agreement herein or comply with any provision hereof other than by reason of a default by any of the Underwriters, the Teekay Parties will reimburse the Underwriters severally through Citigroup Global Markets Inc. on demand for all out-of-pocket expenses (including reasonable fees and disbursements of counsel) that shall have been reasonably incurred by them in connection with the proposed purchase and sale of the Units.
8. Indemnification and Contribution.
(a) The Teekay Parties, jointly and severally, agree to indemnify and hold harmless each Underwriter, the directors, officers, employees and agents of each Underwriter and each person who controls any Underwriter within the meaning of either the Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Act, the Exchange Act or other Federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the registration statement for the registration of the Units as originally filed or in any amendment thereof, or in any Preliminary Prospectus or the Prospectus or in any amendment thereof or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that the Teekay Parties will not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Teekay Parties by or on behalf of any Underwriter specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which the Teekay Parties may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Teekay Parties, each of their respective directors, each of their respective officers who signs the Registration Statement, and each person who controls the Teekay Parties within the meaning of either the Act or the Exchange Act, to the same extent as the indemnity in Section 8(a) from the Teekay Parties to each Underwriter, but only with reference to written information relating to such Underwriter furnished to the Teekay Parties by or on behalf of such Underwriter specifically for inclusion in the documents referred to in the foregoing indemnity. This indemnity agreement will be in addition to any liability which any Underwriter may otherwise have. The Teekay Parties acknowledge that (i) the statements set forth in the last paragraph of the cover page regarding delivery of the Units and, under the heading "Underwriting," (ii) the list of Underwriters and their respective participation in the sale of the Units, (iii) the sentences related to concessions and reallowances, and (iv) the paragraphs related to stabilization, syndicate covering transactions, penalty bids and electronic online distributions constitute the only information furnished in writing by or on behalf of the several Underwriters for inclusion in any Preliminary Prospectus or the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve it from
liability under paragraph (a) or (b) above unless and to the extent it did not
otherwise learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
reasonably satisfactory to the indemnified party. Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ one
separate counsel (in addition to local counsel), and the indemnifying party
shall bear the reasonable fees, costs and expenses of such separate counsel if
(i) the use of counsel chosen by the indemnifying party to represent the
indemnified party would present such counsel with a conflict of interest, (ii)
the actual or potential defendants in, or targets of, any such action include
both the indemnified party and the indemnifying party and the indemnified party
shall have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the institution
of such action or (iv) the indemnifying party shall authorize the indemnified
party to employ separate counsel at the expense of the indemnifying party. An
indemnifying party will not, without the prior written consent of the
indemnified parties (which consent shall not be
unreasonably withheld, conditioned or delayed), settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this Section 8 is unavailable to or insufficient to hold harmless an indemnified party for any reason, the Teekay Parties, severally and jointly, and the Underwriters severally agree to contribute to the aggregate losses, claims, damages and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending same) (collectively "LOSSES") to which one or more of the Teekay Parties and one or more of the Underwriters may be subject in such proportion as is appropriate to reflect the relative benefits received by the Teekay Parties on the one hand and by the Underwriters on the other from the Offering; provided, however, that in no case shall any Underwriter (except as may be provided in any agreement among underwriters relating to the offering of the Units) be responsible for any amount in excess of the underwriting discount or commission applicable to the Units purchased by such Underwriter hereunder. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Teekay Parties and the Underwriters severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Teekay Parties on the one hand and of the Underwriters on the other in connection with the statements or omissions which resulted in such Losses as well as any other relevant equitable considerations. Benefits received by the Teekay Parties shall be deemed to be equal to the total net proceeds from the Offering (before deducting expenses) received by it, and benefits received by the Underwriters shall be deemed to be equal to the total underwriting discounts and commissions, in each case as set forth on the cover page of the Prospectus. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Teekay Parties on the one hand or the Underwriters on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Teekay Parties and the Underwriters agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this paragraph (d), no person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 8, each person who controls an Underwriter within the meaning of either the Act or the Exchange Act and each director, officer, employee and agent of an Underwriter shall have the same rights to contribution as such Underwriter, and each person who controls any of the Teekay Parties within the meaning of either the Act or the Exchange Act, each officer of the Teekay Parties who shall have signed the Registration Statement and each director of the Teekay Parties shall have the same rights to contribution as the Teekay Parties, subject in each case to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters shall fail to purchase and pay for any of the Units agreed to be purchased by such Underwriter or
Underwriters hereunder and such failure to purchase shall constitute a default in the performance of its or their obligations under this Agreement, the remaining Underwriters shall be obligated severally to take up and pay for (in the respective proportions which the amount of Firm Units set forth opposite their names on Schedule I hereto bears to the aggregate amount of Firm Units set forth opposite the names of all the remaining Underwriters) the Units which the defaulting Underwriter or Underwriters agreed but failed to purchase; provided, however, that in the event that the aggregate amount of Units which the defaulting Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of the aggregate amount of Units set forth on Schedule I hereto, the remaining Underwriters shall have the right to purchase all, but shall not be under any obligation to purchase any, of the Units, and if such nondefaulting Underwriters do not purchase all the Units, this Agreement will terminate without liability to any nondefaulting Underwriter or the Teekay Parties. In the event of a default by any Underwriter as set forth in this Section 9, the Closing Date shall be postponed for such period, not exceeding five Business Days, as the Representatives shall determine in order that the required changes in the Registration Statement and the Prospectus or in any other documents or arrangements may be effected. Nothing contained in this Agreement shall relieve any defaulting Underwriter of its liability, if any, to the Teekay Parties and any nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the absolute discretion of the Underwriters, by notice given to the Partnership prior to delivery of and payment for the Units, if at any time prior to such time (i) trading in the Partnership's Common Units shall have been suspended by the Commission or the NYSE, (ii) trading in securities generally on the NYSE shall have been suspended or limited or minimum prices shall have been established on such Exchange, (iii) a banking moratorium shall have been declared either by Federal or New York State authorities or (iv) there shall have occurred any outbreak or escalation of hostilities, declaration by the United States of a national emergency or war, or other calamity or crisis the effect of which on financial markets is such as to make it, in the sole judgment of the Underwriters, impractical or inadvisable to proceed with the offering or delivery of the Units as contemplated by the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective agreements, representations, warranties, indemnities and other statements of the Teekay Parties or their officers and of the Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf of any Underwriter or the Teekay Parties or any of the officers, directors, employees, agents or controlling persons referred to in Section 8 hereof, and will survive delivery of and payment for the Units. The provisions of Sections 7, 8 and 9 hereof shall survive the termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Underwriters, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (212) 816-7912) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 388 Greenwich Street, New York, New York, 10013, Attention:
General Counsel; or, if sent to the Partnership, will be mailed, delivered or
telefaxed to Teekay LNG Partners L.P., TK House, Bayside Executive Park, West
Bay Street and Blake Road, P.O. Box AP-59213, Nassau, Commonwealth of the
Bahamas, Attn. Corporate
Secretary (fax no. 242-502-8840) with a copy to Perkins Coie LLP, 1120 N.W. Couch Street, 10th Floor, Portland, Oregon 97209-4128, Attn: David Matheson (fax no. 503-727-2222).
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed within the State of New York.
15. Judicial Proceedings.
(a) The Teekay Parties irrevocably (i) agree that any legal suit, action or proceeding against the Teekay Parties arising out of or based upon this Agreement, the transactions contemplated hereby or alleged violations of the securities laws of the United States or any state in the United States may be instituted in any New York court, (ii) waive, 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. Each of the Teekay Parties 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, the transactions contemplated hereby or any alleged violation of the securities laws of the United States or any state in the United States which may be instituted in any New York court, 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 Teekay Parties represent and warrant that the Authorized Agent has agreed to act 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 Teekay Parties shall be deemed, in every respect, effective service of process upon the Teekay Parties.
(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 Teekay Parties 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 Teekay Parties agree, 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 Teekay Parties an amount equal to the excess of the dollars so purchased over the sum originally due to the Underwriters hereunder.
16. Counterparts. This Agreement may be signed in one or more counterparts, each of which shall constitute an original and all of which together shall constitute one and the same agreement.
17. Headings. The section headings used herein are for convenience only and shall not affect the construction hereof.
18. No Fiduciary Duty. The Partnership hereby acknowledges that (a) the Underwriters are acting as principal and not as an agent or fiduciary of the Partnership and (b) its engagement of the Underwriters in connection with the Offering is as independent contractors and not in any other capacity. Furthermore, the Partnership agrees that it is solely responsible for making its own judgments in connection with the Offering (irrespective of whether the Underwriters have advised or are currently advising the Partnership on related or other matters).
19. Definitions. The terms which follow, when used in this Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a legal holiday or a day on which banking institutions or trust companies are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Credit Agreement" shall mean the Revolving Credit Facility dated February 22, 2001 among Naviera Teekay Gas, S.L. ("Gas I") as Borrower, the Banks party thereto, J.P. Morgan Europe Limited, as Agent, J.P. Morgan Bank S.A., as Spanish Security Agent, and J.P. Morgan plc and J.P. Morgan Bank S.A., as Arranger, as amended.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus referred to in Section 1(a) above and any preliminary prospectus included in the Registration Statement at the Effective Date that omits Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Units that is first filed pursuant to Rule 424(b) after the Execution Time or, if no filing pursuant to Rule 424(b) is required, shall mean the form of final prospectus relating to the Units included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred to in Section 1(a) above, including exhibits and financial statements, as amended at the Execution Time (or, if not effective at the Execution Time, in the form in which it shall become effective) and, in the event any post-effective amendment thereto or any Rule 462(b) Registration Statement becomes effective prior to the Closing Date, shall also mean such registration statement as so amended or such Rule 462(b) Registration Statement, as the case may be. Such term shall include any Rule 430A Information deemed to be included therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the Act.
"Rule 430A Information" shall mean information with respect to the Units and the offering thereof permitted to be omitted from the Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the registration statement referred to in
Section 1(a) hereof.
If the foregoing is in accordance with your understanding of our agreement, please sign and return to us the enclosed duplicate hereof, whereupon this letter and your acceptance shall represent a binding agreement among the Teekay Parties and the Underwriters.
Very truly yours,
TEEKAY LNG PARTNERS L.P.
By: Teekay GP L.L.C., its general partner
By:________________________________________________
Peter Evensen
Chief Executive Officer and Chief
Financial Officer
TEEKAY GP L.L.C.
By:________________________________________________
Peter Evensen
Chief Executive Officer and Chief
Financial Officer
TEEKAY LNG OPERATING L.L.C.
By: Teekay Shipping Corporation, its sole member
By:________________________________________________
Peter Evensen
Chief Financial Officer, Senior Vice
President and Treasurer
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above.
Citigroup Global Markets Inc.
[co-managers to come]
By: CITIGROUP GLOBAL MARKETS INC.
By:
Title:__________________________________
SCHEDULE A
TEEKAY LNG PARTNERS L.P.
LIST OF VESSELS REGISTERED UNDER THE LAW OF THE REPUBLIC OF THE
MARSHALL ISLANDS
[TO COME]
SCHEDULE I
TEEKAY LNG PARTNERS L.P.
Number of Firm Underwriter Units to be Purchased ----------- --------------------- Citigroup Global Markets Inc. [co-managers to come] TOTAL: 4,000,000 |
SCHEDULE II
TEEKAY LNG PARTNERS L.P.
LIST OF OPERATING SUBSIDIARIES
Teekay Spain, S.L.
Teekay Shipping Spain, S.L. (formerly Naviera F. Tapias, S.A.)
Naviera Teekay Gas, S.L. (formerly Naviera F. Tapias Gas, S.A.)
Naviera Teekay Gas II, S.L. (formerly Naviera F. Tapias Gas II, S.A.)
Naviera Teekay Gas III, S.L. (formerly Naviera F. Tapias Gas III, S.A.)
Naviera Teekay Gas IV, S.L. (formerly Naviera F. Tapias Gas IV, S.A.)
Teekay Servicios Maritimos, S.L. (formerly Naviera F. Tapias Servicios Maritimos, S.A.)
Teekay II Iberia S.L.
SCHEDULE III
TEEKAY LNG PARTNERS L.P.
LIST OF MARSHALL ISLANDS SUBSIDIARIES
[TO COME]
SCHEDULE IV
TEEKAY LNG PARTNERS L.P.
LIST OF SPANISH SUBSIDIARIES
[TO COME]
EXHIBIT A
[FORM OF LOCK-UP AGREEMENT]
TEEKAY LNG PARTNERS L.P.
PUBLIC OFFERING OF COMMON UNITS
November ___, 2005
Citigroup Global Markets Inc.
[Co-Managers to come]
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed Underwriting Agreement (the "UNDERWRITING AGREEMENT"), among Teekay LNG Partners L.P., a Marshall Islands limited partnership (the "PARTNERSHIP"), Teekay GP L.L.C., a Marshall Islands limited liability company, and Teekay LNG Operating L.L.C., a Marshall Islands limited liability company, and each of you as Underwriters named therein, relating to an underwritten public offering of common units representing limited partner interests in the Partnership ("COMMON UNITS").
In order to induce you to enter into the Underwriting Agreement, the undersigned will not, without the prior written consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Securities and Exchange Commission in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to, any Common Units or any securities convertible into, or exercisable or exchangeable for such Common Units, or publicly announce an intention to effect any such transaction, during the period commencing on the date hereof and ending 90 days after the date of the Underwriting Agreement (the "RESTRICTED PERIOD"), other than dispositions of Common Units 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 gift to be bound by the terms of the foregoing terms of this sentence). If (1) during the last 17 days of the Restricted Period any of the Teekay Entities issues an earnings release or announces material news or the occurrence of a material event relating to any of the Teekay Entities or (2) prior to the expiration of the Restricted Period any of the Teekay Entities announces that it will release earnings results during the 16 day period beginning on the last day of the Restricted Period, then the foregoing
restrictions shall continue to apply until the expiration of the 18 day period beginning on the issuance of the earnings release or the announcement of the material news or material event.
If for any reason the Underwriting Agreement shall be terminated prior to the Closing Date (as defined in the Underwriting Agreement), the agreement set forth above shall likewise be terminated.
Notwithstanding the foregoing, the restrictions herein shall not apply to transactions relating to Common Units acquired in open market transactions after the completion of the public offering, provided that with respect to any proposed subsequent sales of Common Units acquired in such open market transactions, it shall be a condition to such proposed subsequent sales that no filing by any party under the Securities Exchange Act of 1934 shall be required or shall be voluntarily made in connection with such sales.
Very truly yours,
Name:
EXHIBIT 10.14
Date November [o], 2005
TEEKAY SHIPPING CORPORATION
and
TEEKAY LNG PARTNERS L.P.
PURCHASE AGREEMENT
RELATING TO
THE SALE AND PURCHASE OF
THE ENTIRE OWNERSHIP INTEREST IN, AND ALL PROMISSORY NOTES ISSUED BY,
AFRICAN SPIRIT L.L.C.,
ASIAN SPIRIT L.L.C.
AND
EUROPEAN SPIRIT L.L.C.
INDEX
CLAUSE PAGE 1 DEFINITIONS AND INTERPRETATION 1 2 AGREEMENT FOR SALE 4 3 CONSIDERATION 4 4 COMPLETION 5 5 WARRANTIES 7 6 REMEDIES OF THE PURCHASER 8 7 IMPLEMENTATION 11 8 COSTS 11 9 OTHER PROVISIONS 11 10 NOTICES 13 11 GOVERNING LAW AND JURISDICTION 14 12 TERMINATION 14 SCHEDULE A WARRANTIES AND REPRESENTATIONS A-1 SCHEDULE B VESSELS B-1 |
THIS AGREEMENT is made on November [o], 2005
BETWEEN:
(1) TEEKAY SHIPPING CORPORATION, a Marshall Islands company having a principal office at TK House, Bayside Executive Park, West Bay Street & Blake Road, P.O. Box AP-59212, Nassau, Bahamas (the "VENDOR"); and
(2) TEEKAY LNG PARTNERS L.P., a Marshall Islands limited partnership with its general partner, Teekay GP L.L.C., having a principal office at TK House, Bayside Executive Park, West Bay Street & Blake Road, P.O. Box AP-59212, Nassau, Bahamas (the "PURCHASER")
WHEREAS:
(A) The Vendor is the legal and beneficial owner of 100% of the limited liability interests of each of African Spirit L.L.C., Asian Spirit L.L.C. and European Spirit L.L.C., each a limited liability company formed under the laws of the Republic of the Marshall Islands with a registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and a principal office c/o Teekay Shipping Corporation, TK House, Bayside Executive Park, West Bay Street & Blake Road, P.O. Box AP-59212, Nassau, Bahamas (collectively, the "COMPANIES"), comprising 100% of the entire issued equity interests of the Companies (collectively, the "INTERESTS").
(B) The Vendor is the holder of three demand promissory notes, each dated November ___, 2005 and issued by one of the Companies in an amount of US$48,333,333.33 (US$145,000,000.00 in the aggregate) with a term of ten years and interest accruing thereon at an annual rate of 7.065 per cent (collectively, the "NOTES").
(C) The Vendor has agreed to sell, and the Purchaser has agreed to purchase, the Interests and the Notes, on and subject to the terms and conditions hereinafter appearing.
IT IS AGREED as follows:
1 DEFINITIONS AND INTERPRETATION 1.1 DEFINITIONS. In this Agreement, including the Schedules and the recitals, unless the context requires otherwise: "ASSETS" means, collectively, the Interests and the Notes; "BUSINESS DAY" means a day (other than a Saturday or Sunday) on which banks in New York are open for the transaction of normal banking business (other than solely for trading and settlement in Dollars) or, for the purposes of Clause 10, a day on which banks are open for the transaction of normal banking business in the country of receipt of a notice; "BUSINESS INFORMATION" means all information and records (in whatever form held and whether commercial, financial, technical or otherwise) relating to the Companies or the business or activities or affairs of the Companies, which can be reasonably considered to be confidential to the Companies; "CLAIM" means a claim for breach of Warranty by the Purchaser against the Vendor; |
"CLOSING" means completion of the sale and purchase of the Assets in accordance with Clause 4.1;
"CLOSING DATE" means the day the Offering closes;
"COMPANIES" has the meaning ascribed in recital (A) of this Agreement.
"CONSIDERATION" means the consideration payable by the Purchaser for the Assets as stated in Clause 3;
"CONTRACTS" means those agreements, contracts, understandings and arrangements to which any of the Companies is a party or to which any of the Assets, the Vessels or any other assets of the Companies are subject or by which they are bound which are material to any of the Companies or its trading activities, set out in Section 3.1 of the Disclosure Schedule;
"COVERED ENVIRONMENTAL LOSSES" means all environmental and toxic tort Losses and Expenses suffered or incurred by the Purchaser, the Purchaser Group Companies or the Companies by reason of or arising out of:
(a) any violation or correction of violation of Environmental Laws; or
(b) any event or condition associated with ownership or operation by the Vendor or the Vendor Group Companies of the Assets (including, without limitation, the presence of Hazardous Substances on, under, about or migrating to or from the Assets or the disposal or release of Hazardous Substances generated by operation of the Assets), including, without limitation, (i) the cost and expense of any investigation, assessment, evaluation, monitoring, containment, cleanup, repair, restoration, remediation or other corrective action required or necessary under Environmental Laws, (ii) the cost or expense of the preparation and implementation of any closure, remedial, corrective action or other plans required or necessary under Environmental Laws and (iii) the cost and expense for any environmental or toxic tort pre-trial, trial or appellate legal or litigation support work;
but only to the extent that such violation complained of under clause
(a), or such events or conditions included in clause (b), occurred
before the Closing Date; and, provided that, in no event shall Losses
or Expenses to the extent arising from a change in any Environmental
Law after the Closing Date be deemed "Covered Environmental Losses."
"CREDIT FACILITY COMMITMENT" has the meaning ascribed in Clause 3.2(c);
"DISCLOSED" means fully, fairly and expressly disclosed by the Transaction Documents or the Disclosure Schedule and, for this purpose "fairly disclosed" means any information disclosed in such manner and in such detail or with sufficient explanation as to enable a reasonable purchaser to make an informed assessment or estimation of the matter concerned and its financial, operational or other consequences to the Companies;
"DISCLOSURE SCHEDULE" means the Disclosure Schedule provided to Purchaser by Vender concurrently with the execution and delivery of this Agreement;
"DOLLARS" means United States Dollars;
"ENVIRONMENTAL LAWS" means all federal, state, foreign and local laws, statutes, rules, regulations, orders, judgments and ordinances relating to protection of health and safety and the environment, each as amended through the Closing Date.
"HAZARDOUS SUBSTANCES" means (a) substances which contain substances
defined in or regulated under applicable Environmental Laws; (b)
petroleum and petroleum products, including crude oil and any fractions
thereof; (c) natural gas, synthetic gas and any mixtures thereof; (d)
any substances with respect to which a federal, state, foreign or local
agency requires environmental investigation, monitoring, reporting or
remediation; (e) any hazardous waste or solid waste, within the meaning
of any Environmental Law; (f) any solid, hazardous, dangerous or toxic
chemical, material, waste or substance, within the meaning of and
regulated by any Environmental Law; (g) any radioactive material; and
(h) any asbestos-containing materials that represent a health hazard.
"INDEBTEDNESS" means any borrowings or other indebtedness whatsoever owed by the Companies;
"INTERESTS" has the meaning ascribed in recital (A) of this Agreement.
"INSOLVENCY EVENT" means in relation to any of the Purchaser, the Vendor or the Companies (as the context may require) that any of the following actions has occurred in relation to it:
(i) an order has been made or an effective resolution passed or other proceedings or actions taken (including, without limitation, the presentation of a petition) with a view to its administration, bankruptcy, winding-up, liquidation or dissolution; or
(ii) it has had a receiver, administrative receiver, manager or administrator appointed over all or any substantial part of its undertaking or assets; or
(iii) any event has occurred or situation arisen in any jurisdiction that has a substantially similar effect to any of the foregoing;
"LOSSES AND EXPENSES" means liabilities, losses, damages, claims, demands, awards and expenses (including, without limitation, legal costs) and includes, for the avoidance of doubt, any value added tax (VAT) (or similar tax) payable in relation to any such matter, circumstance or item (except to the extent that the party claiming Losses and Expenses obtains credit for such VAT as input tax);
"NOTES" has the meaning ascribed in recital (B) of this Agreement;
"OFFERING" means an underwritten public offering of limited partnership units for which Purchaser has filed a registration statement on Form F-1 with the U.S. Securities and Exchange Commission on November 2, 2005;
"OPTION" has the meaning ascribed in Clause 3.1;
"PURCHASER GROUP COMPANIES" means the Purchaser and any subsidiaries thereof and the Purchaser's general partner;
SECURITY INTEREST" means any mortgage, charge (whether fixed or floating), pledge, lien, hypothecation, encumbrance, assignment, right of set-off, trust arrangement, title
retention or other security interest or other agreement or arrangement of any kind having the effect of conferring security; "SPECIFIED RATE" is the rate of interest equal to yearly LIBOR from time to time plus 100 basis points; "TAX" or "TAXATION" means any tax, duty, contribution, impost, levy or charge in the nature of tax, whether domestic or foreign, and any fine, penalty, surcharge or interest in relation thereto, including without limitation (and without prejudice to the foregoing) corporation tax, income tax (including tax failing to be deducted or withheld from or accounted for in respect of any payment), capital gains tax, value added tax, customs excise and import duties, stamp duty, stamp duty reserve tax, and any other payment whatsoever that the Companies are or may be or become bound to make to any person and that is or purports to be in the nature of taxation or otherwise by reason of any taxation statutes; "TAXATION AUTHORITY" means any national, local municipal, governmental, state, federal or fiscal, revenue, customs or excise authority, body, agency or official anywhere in the world having, or purporting to have power or authority in relation to Tax; "TRANSACTION DOCUMENTS" means this Agreement and the other documents delivered at Closing pursuant to Clause 4; "VENDOR'S ACCOUNT" means such account of the Vendor as the Vendor may specify to the Purchaser from time to time; "VENDOR GROUP COMPANIES" means the Vendor and any subsidiary of the Vendor, from time to time (except, with effect from Closing, the Companies and any Purchaser Group Companies); "VESSELS" means the Suezmax tankers of the Companies set forth on Schedule B attached hereto; and "WARRANTIES" means the representations and warranties set out in Clause 5.1 and Schedule A. 2 AGREEMENT FOR SALE 2.1 SALE AND PURCHASE OF ASSETS. Subject to the other provisions of this Agreement, the Vendor shall sell the Assets to the Purchaser and the Purchaser shall purchase the Assets. 2.2 ABSOLUTE TITLE TO ASSETS; NO SECURITY INTEREST IN ASSETS. The Vendor shall take all steps within its power and control (but without any obligation to expend any material amount) to procure that the Purchaser will duly obtain absolute title to the entire legal and beneficial interest in all the Assets, and all rights (whether in respect of distributions, voting or otherwise) that at the date of this Agreement or any later time are conferred on or by any of the Assets, free from any Security Interest. 3 CONSIDERATION 3.1 PAYMENT OF CONSIDERATION. The Consideration shall be the sum of US$180,000,000.00 (One Hundred and Eighty Million United States Dollars), of which |
US$180,000,000.00 shall be payable in cash, which amount shall be allocated as follows: (a) US$180,050,000.00, which shall be allocated amongst the Interests and the Notes as follows: (i) US$11,683,333.33 for the Interests relating to each of the Companies (US$35,050,000.00 in the aggregate); and (ii) US$48,333,333.33 for each Note (US$145,000,000.00 in the aggregate); less (b) US$50,000.00, which shall be payable by the grant by the Purchaser to the Vendor of an option (the "Option") to enter into time charter contracts with each of the Companies for the charter of the Vessels upon the same terms and conditions as the time charter contracts to which the Vessels are currently subject, for whatever period such current time charter parties are not extended in accordance with their terms (being a maximum of six (6) years), provided however, the Option shall be exercisable to extend the charter term for up to two, three-year extensions (or for whatever lesser remaining amount of the extension is then available), and further provided that the income derived by the Companies therefrom would not cause over 10% of the Purchaser's consolidated income to fail to qualify as qualifying income within the meaning of Section 7704(d)(1)(E) of the United States Internal Revenue Code of 1986, as amended. 3.2 VENDOR'S UNDERTAKINGS. In addition to the transfer of the Assets to the Purchaser, the Vendor further undertakes as follows: (a) that on Closing, it shall procure that the Companies shall have no net liabilities (excluding indebtedness evidenced by the Notes;] (b) that during the period between the date of this Agreement and the Closing Date, it shall procure that there is provided to the Purchaser copies of all correspondence with any third parties in relation to the Assets, the Vessels, the Contracts or otherwise which may have a material impact on the assets, liabilities or trading results of the Companies taken as a whole; (c) that prior to the Closing Date, it shall use commercially reasonable efforts (but without any obligation to expend any material amount) to secure from reputable lenders a written commitment, subject to terms and conditions reasonably acceptable to the Purchaser, to provide to the Companies a secured revolving, reducing credit facility in the amount of approximately US$137,500,000 with an interest rate equal to LIBOR plus 50 basis points (the "CREDIT FACILITY COMMITMENT"); and (d) following the Closing Date and upon receiving any notices, correspondence, information or enquiries in relation to the Companies, the Assets, the Vessels or the Contracts, it shall forthwith pass copies thereof to the Purchaser and shall hold in trust for the relevant Company and account forthwith for any monies received after the Closing Date on account of that Company. 4 COMPLETION 4.1 TIMING AND PLACE OF CLOSING. Subject to the completion of the closing of the Offering and to the provisions of this Agreement, Closing shall be effected by the Vendor satisfying its obligations under Clauses 4.2 and by the Purchaser satisfying its |
obligations under Clause 4.3 and shall take place on the Closing Date immediately following the closing of the Offering.
4.2 VENDOR'S CLOSING OBLIGATIONS. The Vendor shall deliver or procure that there are delivered to the Purchaser on or before the Closing Date (as the context may permit):
(a) duly executed transfers in respect of the Interests and the Notes in favour of the Purchaser, or as it may direct;
(b) the certificates, if any, for the Interests (or an indemnity in the approved form for any lost certificates) and originals of the Notes;
(c) a certified copy of the minutes of a meeting of the directors of the Vendor (certified as at the date of Closing to be a certified copy of such resolutions in full force and effect and certifying that such resolutions have not been revoked), authorising the execution of the Transaction Documents (to which it is party) and the performance by Vendor of its obligations thereunder;
(d) all statutory and minute books (in every case written up to, but not including, the Closing Date), common seals, certificates of formation, certificates of amendment, cheque books, bank mandates and other books and records (whether statutory, financial or otherwise) of the Companies, and all certificates and documents of title relating to any investments of the Companies;
(e) the original copies of the Contracts and of the Credit Facility Commitment;
(f) evidence satisfactory to the Purchaser that all amounts payable by any of the Companies under any loan facilities made available by the Vendor (other than with respect to the Notes or any other amounts disclosed as liabilities in the Disclosure Schedule), any bank, financial institution, or any other person whether on the basis of any Security Interest provided by the Companies, and whether in relation to the Vessels or otherwise, have been paid in full and all associated Security Interests (including, without limitation, those identified in the Disclosure Schedule) and any other agreements or obligations entered into by the Companies for the benefit of itself or any other person have been terminated or released and, in relation to Security Interests, reassigned to the Companies or to the person giving the same; and
(g) the duly executed certificate of an officer of the Vendor dated on the Closing Date, in form reasonably acceptable to the Purchaser, certifying on behalf of the Vendor to the accuracy of representations and Warranties of the Vendor contained in this Agreement.
4.3 PURCHASER'S CLOSING OBLIGATIONS. The Purchaser shall on Closing and subject to the transfer of the Assets:
(a) deliver or procure that there are delivered to the Vendor a certified copy of the minutes of a meeting of the directors of its general partner, authorising the execution of this Agreement and any other Transaction Document that it is to execute pursuant to this Agreement;
(b) pay to the Vendor the cash portion of the Consideration by transferring such amount to the Vendor's Account for value on the Closing Date; and
(c) deliver to the Vendor deeds of option executed by each of the Companies and the Vendor evidencing the Option.
4.4 CLOSING OBLIGATIONS NOT FULFILLED. If either party fails, for any reason, to comply with any of its obligations under the foregoing provisions of this Clause 4, the other party may, at its option: (a) by written notice to the first party defer the date for Closing by one or more periods that shall not exceed 20 (twenty) Business Days in aggregate in respect of either all of the parties' obligations under the foregoing provisions of this Clause 4 or such of those obligations that have not been complied with; or (b) proceed to Closing so far as practicable but without prejudice to the second party's rights (whether under this Agreement or the general law) as regards the obligations with which the first party has not complied; or (c) waive all or any of the obligations in question of the first party. 4.5 DEFERRED CLOSING. If Closing is deferred to another date in accordance with Clause 4.4(a), and Closing is effected, the provisions of this Agreement shall apply as if that other date were the Closing Date. 5 WARRANTIES 5.1 GENERAL. The Vendor represents, warrants and undertakes, subject to Clause 5.8, that each statement in Schedule A is at the date of this Agreement, and will (save as disclosed in writing not later than the time of Closing) at the Closing Date remain, true, accurate and not misleading in any respect on the basis that a reference to the Closing Date were substituted for any express or implied reference to the date of this Agreement in that Schedule. 5.2 CLAIMS. The Vendor hereby unconditionally and irrevocably covenants with the Purchaser that, subject always to the limitations set out in Clause 6, it will indemnify the Purchaser and the Companies against all Losses and Expenses that any of the Purchaser Group Companies or the Companies may suffer or incur or pay in enforcing its rights in connection with any matter referred to in this Agreement or any of the Transaction Documents including, without limitation: (i) the disputing and/or settlement of any Claims and any steps taken to avoid and advice sought in connection with any actual, threatened or anticipated Claims; (ii) any legal proceedings in which any of the Purchaser Group Companies or the Companies makes a Claim; and (iii) the enforcement of any such settlement or judgement. 5.3 RELIANCE ON WARRANTIES. The Vendor acknowledges that: (a) the Purchaser has been induced to enter and is entering into this Agreement and the other Transaction Documents on the basis of and in reliance upon the Warranties; (b) the Purchaser may rely on the Warranties to the exclusion of any other information, and that, with the exception of matters set forth in the Disclosure Schedule, the Purchaser's rights in respect thereof will not be in any way impaired as a result of any other information being possessed by or available to any Purchaser Group Companies or any officer, employee, professional or financial adviser of, or person acting on behalf of, the Purchaser or any Purchaser Group Companies. |
5.4 WARRANTIES ARE SEPARATE AND INDEPENDENT. Each Warranty shall be construed as a separate and independent warranty and, save as expressly provided otherwise, shall not be limited or restricted by reference to or inference from any other terms of this Agreement or any other Warranty. 5.5 REDUCTION IN CONSIDERATION. Any payments made by the Vendor to the Purchaser in respect of Claims shall, to the extent lawfully possible, be treated by the parties as a reduction in the Consideration; provided, however, that this Clause 5.5 shall not in any way limit or restrict the amount recoverable by the Purchaser or any other person under this agreement to the amount of the Consideration or any other amount (but this is without prejudice to the limitations set out in Clause 6). 5.6 AWARENESS OF VENDOR AND ORDINARY COURSE OF BUSINESS. Where any Warranty is qualified by reference to the awareness, knowledge, information or belief of the Vendor (or any similar expression), the Vendor shall be deemed to have such awareness, knowledge, information or belief as it would have after having made reasonable enquiry of the senior executive managers and officers of the Vendor. In relation to each of the Warranties concerning the assets, liabilities, Contracts, Vessels or results of any of the Companies, such Warranties shall be deemed to be qualified by reference to exclude any matters (whether or not Disclosed) arising in the ordinary and normal course of trading since September 30, 2005. 5.7 PROVISION OF INFORMATION. The Vendor undertakes promptly to provide the Purchaser with any information that the Purchaser may by written notice request in relation to: (a) any of the Warranties or any statement of fact contained elsewhere in this Agreement or any other Transaction Document; or (b) the Disclosure Schedule or any other disclosure made or information provided (or purportedly made or provided) under this Clause 5.7; or (c) any matter or question connected with or arising out of any of the foregoing, but this only applies to information that is (either at the date of the Agreement or at the date of the request) in the possession of the Vendor or that the Vendor or any of its professional advisers can reasonably be expected to obtain and present without undue efforts. 5.8 DISCLOSURE IN DISCLOSURE SCHEDULE. The Vendor shall not have any liability in respect of any Claim if and to the extent that any fact, matter or circumstance that causes any of the Warranties to be breached or that might result in a Claim or possible Claim has been Disclosed in the Disclosure Schedule or otherwise in any of the Transaction Documents. 5.9 NOTIFICATION OF POTENTIAL CLAIMS BEFORE CLOSING. If, at any time before Closing, the Vendor becomes aware of any Claim or any matter that could reasonably be expected to cause a Claim to arise or any matter that at Closing would constitute a Claim or could reasonably be expected to cause a Claim to arise, it shall forthwith disclose the same in writing to the Purchaser. 6 REMEDIES OF THE PURCHASER 6.1 SURVIVAL. Subject to the limitations and other provisions of this Agreement and the Transaction Documents, the representations and warranties of the Vendor contained in |
this Agreement (including the Schedules hereto), the Disclosure Schedule and the Transaction Documents shall survive the Closing and remain in full force and effect for a period of 12 months after the Closing Date; provided, however, that (a) the Warranties in Clauses 1.2 (Title to Interests and the Notes), 1.3 (No arrangements relating to share capital), 11 (Taxation) and 12.1 (No brokers fees) of Schedule A to this Agreement shall survive until, and shall terminate upon, the date of expiration of the applicable statute of limitations with respect to the liability in question. The covenants and agreements of the Vendor contained in this Agreement and the Transactions Documents that by their terms extend beyond the Closing Date shall not terminate until all obligations with respect thereto have been performed or satisfied or shall have expired or been terminated in accordance with their terms.
6.2. INDEMNIFICATION BY THE VENDOR
(a) The Vendor agrees, subject to the other terms and conditions of this
Agreement and the Transaction Documents, to indemnify the Purchaser
against and hold it harmless from any and all (i) Losses and Expenses
to the Purchaser, any Purchaser Group Company or the Companies arising
out of or related to the breach of any representation, warranty,
covenant or agreement of the Vendor in this Agreement (including the
Schedules hereto), the Disclosure Schedule and the Transaction
Documents, to the extent Vendor is notified by the Purchaser of such
Losses or Expenses prior to expiration of the applicable survival
period set forth in Clause 6.1 above, (ii) any Covered Environmental
Losses relating to the Assets to the extent that the Vendor is notified
by the Purchaser of any such Covered Environmental Losses within five
(5) years after the Closing Date; (iii) Losses or Expenses to the
Purchaser, the Purchaser Group Companies or the Companies arising from
(A) the failure of the Purchaser Group Companies, immediately after the
Closing Date, to be the owner of such ownership interests in and to the
Assets as are necessary to enable the Purchaser Group Companies to own
and operate the Assets in substantially the same manner that the Assets
were owned and operated by the Vendor Group Companies immediately prior
to the Closing Date or (B) the failure of the Purchaser Group Companies
to have on the Closing Date any consent or governmental permit
necessary to allow the Purchaser Group Companies to own or operate the
Assets in substantially the same manner that the Assets were owned and
operated by the Vendor Group Companies immediately prior to the Closing
Date, in each of clauses (A) and (B) above, to the extent that the
Vendor is notified by the Purchaser of such Losses or Expenses within
three (3) years after the Closing Date; and (iv) all federal, state,
foreign and local income tax liabilities attributable to the operation
of the Assets prior to the Closing Date.
(b) The aggregate liability of Vendor under Clause 6.2(a) above shall not exceed $10 million. Furthermore, no claim may be made against Vendor for indemnification pursuant to Clause 6.2(a) unless the aggregate dollar amount of all claims for indemnification pursuant to such clause shall exceed $500,000, in which case Vendor shall be liable for claims for indemnification only to the extent such aggregate amount exceeds $500,000.
6.3. GENERAL PROVISIONS.
(a) The Purchaser agrees that within a reasonable period of time after it becomes aware of facts giving rise to a claim for indemnification pursuant to Clause 6.2, it will provide notice thereof in writing to Vendor specifying the nature of and specific basis for such claim.
(b) Vendor shall have the right to control all aspects of the defence of (and any counterclaims with respect to) any claims brought against Purchaser, the Purchaser Group Companies or the Companies that are covered by the indemnification set forth in Clause 6.2, including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent (which consent shall not be unreasonably withheld) of the Purchaser (with the concurrence of the conflicts committee of Teekay GP L.L.C.) unless it includes a full release of the Purchaser, the Purchaser Group Companies and the Companies from such matter or issues, as the case may be.
(c) The Purchaser agrees to cooperate fully with Vendor with respect to all aspects of the defence of any claims covered by the indemnification set forth in Clause 6.2, including, without limitation, the prompt furnishing to Vendor of any correspondence or other notice relating thereto that the Purchaser, the Purchaser Group Companies or the Companies may receive, permitting the names of such parties to be utilized in connection with such defence, the making available to Vendor of any files, records or other information of such parties that Vendor considers relevant to such defence and the making available to Vendor of any employees of Purchaser, the Purchaser Group Companies or the Companies; provided, however, that in connection therewith Vendor agrees to use reasonable efforts to minimize the impact thereof on the operations of such parties and further agrees to maintain the confidentiality of all files, records and other information furnished by any such party pursuant to this Clause 6.3. In no event shall the obligation of the Purchaser to cooperate with Vendor as set forth in the immediately preceding sentence be construed as imposing upon the Purchaser an obligation to hire and pay for counsel in connection with the defence of any claims covered by the indemnification set forth in this Clause 6; provided, however, that the Purchaser may, at its own option, cost and expense, hire and pay for counsel in connection with any such defence. Vendor agrees to keep any such counsel hired by the Purchaser reasonably informed as to the status of any such defence (including providing such counsel with such information related to any such defence as such counsel may reasonably request) but Vendor shall have the right to retain sole control over such defence.
(d) In determining the amount of any Loss or Expense for which the Purchaser, any Purchaser Group Company or any Company is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized by such parties, and such correlative insurance benefit shall be net of any incremental insurance premium that becomes due and payable by such parties as a result of such claim, and (ii) all amounts recovered by such parties under contractual indemnities from third persons. The Purchaser hereby agrees to use commercially reasonable efforts to realize any applicable insurance proceeds or amounts recoverable under such contractual indemnities; provided, however, that the costs and expenses (including, without limitation, court costs and reasonable attorneys' fees) of Purchaser, the Purchaser Group Companies or the Companies in connection with such efforts shall be promptly reimbursed by Vendor in advance of any determination of whether such insurance proceeds or other amounts will be recoverable.
(e) The Purchaser hereby acknowledges and agrees that its sole and exclusive remedy with respect to any and all claims relating to the subject matter of this Agreement and the Transaction Documents shall be pursuant to the indemnification provisions set forth in this Clause 6. In furtherance of the foregoing, the Purchaser hereby waives, to the fullest extent permitted under applicable law, any and all rights, claims and causes of action it may have against Vendor and the Vendor Group Companies arising under or based upon any federal, state, foreign or local statute, law, ordinance, rule or regulation
(including, without limitation, any such rights, claims or causes of action arising under or based upon common law or otherwise). 7 IMPLEMENTATION 7.1 FURTHER ASSURANCES. The Vendor shall (and shall procure that any other relevant person shall) execute any deeds or documents and exercise or waive any rights and generally take any action, including passing (or procuring that there is passed) any resolution of Vendor or (whilst the Vendor remains the registered owner) the Companies that the Purchaser may reasonably require, which may be necessary for the Transaction Documents to be carried into effect. 8 COSTS 8.1 RESPONSIBILITY FOR COSTS. Except where expressly provided otherwise, each party shall pay its own costs connected with the negotiation, preparation, execution and implementation of the Transaction Documents and any matters connected therewith and investigating the affairs of the Companies. 8.2 CREDIT FACILITY PAYMENT. Upon the closing of the credit facility contemplated by the Credit Facility Commitment, the Purchaser shall pay to the Vendor a credit facility financing fee of US$627,539.00 by transferring such amount to the Vendor's Account. 9 OTHER PROVISIONS 9.1 ENTIRE AGREEMENT. This Agreement together with the other Transaction Documents constitutes the entire agreement between the parties regarding the sale and purchase of the Assets and related matters and supersedes any prior drafts, agreements, undertakings, representations, warranties and arrangements of any kind, whether or not in writing, regarding the same, all of which are hereby terminated and shall cease to have effect in all respects, and the parties confirm that there are no collateral or supplemental agreements relating to the Transaction Documents, except as expressly set forth herein or therein. 9.2 ASSIGNMENT. (a) This Agreement shall be binding on and endure for the benefit of each party's successors and permitted assigns. Save as provided in Clause 9.2(b), no party shall, without the prior written consent of the other party, assign, transfer, charge or deal in any other manner with this Agreement or any of its rights (whether to damages or otherwise) or obligations arising under or in connection with the Agreement, or purport to do any of the same, nor sub-contract any or all of its obligations under this Agreement, and any such assignment, transfer, charge or dealing shall be void for all purposes. (b) The Purchaser may assign all or any part of its rights and benefits under this Agreement to any Purchaser Group Companies. (c) Subject to and upon any succession or assignment permitted by this Agreement, any such successor or assignee shall in its own right be able to enforce any term of this Agreement in accordance with the terms of this Agreement as if it were a party, but until such time shall have no rights whether as a third party or otherwise. The Vendor shall have no greater liabilities towards any successor or assignee of the Purchaser than it |
would have had to the Purchaser had the Purchaser remained fully and solely entitled under this Agreement.
9.3 RIGHT OF SET-OFF, DEDUCTIONS AND WITHHOLDINGS AND TAX ON PAYMENTS.
(a) The Purchaser shall not be entitled to set off against the Consideration any sums owing to it by the Vendor.
(b) If any deduction or withholding is required by law to be made from any payment from one party to another party under any Transaction Document, the party making the payment shall increase the amount thereof so as to ensure that the recipient receives and is able to retain that amount that it would have received and retained had the payment not been the subject matter of such deduction or withholding provided always that if the recipient is entitled to a credit or some other benefit as a consequence of the payment to it being the subject matter of a deduction or withholding it shall use its reasonable endeavours to utilise the credit (whether by set off, or by claiming a repayment in respect thereof, or otherwise) or benefit so arising and in the event that it is able so to do it shall repay to the party who made the payment an amount equal to the credit or benefit so utilised, provided always that this clause is without prejudice to the limitations on the Vendor's liabilities as set out in Clause 6. For the avoidance of doubt, this clause shall not impose upon the recipient of the payment any obligation to utilise any credit or benefit in priority to any other economic credit or benefit available to it or to pay to the party making the payment an amount greater than that by which the original payment was increased under this clause.
(c) If any payment from the Vendor to the Purchaser under any Transaction Document is liable to Tax in the hands of the Purchaser, the Vendor shall increase the payment by such an amount as will ensure that the Purchaser is able to receive and retain, after paying Tax in respect of its receipt, an amount equal to that which would otherwise have been paid to it had the receipt not been subject to Tax in its hands, provided always that this clause is without prejudice to the limitations on the Vendor's liabilities as set out in Clause 6. The parties shall agree to the amount of any increase in a relevant payment to give effect to this Clause. In the event that the parties are not able to agree the amount of any increase, the amount thereof shall be certified by the Purchaser's auditors acting as experts whose decision in respect thereof shall be binding on the relevant parties except in the case of manifest error.
9.4 WAIVERS, RIGHTS AND REMEDIES.
(a) No failure or delay on the part of either party to this Agreement in exercising any right or remedy provided by law or under this Agreement shall impair such right or remedy or operate as a waiver or variation of it or preclude its exercise at any subsequent time and no single or partial exercise of any such right or remedy shall preclude or restrict any other or further exercise of it or the exercise of any other right or remedy.
(b) A waiver by either party to this Agreement of a breach of or default under any Transaction Document shall not constitute a waiver of any other breach or default, shall not affect the other terms of any Transaction Document or the rights of any other person thereto and shall not prevent the Purchaser from subsequently requiring compliance with the waived obligation.
(c) Any waiver (in whole or in part) of any right or remedy under this Agreement must be set out in writing, signed by or on behalf of the person granting the waiver and may be given subject to any conditions thought fit by the grantor and, unless otherwise expressly
stated, any waiver shall be effective only in the instance and only for the purpose for, and in favour of the person to, which it is given. (d) Unless specifically provided otherwise, the rights and remedies of the Purchaser and the Vendor under or pursuant to any Transaction Document are cumulative, may be exercised as often as the Purchaser or the Vendor, as applicable considers appropriate and are in addition to its rights and remedies under the general law. 9.5 VARIATIONS. No variation of any Transaction Document shall be valid unless it is agreed in writing and signed by or on behalf of each of the parties thereto. 9.6 EFFECT OF CLOSING. This Agreement (other than obligations that have already been fully performed) remains in full force after Closing. 9.7 PROVISIONS OF AGREEMENT SEVERABLE. If any provisions of this Agreement or any other Transaction Document is, or becomes, invalid, unenforceable or illegal, in whole or in part, under the laws of any jurisdiction, such term or provision or part shall to that extent be deemed not to form part of this Agreement or the relevant Transaction Document (as the case may be), but the validity, enforceability or legality of the remaining provisions of this Agreement or the relevant Transaction Document shall not be impaired. 9.8 INTEREST FOR LATE PAYMENT. Any sum owing by either party under this Agreement shall carry interest from (and excluding) the date on which it is payable until (and including) the date of actual payment at the Specified Rate; such interest will be compounded semi-annually and be payable after as well as before any judgment. 9.9 COUNTERPARTS. This Agreement and each of the other Transaction Documents may be entered into in any number of counterparts and by the parties thereto on separate counterparts, each of which when so executed and delivered shall be an original but each such Transaction Document shall not be effective until each party thereto has executed at least one counterpart, but all the counterparts for each Transaction Document shall together constitute one and the same instrument. 9.10 THIRD PARTY RIGHTS. This Agreement and the other Transaction Documents are made for the benefit of the respective parties hereto and thereto and their successors and permitted assigns only and are not intended to benefit, and no term thereof shall be enforceable by, any other person by virtue of the Contracts (Rights of Third Parties) Act 1999. 10 NOTICES 10.1 GENERAL. Any notice under or in connection with this Agreement shall be in writing and may be delivered by hand or fax to the address of the relevant party that is set out below or to such other address as that party may have notified in writing from time to time to the party serving the notice, which notice so served by fax shall be deemed to have been received at the time of despatch: (a) the Vendor Name: Teekay Shipping Corporation Address: TK House, Bayside Executive Park, West Bay Street & Blake Road, |
P.O. Box AP-59212, Nassau, The Bahamas Fax Number: +1 242 502 8840 marked for the attention of the Corporate Secretary
(b) the Purchaser Name: Teekay GP L.L.C., as general partner of Teekay LNG Partners L.P. Address: TK House, Bayside Executive Park, West Bay Street & Blake Road, P.O. Box AP-59212, Nassau, The Bahamas Fax Number: +1 242 502 8840 |
marked for the attention of the Corporate Secretary
11 GOVERNING LAW AND JURISDICTION
11.1 ENGLISH LAW. This Agreement is governed by, and shall be construed in accordance with, English law. 11.2 ARBITRATION. (a) Any dispute arising out of this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 and any statutory re-enactment or modification thereof before a sole arbitrator agreed by the parties or failing agreement within 7 days of receipt by one party of a notice (the "FIRST NOTICE") from the other proposing an arbitrator, a tribunal of three arbitrators comprising: (i) the arbitrator proposed in the First Notice; (ii) an arbitrator appointed by the party that received the First Notice; and (iii) an arbitrator, who shall be the chairman, appointed by the two arbitrators referred to in (i) and (ii) above. If the party receiving the First Notice does not within 14 days of receipt thereof notify the other party of its appointed arbitrator, the arbitrator referred to in (i) above shall be deemed appointed as sole arbitrator. (b) Once appointed in relation to a dispute, a sole arbitrator or tribunal shall resolve all other disputes between the parties in relation to this Agreement, subject to the availability of the arbitrator(s). 12 TERMINATION 12.1 TERMINATION. This Agreement may be terminated upon written notice given at any time before the Closing: 14 |
(a) by the mutual written consent of Vendor and Purchaser; (b) by Vendor or Purchaser, if the Closing shall not have occurred prior to February 23, 2006 (the "EXPIRATION DATE"); provided, however, that the right to terminate this Agreement under this Clause 12.1(b) shall not be available to any party whose failure to fulfill any obligation under this Agreement shall have been the cause of, or shall have resulted in, the failure of the Closing to occur prior to such date; (c) by Vendor, in the event of a material breach by Purchaser of any representation, Warranty, covenant or agreement of Purchaser contained herein that has not been cured or is not curable by the Expiration Date; or (d) by Purchaser, in the event of a material breach by Vendor of any representation, Warranty, covenant or agreement of Vendor contained herein that has not been cured or is not curable by the Expiration Date. 12.2 EFFECT OF TERMINATION. In the event of the termination of this Agreement pursuant to Clause 12.1 above, the parties shall be relieved of their obligations under this Agreement, save that Clauses 1 and 10 to 11 shall continue in full force and effect, and neither party shall have any claims against the other party in connection with this Agreement except in respect of any accrued rights or obligations arising under this Agreement before termination or in connection with any antecedent breach by any party of any provision of this Agreement or any breach by any party of any continuing provision of this Agreement. |
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IN WITNESS WHEREOF this Purchase Agreement has been executed by or on behalf of the parties the day and year first above written.
EXECUTED by
TEEKAY SHIPPING CORPORATION
EXECUTED by
TEEKAY LNG PARTNERS L.P.
by its general partner
TEEKAY GP L.L.C.
SCHEDULE A
WARRANTIES AND REPRESENTATIONS
1 THE COMPANIES AND THE INTERESTS 1.1 INFORMATION. The Companies are duly formed and validly existing under the laws of The Republic of the Marshall Islands. The Companies have the requisite power and authority to own and operate its properties and assets and to carry on its business. 1.2 TITLE TO INTERESTS AND THE NOTES. The Interests constitute one hundred per cent of the issued capital of the Companies, the Vendor is the sole legal and beneficial owner of the Interests, and no claim has been made by any person to be entitled to any of them. The Interests have been duly authorized, properly allotted and validly issued and are fully paid, or credited as fully paid, and non-assessable. There is no Security Interest, option, conversion right, right to acquire, or other adverse interest, right, equity, claim or potential claim of any description on or over or affecting any of the Interests nor are there any agreements, arrangements or commitments to give or create any such Security Interest, right or claim, and no claim has been made by any person to be entitled to any. 1.3 NO ARRANGEMENTS RELATING TO SHARE CAPITAL. The Companies have not created or issued any shares or equity interests (other than the Interests). There is no agreement, arrangement, obligation or commitment (including an option or right of pre-emption or conversion) requiring or granting any person the right to require the creation, allotment, issue, transfer, redemption or repayment of, or creating or requiring the creation of any Security Interest over, or requiring the grant to a person of the right (conditional or not) to require the allotment, issue, transfer, redemption or repayment of, any shares, equity or loan capital in the Companies (or any unissued shares, equity capital, loan capital or other securities of the Companies) now or at any time in the future, and the Companies have not agreed to do or enter into any of the foregoing and no person has made any claim to be entitled to any of the foregoing. 1.4 NO CAPITAL REORGANISATION. The Companies have not since incorporation: (a) made any issue of securities by way of capitalisation of profits or reserves (including share premium account and capital redemption reserve); or (b) repaid, purchased or redeemed any shares of any class of its share capital or otherwise reduced its share capital or any class of it; and have not agreed to do any of the foregoing (whether at the option of any other person or otherwise). 1.5 NO AGREEMENT/ARRANGEMENT. Neither the Vendor nor the Companies are party to any agreement or arrangement concerning: (a) the transfer or disposal of the Assets or any interest therein or any restriction thereon or obligation relating thereto; (b) the exercise of votes at meetings of the board of the Companies or of the holders of any class of Interests or the Notes; or |
(c) the right to appoint or remove any directors or officers of the Companies. 1.6 NO SECURITY INTEREST OVER ASSETS. There is no Security Interest (other than liens arising in the usual course of business consistent with past practices) affecting the whole or any material part of the assets of the Companies. 2 THE VENDOR 2.1 CAPACITY OF VENDOR. As regards the Vendor: (a) it has the requisite power and authority to enter into the Transaction Documents to which it is a party and perform all its obligations thereunder; (b) the Transaction Documents to which it is a party constitute (or will constitute when executed) its legal, valid and binding obligations enforceable against it in accordance with their terms; (c) it has the power and authority to absolutely and unconditionally to sell and transfer the full legal and beneficial ownership in the Interests and the Notes registered in its name to the Purchaser on the terms set out in this Agreement; (d) the execution and delivery of the Transaction Documents and performance by it of the obligations thereunder do not and will not result in a breach of, or constitute any default under, any law or regulation, any order, judgement or decree by any court or governmental agency to which it is a party or by which it is bound, its Articles of Incorporation and Bylaws or any agreement to which it is a party; (e) all consents, licences, approvals and authorisations required by it in connection with the Transaction Documents to which it is a party and the transactions contemplated thereby have been obtained and are in full force and effect; (f) no action, suit, proceeding, litigation or dispute against it or any Vendor Group Company is presently taking place or pending or, to its knowledge, threatened that would or might reasonably be expected to inhibit its ability to perform its obligations under the Transaction Documents to which it is a party or that could materially and adversely affect the Assets; and (g) in so far as it is a body corporate: (i) it is a body corporate duly incorporated and validly existing under the laws of the jurisdiction in which it is incorporated; (ii) no Insolvency Event has occurred in relation to it and no events or circumstances have arisen that entitle or could entitle any person to take any action, appoint any person, commence proceedings or obtain any order instigating an Insolvency Event. 2.2 VENDOR/COMPANIES RELATIONSHIP. Neither the Vendor nor any Vendor Group Companies: (a) owe any indebtedness or other liability which has not been Disclosed and which in aggregate exceeds $100,000 to any of the Companies whether actually or contingently, whether solely or jointly with any other person and whether as principal or surety, and, other than the Notes, there is no such indebtedness or liability which has not been A-2 |
Disclosed and which in aggregate exceeds $100,000 due or owing by any of the Companies to the Vendor or any Vendor Group Companies and there is no guarantee or Security Interest in respect of any such indebtedness or liability outstanding; (b) are party to any agreement, arrangement or understanding, other than the Transaction Documents, with the Companies or relating to the Companies or the Assets in which the Vendor, any Vendor Group Company is or has been interested, whether directly or indirectly, and there is no agreement (other than the Notes) arrangement or understanding to which the Companies are a party and in which the Vendor or any Vendor Group Company has or has had an interest, whether directly or indirectly; or (c) is entitled to a claim of any nature against any of the Companies, which has not been Disclosed other than amounts owing under the Notes or which individually does not exceed $100,000, or has assigned to any person the benefit of a claim against the Companies to which it would otherwise be entitled. 3 AGREEMENTS 3.1 DISCLOSURE OF CONTRACTS. Complete and accurate copies of all Contracts (including all amendments and supplemental agreements relating thereto) have been provided to the Purchaser and all Contracts are set out in Section 3.1 of the Disclosure Schedule. 3.2 ENFORCEABILITY OF AND COMPLIANCE WITH AGREEMENTS. In relation to each Contract: (a) the Vendor has no reason to believe that the Companies will be unable to complete and fulfil each of the Contracts by the due date and within the estimated level of costs or that any products sold or to be sold by the Companies are or will be unable to meet the specifications contracted for; (b) the Companies are in the possession or in the control of each such Contract; (c) so far as the Vendor is aware, there are no written or oral agreements that derogate from the obligations of any person other than the Companies or increase the obligations of the Companies under the Contracts; (d) each such Contract has been validly executed by the Companies, is valid and subsisting, has not been terminated and is fully enforceable against the Companies and, to the Vendor's knowledge, the other parties to such agreement in accordance with its terms; (e) none of such Contracts is subject to a Security Interest granted or created by the Companies or Vendor Group Companies other than under the terms of the relevant Contract; (f) to Vendor's knowledge, there is no and has not been, at any time, any breach of, or any default in the performance of, the terms of any such Contracts by any person other than the Companies nor are there any circumstances likely to give rise to such breach or default. The Companies have not granted any time or indulgence, or waived any right, in relation to any such Contract and, in particular, but without prejudice to the generality of the foregoing, all amounts due and payable under such agreements have been duly paid in full on, or within a reasonable period of, the due date for payment of the same; |
(g) so far as the Vendor is aware, the Companies have fulfilled all of their obligations and performed and observed all warranties, undertakings, covenants and agreements on their part to be fulfilled, performed and observed under each of such Contracts;
(h) no notice of any intention to terminate, repudiate, rescind, modify or disclaim any provision of any Contract has been given by the Companies or, so far as the Vendor is aware, received from a person other than the Companies by the Companies in respect of any such Contract;
(i) so far as the Vendor is aware, the Companies have paid all Taxes, duties, imposts and other charges payable in respect of the Contracts so far as such Taxes, duties, imposts and other charges fall upon the Companies and have become due and payable;
(j) all necessary licences, approvals and consents required by the Companies prior to the entry into of each of such Contracts and for their continuation were duly obtained and are subsisting and, to Vendor's knowledge, no circumstances have arisen that may lead to withdrawal or failure to renew, if applicable, of any such licence, approval or consent;
(k) there are no disputes or outstanding claims pending or, to Vendor's knowledge, threatened against the Companies under such Contracts and, to Vendor's knowledge, no person is entitled to make, or has threatened to make, a claim against the Companies in respect of any representation, breach of condition or warranty or other express or implied term relating to any such Contracts and no matter exists that would or might enable a person other than the Companies to make such a claim or raise a set-off, deduction, withholding or counterclaim in any action for breach of the relevant Contract or otherwise give any person other than the Companies the right to withhold or delay payment of any sum due from it under the terms of the relevant Contract or the performance of any of its obligations thereunder;
(l) so far as the Vendor is aware, no person (other than the parties to such Contracts) has any rights (including any Security Interests) in respect of any such Contracts or the assets the subject thereof; and
(m) so far as the Vendor is aware, no Insolvency Event has occurred in relation to any third party to such Contracts.
3.3 NO POWERS OF ATTORNEY. There are in force no powers of attorney given by the Companies nor any other authority (express, implied or ostensible) given by the Companies to or in favour of any person (as agent or otherwise) to enter into any agreement, contract or commitment or to do anything on their behalf. The Disclosure Schedule sets out details of all persons who have authority to bind the Companies in the ordinary course of business.
3.4 CHANGE OF CONTROL. Neither the sale of the Assets hereunder nor any change in the management of the Companies as a result of this Agreement will:
(a) entitle any person to modify or terminate any Contract or other arrangement with the Companies;
(b) result in the breach by the Companies under any of the terms, conditions or provisions of any Contract or other instrument to which the Companies are now a party;
(c) result in any present or future Indebtedness becoming due and payable or capable of being declared due and payable prior to its stated maturity; or
(d) entitle any person to receive from the Companies any finder's fee, brokerage or other commission in connection with the sale of the Interests and the Notes. 3.5 OFFERS AND TENDERS. No offer or tender or similar arrangement given or made by the Companies are capable of giving rise to an agreement solely by the unilateral act of any person other than the Companies. 3.6 JOINT VENTURES ETC. The Companies do not, and have not agreed to, act or carry on business in partnership with any other person and are not and have not agreed to act or become a member of any joint venture, consortium, corporate or unincorporated body, association or undertaking. 3.7 COMPETITION/ANTI-TRUST. The Companies are not party to any practice, arrangement or agreement that infringes or is likely to require registration or notification under any relevant anti-trust or competition law. 3.8 RESTRICTIVE PRACTICES. The Companies are not and have not been a party to any agreement, arrangement, understanding or practice restricting the freedom of the Companies to carry on the whole or any part of its business in any place in such manner as it thinks fit or to provide or take goods and/or services by such means and from and to such persons and into or from such places as it may from time to time think fit and/or to compete in any area or in any field or with any person. 3.9 NO DIRECTORS OR OFFICERS. The management of each of the Companies is vested exclusively in its members. The Vendor is, and the Purchaser shall be upon the Closing, the sole member of each of the Companies with, in its capacity as sole member, authority to make all decisions and take all actions for each of the Companies as, in its sole discretion, it shall deem necessary and appropriate to enable each of the Companies to carry out any lawful activity, including but not limited to carrying on the acquisition, ownership, operation and disposition of oceangoing vessels. Notwithstanding its authority to do so as sole member of the Companies, the Vendor has not appointed or elected any individuals to officer positions of any of the Companies. 4 FINANCIAL ARRANGEMENTS 4.1 INDEBTEDNESS. Other than the Notes and the Credit Facility Commitment, the Companies do not have outstanding nor have they incurred or agreed to incur any Indebtedness (including, without limitation, any indebtedness for moneys borrowed or raised under any acceptance credit, bond, rate, bill of exchange or commercial paper, finance lease, hire purchase agreement, trade bills, forward sale or purchase agreement or conditional sale agreement or other transaction having the commercial effect of a borrowing). 4.2 BORROWINGS. Other than the Notes, the Companies have not borrowed any monies from the Vendor, any Vendor Group Companies or any third party. 4.3 LOANS BY THE COMPANIES. The Companies have not made any loans to the Vendor, any Vendor Group Companies or any third party. 4.4 DEBTS. The Companies have not factored any of its debts. There are no debts owing to the Companies. A-5 |
4.5 NO GUARANTEE OR SECURITY INTERESTS. No guarantee or Security Interest has been given or entered into by the Companies or any third party in respect of Indebtedness or other obligations of the Companies and no guarantee or Security Interest has been given or entered into by the Companies in respect of any other person. 4.6 NO INDEMNITIES GIVEN BY THE COMPANIES. The Companies are not responsible (including on a contingent basis) for the indebtedness, or for the default in the performance of any obligation, of any person nor is it party to any option or pre-emption right or any guarantee, suretyship or any other obligation (whatever called) to pay, purchase or provide funds (whether by advance of money, the purchase of or subscription for shares or other securities or the purchase of assets or services or otherwise) for the payment of, or as an indemnity against the consequence of default in the payment of, any indebtedness of any person. 4.7 BANK ACCOUNTS. Details of all bank accounts of the Companies, and particulars of the balances of all the Companies' bank accounts as at a date not more than 2 (two) Business Days before the date of this Agreement, have been disclosed to the Purchaser, and the Companies have no other bank accounts. Since the date of such particulars, there have been no material payments out of any such bank accounts, except for routine payments in the ordinary course of business consistent with past practices. 5 ASSETS, LIABILITIES AND OTHER ARRANGEMENTS 5.1 NO OTHER ASSETS AND LIABILITIES. The Companies have no assets other than the Vessels and under the Contracts and no liabilities other than those arising in connection with the Contracts, the Notes and as set forth in Section 5.1 of the Disclosure Schedule and, save for its obligations under the Contracts, the Notes there are no agreements or arrangements to which the Companies are a party that increase the obligations of the Companies under the Contracts or that create or include any other obligation that might be binding on the Companies. 5.2 BUSINESS ACTIVITY. The only business activity of the Companies since incorporation has been the acquisition, ownership, operation of the Vessels. 6 PROPERTIES 6.1 PROPERTIES. The Companies do not own, occupy or use any real property. 7 INSURANCE 7.1 INSURANCE POLICIES. The Companies maintain the policies of insurance listed in Section 7.1 of the Disclosure Schedule and attached to the Disclosure Schedule, each of which is in full force and effect and, to Vendor's knowledge, not subject to being avoided for any reason. 8 LITIGATION AND OTHER DISPUTES 8.1 NO PROCEEDINGS. The Companies are not, and, to Vendor's knowledge, no director or officer of the Companies (in relation to the Companies' affairs or, if resolved in a manner adverse to such director or officer, could result in a materially adverse effect on the Company's business) is, engaged in or a party to any dispute, litigation, arbitration, prosecution or other legal proceedings or in any proceedings or hearings before any statutory or governmental body, department, board or agency, nor are any of the A-6 |
foregoing pending or, to Vendor's knowledge, threatened or expected either against or by the Companies, and, to Vendor's knowledge, there is no fact or circumstance or any other form of written demand in existence that might give rise to the same, or form the basis of any criminal prosecution against the Companies. 8.2 NO ORDERS OR JUDGEMENTS. There is no order, decree or judgement of any court, tribunal or any governmental agency of any country outstanding against the Companies or, to Vendor's knowledge, any person for whose acts the Companies may be vicariously liable, and, to Vendor's knowledge, there are no circumstances likely to give rise to vicarious liability of the Companies, and no injunction has been granted against the Companies. 8.3 NO UNLAWFUL ACTS. The Companies have not committed, or been prosecuted for, any breach of a statutory or regulatory duty or any tortious or other criminal or unlawful or unauthorised act that could reasonably be expected to lead, or has led, to a claim for damages or an injunction or other order of a court or tribunal of competent jurisdiction being made against it, and there are no circumstances likely to give rise to such a breach or act. 9 COMPLIANCE WITH LEGAL REQUIREMENTS 9.1 COMPLIANCE BY COMPANIES. Each of the Companies has, so far as the Vendor is aware, complied and is continuing to comply in all material respects with all relevant legislation and regulations and guidelines in any part of the world applicable to it and/or its business and/or its assets. 9.2 ULTRA VIRES. The Companies are empowered and duly qualified to carry on business in all jurisdictions in which its present businesses are now carried on and has not entered into any ultra vires transaction. 9.3 RETURNS. All returns, particulars, resolutions and other documents required to be filed with or delivered to the Registrar of Corporations in the Republic of the Marshall Islands by the Companies have been properly prepared and so filed or delivered. 9.4 LIMITED LIABILITY COMPANY AGREEMENT. The Limited Liability Company Agreements of, and all resolutions passed by, the Companies and all other legal requirements concerning the Companies have been complied with. A copy of each Company's Limited Liability Company Agreement has been provided to the Purchaser, which is complete and accurate in all material respects, has attached thereto or incorporated therein copies of all resolutions and other documents required by law to be so attached or incorporated, and fully sets out the rights and restrictions attaching to the Interests. 9.5 BOOKS AND RECORDS. The statutory books (including all registers and minute books whether electronic or otherwise), books of account and other statutory records of the Companies have been properly and accurately written up or maintained in accordance with all applicable laws and are up to date (but not including the date of the Agreement) and comprise complete and accurate records of all information required to record therein other than to the extent that they are not material to the business of the Companies. The Companies have not received any notice or allegation that any of the statutory books, books of accounts or other records of whatsoever kind of the Companies are inaccurate or incomplete or should be rectified. 9.6 COMPANIES NAME. The Companies does not use or otherwise carry on business under any name other than its full corporate name. The Companies have the full right to use |
its corporate name without restriction, and the Companies and the Vendor are not aware of any actual or threatened challenge to the use of those names or any of them in respect of the business of the Companies or any claim that any such use infringes any rights of any third party.
9.7 CONSENTS AND LICENCES. The Companies holds any and all licences (including statutory licences), permissions, authorisations, consents, registrations and exemptions required by it for the operation of its business as now carried on, and, to Vendor's knowledge, none of these is subject to revocation or cancellation for any reason.
9.8 NO PENALTIES OR FINES. Neither the Companies nor any of its officers (or agents during the course of their duties) has committed or omitted to do any act or thing that has given or could give rise to a material claim, fine, penalty or other liability, at law or in equity, in respect of the physical or environmental condition of any of its fixed or moveable assets, real property or products.
9.9 NO INVESTIGATIONS AND INQUIRIES. No investigations, inquiries or reviews by or on behalf of any governmental or other body in respect of the Companies or its business or assets are pending or, to Vendor's knowledge, in existence or have been conducted or threatened, and there are no circumstances that might give rise to such investigation, inquiry or review.
10 EMPLOYMENT
10.1 EMPLOYEES. The Companies do not, and have never had any employees and there are no arrangements (written or otherwise) under which remuneration or benefit or other sum whatsoever is paid or given to any person (including any officer or consultant of the Companies). 11 TAXATION 11.1 TAX RESIDENCE. (a) The Companies are and always have been resident in The Bahamas for the purposes of Taxation and have never been resident in any other country for the purposes of Taxation or treated as so resident for the purposes of any double taxation agreement. (b) The Companies have never traded through a branch, agency or permanent establishment situated outside The Bahamas. (c) No circumstances exist whereby a person not resident in The Bahamas is assessable and chargeable to tax in the name of the Companies. (d) The Companies are not liable to pay nor have they at any time incurred any liability to Tax chargeable under the laws of any jurisdiction other than The Bahamas. 11.2 DISCLOSURES, NOTICES, RETURNS, CLEARANCES AND RECORDS. (a) All notices, reports, disclosures, accounts, computations, statements, assessments, registrations, de-registrations and any other information that ought to have been made or supplied by or in respect of the Companies for any Taxation purposes have been made or supplied on a proper basis, were punctually submitted, were accurate and complete when submitted and remain accurate and complete and are not the subject of any dispute, enquiry or investigation with any Taxation Authority, and, to Vendor's A-8 |
knowledge, there are no present circumstances that are likely to give rise to any such dispute, enquiry or investigation. (b) No action has been taken by the Companies in respect of which any consent or clearance from any Taxation Authority was required except in circumstances where such consent or clearance was validly obtained, and no conditions were attaching thereto. (c) The Companies have made and submitted each claim, disclaimer, election, notice and consent to have been made and submitted, and details of all such claims, disclaimers, elections, notices and consents are set forth in the Disclosure Schedule. (d) The Companies have never been subject to any enquiry, visit, audit, investigation or discovery order by any Taxation Authority nor, to Vendor's knowledge, are there any circumstances existing that make it likely that any such enquiry, visit, audit, investigation or discovery order will be made in the next 12 months. (e) The Disclosure Schedule sets out details of all notices given by any Taxation Authority to or in relation to the Companies, the provisions of which remain in force. (f) The Companies have sufficient records relating to past events to permit accurate calculation of the Taxation liability or relief that would arise upon a disposal or realisation on completion of each asset owned by the Companies before Closing. (g) Except as set out in the Disclosure Schedule, the Companies' Taxation affairs are not dependent on or subject to any concession, agreement or other formal or informal arrangement with any Taxation Authority. 11.3 ALL TAX PAID. (a) All Taxation for which the Companies are liable and that ought to have been paid has been paid on a timely basis to the appropriate Taxation Authority. (b) The Companies have not paid, within the three years ending on the date of this Agreement, nor will become liable to pay, any interest, penalty, fine or surcharge to any Taxation Authority. (c) The Companies have not received from any Taxation Authority (and have not subsequently repaid to or settled with that Taxation Authority) any payment to which they were not entitled or any notice in which their liability to Taxation was understated. 11.4 STAMP DUTY. (a) All documents that are in the possession of the Companies or under their control or to which the Companies are a party and that attract stamp duty have been properly stamped, and the Companies have duly paid all stamp duty to which they are, have been or may be made liable, and there is no liability for any penalty in respect of such duty nor, to Vendor's knowledge, are there any circumstances or transactions to which the Companies are or have been a party, which may result in the Companies becoming liable for any such penalty. 11.5 U.S. TAX CLASSIFICATION. Each of the Companies is classified for United States federal income tax purposes as a disregarded entity pursuant to Treas. Reg. Section 301.7701- A-9 |
3. Neither the Vendor nor the Companies will take any action to change the U.S. federal income tax classification of the Companies. 12 MISCELLANEOUS 12.1 NO BROKER'S FEES. No one is entitled to receive from the Companies any finder's fee, brokerage, or other commission in connection with the purchase of the Assets. 12.2 EFFECT OF ENTERING INTO THIS AGREEMENT. Compliance with the terms of this Agreement or Closing does not and will not: (a) conflict with or result in the breach of or constitute a default under any of the terms, conditions or provisions of: (i) any agreement or instrument to which the Companies are now a party, including the Contracts; or (ii) the Companies' Limited Liability Agreements or give rise to or cause to become exercisable any right of pre-emption or right of first refusal; or (iii) any loan to or mortgage created by the Companies or any lien, lease, order, judgment, award, injunction, decree, ordinance or regulation or any other restriction of any kind or character to which any property of the Companies are subject or by which the Companies are bound; (b) result in any present or future Indebtedness becoming due or capable of becoming due and payable prior to its stated maturity; (c) relieve any other party to an agreement or arrangement with the Companies, including the Contracts, of its obligations thereunder (whether contractual or otherwise) or enable it to vary or terminate its rights or obligations thereunder or determine any right or benefit enjoyed by the Companies or to exercise any right, whether under an agreement with, or otherwise in respect of, the Companies; (d) result in the creation or imposition of any Security Interest on any assets of the Companies; (e) cause the Companies to lose the benefit of any right or privilege they presently enjoy; (f) cause any person who normally does business with the Companies not to continue to do so on the same basis as previously; or (g) cause any licence or authority necessary or desirable for the continuation of the Companies' business to be determined or not renewed or continued or renewed on less favourable terms. 12.3 ACCURATE INFORMATION PROVIDED. All information given by the Vendor or any Vendor Group Companies or officials or professional advisers of the Companies or the Vendor to any of the directors, officials or professional advisers of the Purchaser in the course of negotiations leading to this Agreement, taken as a whole, was, when given, and remains and will at Closing be true and accurate in all material respects, and there is no matter or fact that has not been disclosed to the Purchaser that renders any such information untrue or misleading in any material respect. |
12.4 DISCLOSURE SCHEDULE ETC ACCURATE. All information contained in the Disclosure Schedule is true, complete and accurate in all respects and nothing has been omitted and, there is no matter or fact, which renders any such information untrue, inaccurate, incomplete or misleading in any material respect. 12.5 ALL INFORMATION DISCLOSED. All information relating to the Companies that the Vendor knows or should reasonably know and that is material to be known by the Purchaser in the context of the sale of the Assets has been disclosed to the Purchaser and, to the best of the knowledge, information and belief of the Vendor, there are no other facts or matters undisclosed to the Purchaser that could reasonably be expected to have a material adverse effect on the Companies or the Assets. 13 INSOLVENCY 13.1 NO INSOLVENCY EVENT. No Insolvency Event has occurred in relation to the Companies and no events or circumstances have arisen that entitle or could entitle any person to take any action, appoint any person, commence proceedings or obtain any order instigating an Insolvency Event. 14 THE VESSELS 14.1 VESSEL COMMITMENTS. In relation to each Vessel: (i) the Vessel is properly registered in the name of the Vendor under and pursuant to the flag and law of the Bahamas and all fees due and payable in connection with such registration have been paid; (ii) the Vessel is entered with Det norske Veritas (or another classification society of like standing) and has the highest classification rating issued by such society for a vessel of the type, age and class of the Vessel; (iii) the Vessel is in class without any recommendations or notation as to class or other requirement of the relevant classification society, and if the Vessel is in a port, it is in such condition that it can not be detached by any port state authority or the flag state authority for any deficiency; (iv) the Vessel is owned free of all maritime liens, encumbrances and mortgages except those that have been disclosed by the Vendor and accepted by the Purchaser and the terms of any charters that continue beyond the Closing Date, mortgages and loan documents do not prohibit the sale of the Companies; (v) the Vessel has been maintained in a proper and efficient manner in accordance with internationally accepted standards for good ship maintenance, is in good operating order, condition and repair and is seaworthy and all repairs made to the Vessel during the last two years and all known scheduled repairs due to be made and all know deficiencies have been disclosed in the Disclosure Schedule; (vi) the Vessel is not (i) under arrest or otherwise detained, (ii) other than in the ordinary course of business, in the possession of any person (other than her master and crew) or subject to a possessory lien; or (iii) other than in the ordinary course of business, subject to any other lien; (vii) the Vessel complies in all material respects with all laws, the requirements of any government agency having jurisdiction over the Vessel, the provisions of all A-11 |
international conventions and the provisions of the rules and regulations issued under international conventions applicable to that Vessel; (viii) the Vessel is supplied with valid and up-to-date safety, safety construction, safety equipment, radio, loadline, health, tonnage, trading and other certificates or documents as may for the time being be prescribed by the law of the flag of the Vessel or of any other pertinent jurisdiction, or that would otherwise be deemed necessary by a shipowner acting in accordance with internationally accepted standards for good ship management and operations; and (ix) no blacklisting or boycotting of any description whatsoever has been applied or currently exists against or in respect of the Vessel. |
SCHEDULE B
VESSELS
------------------------------- -------------------------- ------------------------- ---------------------------- VESSEL AFRICAN SPIRIT ASIAN SPIRIT EUROPEAN SPIRIT ------------------------------- -------------------------- ------------------------- ---------------------------- Built 2003 2004 2004 ------------------------------- -------------------------- ------------------------- ---------------------------- Yard Hyundai Hyundai Hyundai ------------------------------- -------------------------- ------------------------- ---------------------------- Class DNV (Det Norske Veritas) DNV DNV ------------------------------- -------------------------- ------------------------- ---------------------------- Flag Bahamas Bahamas Bahamas ------------------------------- -------------------------- ------------------------- ---------------------------- Place of Registration Nassau, The Bahamas Nassau, The Bahamas Nassau, The Bahamas Maritime Authority Maritime Authority Maritime Authority ------------------------------- -------------------------- ------------------------- ---------------------------- Call sign C6FW5 C6FW6 C6FW4 ------------------------------- -------------------------- ------------------------- ---------------------------- IMO (Registration) No. 9250737 9247431 9247429 ------------------------------- -------------------------- ------------------------- ---------------------------- Grt/Nrt 79668/48784 79668/48784 79668/48784 ------------------------------- -------------------------- ------------------------- ---------------------------- |