PAGE | ||||||||
PART I: FINANCIAL INFORMATION
|
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|
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Item 1. Financial Statements (Unaudited)
|
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|
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3 | ||||||||
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4 | ||||||||
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5 | ||||||||
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6 | ||||||||
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13 | ||||||||
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20 | ||||||||
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21 | ||||||||
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22 | ||||||||
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Exhibit 4.9 |
2
3
4
5
1. |
Basis of presentation
|
6
2. |
Adoption of New Accounting Pronouncements
|
7
3. |
Public Offering
|
4. |
Fair Value Measurements
|
8
5. |
Long-Term Debt
|
June 30, 2009 | December 31, 2008 | |||||||
$ | $ | |||||||
|
||||||||
USD-denominated Revolving Credit Facility due 2017
|
277,328 | 297,328 | ||||||
USD-denominated Term Loan due through 2017
|
29,700 | 31,500 | ||||||
Long-term debt of Dropdown Predecessor (Note 1)
|
| 92,311 | ||||||
|
||||||||
|
307,028 | 421,139 | ||||||
Less current portion
|
3,600 | 3,600 | ||||||
|
||||||||
Total
|
303,428 | 417,539 | ||||||
|
6. |
Derivative Instruments
|
(1) |
Excludes the margin the Company pays on its variable-rate debt, which as of June 30,
2009 was 0.6%.
|
9
6. |
Derivative Instruments
(Contd)
|
7. |
Capital Stock
|
8. |
Related Party Transactions
|
a. |
On June 24, 2009, the Company acquired a double-hull Suezmax, the 2003-built
Ashkini
Spirit
from Teekay Corporation for a total cost of $57.0 million, excluding $0.7 million
for working capital assumed. As described in Note 1, the acquisition was accounted for as
a reorganization of entities under common control and accounted for on a basis similar to
pooling of interest basis. The acquisition was funded using net proceeds of a follow-on
public offering of 7.0 million Class A common shares (see Note 3). No debt was assumed as
a result of the acquisition and the amount available to be drawn on the Companys revolving
credit facility increased by $58.0 million. A contribution of capital from Teekay
Corporation of $31.9 million, representing the excess of the historical book value of the
vessel over the purchase price, was recorded on the date of acquisition of the vessel.
|
b. |
During the three and six months ended June 30, 2009, $0.2 million and $0.5 million of
general and administrative expenses attributable to the operations of the Dropdown
Predecessor were incurred by Teekay Corporation and have been allocated to the Company.
During the three and six months ended June 30, 2008, $0.4 million and $1.4 million,
respectively, of general and administrative expenses attributable to the operations of the
Dropdown Predecessor were incurred by Teekay Corporation and have been allocated to the
Company
|
c. |
The amounts due to and from affiliates at June 30, 2009 and 2008, are without interest
or stated terms of repayment.
|
d. |
During the three and six months ended June 30, 2009 and 2008, $3.5 million, $7.0
million, $nil, and $nil respectively, of revenues were earned from Teekay Corporation as a
result of the Company chartering out the
Nassau Spirit
to Teekay Corporation under a
fixed-rate time-charter contract. In August 2009, the Company exercised its option to
extend the time-charter contract by one year. The time-charter contract for the
Nassau
Spirit
will now expire in August 2010
|
e. |
Pursuant to a long-term management agreement with Teekay Tankers Management Services
Ltd., a wholly owned subsidiary of Teekay Corporation (the
Manager
), the Company incurred
management fees of $1.3 million and $2.7 million for the three and six months ended June
30, 2009, respectively and $1.7 million and $2.8 million for the three and six months ended
June 30, 2008, respectively, for commercial, strategic, technical, administrative services
and performance fees. The management fee includes $0.2 million and $0.4 million for the
three and six months ended June 30, 2009, respectively, and $0.4 million for the three and
six months ended June 30, 2008 for commercial services, which have been recorded as voyage
expenses. The remainder of these fees is included in general and administrative expenses.
|
10
8. |
Related Party Transactions (Contd)
|
f. |
Pursuant to pooling arrangements managed by Teekay Chartering Limited and Gemini
Tankers LLC, both wholly owned subsidiaries of Teekay Corporation (collectively the Pool
Managers), the Company incurred pool management fees during the three and six months ended
June 30, 2009 of $0.4 million and $0.8 million, and the three and six months ended June 30,
2008, of $0.7 million and $1.1 million, respectively, with respect to Company vessels that
participate in the pooling arrangements. The Pool Managers provide commercial services to
the pool participants and administer the pools in exchange for a fee currently equal to
1.25% of the gross revenues attributable to each pool participants vessels and a fixed
amount per vessel per day which ranges from $275 (for the Suezmax tanker pool) to $350 (for
the Aframax tanker pool). Voyage revenues and voyage expenses of the Companys vessels
operating in these pool arrangements are pooled with the voyage revenues and voyage
expenses of other pool participants. The resulting net pool revenues, calculated on a time
charter equivalent basis, are allocated to the pool participants according to an agreed
formula. The Company accounts for the net allocation from the pools as voyage revenues in
net pool revenues from affiliates. For the three and six months ended June 30, 2009, the
Companys allocation from the pools was net of $4.3 million and $8.4 million, respectively
of voyage expense. For the three and six months ended June 30, 2008, the Companys
allocation from the pools was net of $8.8 million and $18.3 million, respectively of voyage
expenses. The pool receivable from affiliates as at June 30, 2009 and December 31, 2008
was $6.1 million and $9.1 million, respectively.
|
g. |
On April 7, 2008, the Company acquired two double-hull Suezmax tankers, the 2002-built
Ganges Spirit
and the 2003-built
Narmada Spirit
, from Teekay Corporation for a total cost
of $186.9 million, excluding $1.4 million for working capital assumed. As described in Note
1, the acquisition was accounted for as a reorganization of entities under common control
and accounted for on a basis similar to pooling of interest basis. Debt with a principal
amount of $73.3 million recorded in the Dropdown Predecessor was assumed by the Company on
the acquisition. Cash was obtained by drawing funds available under the Companys revolving
credit facility. Cash payments of $115.0 million to Teekay Corporation were recorded as a
reduction of the push-down debt of $108.1 million and a return of capital to Teekay
Corporation of $6.9 million, representing the excess of the purchase price over the
historical book value of the Dropdown Predecessor.
|
9. |
Supplemental Cash Flow Information
|
11
10. |
Earnings Per Share
|
Three Months Ended | Six Months Ended | |||||||||||||||
June 30, 2009 | June 30, 2008 | June 30, 2009 | June 30, 2008 | |||||||||||||
$ | $ | $ | $ | |||||||||||||
|
||||||||||||||||
Net income
|
16,894 | 26,272 | 32,535 | 35,948 | ||||||||||||
Net income attributable to the Dropdown Predecessor
|
656 | 3,942 | 2,164 | 3,936 | ||||||||||||
|
||||||||||||||||
Net income available for common stockholders
|
16,238 | 22,330 | 30,371 | 32,012 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Weighted-average number of common shares
|
25,461,538 | 25,000,000 | 25,232,044 | 25,000,000 | ||||||||||||
|
||||||||||||||||
Common stock and common stock equivalents
|
25,461,538 | 25,000,000 | 25,232,044 | 25,000,000 | ||||||||||||
|
||||||||||||||||
|
||||||||||||||||
Earnings per common share:
|
||||||||||||||||
- Basic and diluted
|
0.64 | 0.89 | 1.20 | 1.28 |
11. |
Recent Accounting Pronouncements
|
12. |
Subsequent Events
|
12
|
Voyage charters participating in pooling arrangements, which are charters for shorter
intervals that are priced on a current or spot market rate and then adjusted for pool
participation based on predetermined criteria; and
|
|
Time charters, whereby vessels are chartered to customers for a fixed period of time at
rates that are generally fixed, but may contain a variable component based on inflation,
interest rates or current market rates.
|
Voyage Charter | Time Charter | |||
Typical contract length
|
Single voyage | One year or more | ||
Hire rate basis
(1)
|
Varies | Daily | ||
Voyage expenses
(2)
|
We pay | Customer pays | ||
Vessel operating expenses
(3)
|
We pay | We pay | ||
Off-hire
(4)
|
Customer does not pay | Customer does not pay |
(1) |
Hire
rate refers to the basic payment from the charterer for the use of the vessel.
|
|
(2) |
Voyage expenses are all expenses unique to a particular voyage, including any bunker
fuel expenses, port fees, cargo loading and unloading expenses, canal tolls, agency fees
and commissions.
|
|
(3) |
Vessel operating expenses include crewing, repairs and maintenance, insurance, stores,
lube oils and communication expenses.
|
|
(4) |
Off-hire
refers to the time a vessel is not available for service.
|
13
|
Our financial results reflect the results of the interests in vessels acquired from
Teekay Corporation for all periods the vessels were under common control.
To date, we have
acquired three Suezmax tankers (the
Ganges Spirit,
the
Narmada Spirit
and the
Ashkini
Spirit
) from Teekay. These acquisitions were deemed to be business acquisitions between
entities under common control. Accordingly, we have accounted for these transactions in a
manner similar to the pooling of interest method. Under this method of accounting our
financial statements, for periods prior to the date the interests in these vessels were
actually acquired by us, are recast to include the results of these acquired vessels. The
periods recast include all periods that we and the acquired vessels were both under common
control of Teekay and had begun operations. As a result, our statements of income for the
three and six months ended June 30, 2009 and 2008, reflect the financial results of the
three Suezmax tankers for the periods under common control of Teekay prior to the
acquisition of the vessels by us, and such results for such periods are collectively
referred to as the
Dropdown Predecessor
.
|
|
Our voyage revenues are affected by cyclicality in the tanker markets.
The cyclical
nature of the tanker industry causes significant increases or decreases in the revenue we
earn from our vessels, particularly those we trade in the spot market. This affects the
amount of dividends, if any, we pay on our common stock from period to period.
|
|
Tanker rates also fluctuate based on seasonal variations in demand.
Tanker markets are
typically stronger in the winter months as a result of increased oil consumption in the
northern hemisphere but weaker in the summer months as a result of lower oil consumption in
the northern hemisphere and increased refinery maintenance. In addition, unpredictable
weather patterns during the winter months tend to disrupt vessel scheduling, which
historically has increased oil price volatility and oil trading activities in the winter
months. As a result, revenues generated by our vessels have historically been weaker during
the quarters ended June 30 and September 30, and stronger in the quarters ended March 31
and December 31.
|
|
Our vessel operating expenses are facing industry-wide cost pressures.
The oil shipping
industry is experiencing a global manpower shortage due to significant growth in the world
fleet. This shortage resulted in crew wage increases during 2007 and 2008. We expect the
trend of increasing crew compensation to continue during 2009, however, to a lesser extent
than has been experienced in recent years. Various cost saving initiatives are planned for
2009 which are expected to help temper the impact that crew wage increases have on overall
vessel operating expenses.
|
|
The amount and timing of drydockings of our vessels can significantly affect our
revenues between periods.
Our vessels are normally offhire when they are being drydocked.
During 2008, three of our vessels were drydocked. As of September 1, 2009, three of our
vessels have completed their scheduled drydockings for 2009. One of the vessels completed
its drydocking in the second quarter of 2009 and the additional three vessels completed their
drydockings during the third quarter of 2009. There are approximately 140 offhire days expected in the third quarter
associated with drydockings.
|
Three Months Ended | Six Months Ended | |||||||||||||||||||||||
(in thousands of U.S. | June 30, | June 30, | ||||||||||||||||||||||
dollars except percentages) | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||||||||||||||
|
||||||||||||||||||||||||
Revenues
|
31,005 | 42,836 | (27.6 | ) | 65,453 | 78,836 | (17.0 | ) | ||||||||||||||||
Voyage expenses
|
514 | 710 | (27.6 | ) | 1,094 | 817 | 33.9 | |||||||||||||||||
|
||||||||||||||||||||||||
Net voyage revenues
|
30,491 | 42,126 | (27.6 | ) | 64,359 | 78,019 | (17.5 | ) | ||||||||||||||||
Vessel operating expenses
|
7,911 | 8,059 | (1.8 | ) | 16,300 | 15,398 | 5.9 | |||||||||||||||||
Depreciation and amortization
|
7,230 | 6,837 | 5.7 | 14,261 | 13,537 | 5.3 | ||||||||||||||||||
General and administrative
|
1,783 | 2,043 | (12.7 | ) | 3,425 | 4,382 | (21.8 | ) | ||||||||||||||||
|
||||||||||||||||||||||||
Income from vessel operations
|
13,567 | 25,187 | (46.1 | ) | 30,373 | 44,702 | (32.1 | ) | ||||||||||||||||
|
||||||||||||||||||||||||
Interest gain (expense)
|
(2,114 | ) | (3,766 | ) | (43.9 | ) | (4,702 | ) | (8,960 | ) | (47.5 | ) | ||||||||||||
Interest income
|
26 | 225 | (88.4 | ) | 48 | 290 | (83.4 | ) | ||||||||||||||||
Realized and unrealized gain
(loss) on interest rate swap
|
5,475 | 4,633 | 18.2 | 6,843 | (71 | ) | (9,738.0 | ) | ||||||||||||||||
Other income (expense) net
|
(60 | ) | (7 | ) | 757.1 | (27 | ) | (13 | ) | 107.7 | ||||||||||||||
|
||||||||||||||||||||||||
Net income
|
16,894 | 26,272 | (35.7 | ) | 32,535 | 35,948 | (9.5 | ) | ||||||||||||||||
|
14
Three Months Ended June 30, 2009 | Three Months Ended June 30, 2008 | |||||||||||||||||||||||
Net | Average | Net | Average | |||||||||||||||||||||
Voyage | TCE per | Voyage | TCE per | |||||||||||||||||||||
Revenues (1) | Revenue | Revenue | Revenues (2) | Revenue | Revenue | |||||||||||||||||||
(in thousands) | Days | Day (1) | (in thousands) | Days | Day (2) | |||||||||||||||||||
|
||||||||||||||||||||||||
Voyage-charter contracts Aframax
|
$ | 5,933 | 334 | $ | 17,788 | $ | 14,426 | 329 | $ | 43,828 | ||||||||||||||
Voyage-charter contracts Suezmax
|
5,172 | 182 | 28,417 | 12,991 | 182 | 71,380 | ||||||||||||||||||
Time-charter contracts Aframax
|
13,642 | 434 | 31,417 | 12,303 | 394 | 31,226 | ||||||||||||||||||
Time-charter contracts Suezmax
(3)
|
6,475 | 91 | 71,158 | 3,855 | 91 | 42,366 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total
|
$ | 31,222 | 1,041 | $ | 29,999 | $ | 43,575 | 996 | $ | 43,744 | ||||||||||||||
|
(1) |
Excludes a total of $0.7 million in management fees and commissions payable by us to
Teekay Corporation for participating in pool arrangements managed by subsidiaries of Teekay
Corporation.
|
|
(2) |
Excludes a total of $1.2 million in management fees and commissions payable by us to
Teekay Corporation for participating in pool arrangements managed by subsidiaries of Teekay
Corporation.
|
|
(3) |
The
Ganges Spirit
is employed on a time-charter contract at a base rate of $30,500 per
day with a profit sharing agreement whereby we are entitled to the second $3,000 per day of
the vessels earnings above the base rate and to 50 percent of any earnings above $33,500
per day. The profit share amount is determined on an annual basis in the second quarter of
each year for the period from June 1 to May 31. We recognized $3.7 million and $1.0
million in the second quarter of 2009 and 2008, respectively, relating to the profit share
amount. The TCE rates per day for the Suezmax time-charter fleet for the three months
ended June 30, 2009 and 2008 were $30,928 and $31,612, respectively, excluding the profit
share amount recognized in the quarter. The TCE rates per day for total fleet for the
three months ended June 30, 2009 and 2008 were $26,482 and $42,761, respectively, excluding
the profit share amount recognized in the quarter.
|
Six Months Ended June 30, 2009 | Six Months Ended June 30, 2008 | |||||||||||||||||||||||
Net | Average | Net | Average | |||||||||||||||||||||
Voyage | TCE per | Voyage | TCE per | |||||||||||||||||||||
Revenues (1) | Revenue | Revenue | Revenues (2) | Revenue | Revenue | |||||||||||||||||||
(in thousands) | Days | Day (1) | (in thousands) | Days | Day (2) | |||||||||||||||||||
|
||||||||||||||||||||||||
Voyage-charter contracts Aframax
|
$ | 13,066 | 620 | $ | 21,101 | $ | 28,267 | 711 | $ | 39,760 | ||||||||||||||
Voyage-charter contracts Suezmax
|
13,165 | 362 | 36,368 | 19,608 | 326 | 60,215 | ||||||||||||||||||
Time-charter contracts Aframax
|
30,294 | 955 | 31,714 | 25,605 | 809 | 31,636 | ||||||||||||||||||
Time-charter contracts Suezmax
|
9,296 | 181 | 51,357 | 6,706 | 182 | 36,846 | ||||||||||||||||||
|
||||||||||||||||||||||||
Total
|
$ | 65,821 | 2,118 | $ | 31,071 | $ | 80,186 | 2,028 | $ | 39,541 | ||||||||||||||
|
(1) |
Excludes a total of $1.5 million in management fees and commissions payable by us to
Teekay Corporation for participating in pool arrangements managed by subsidiaries of Teekay
Corporation.
|
|
(2) |
Excludes a total of $2.2 million in management fees and commissions payable by us to
Teekay Corporation for participating in pool arrangements managed by subsidiaries of Teekay
Corporation.
|
|
(3) |
The profit share amount relating to the
Ganges Spirit
is determined on an annual basis
in the second quarter of each year for the period from June 1 to May 31. We recognized
$3.7 million and $1.0 million for the six months ended June 30, 2009 and 2008,
respectively. The
|
15
|
a decrease of $16.3 million and $20.9 million, respectively, as a result of the decrease
in average TCE rates earned by our vessels operating on spot-market-based voyage charters
and time-charter contracts;
|
||
|
a decrease of $0.8 million due to 27 offhire days relating to the Everest Spirit
drydocking for the three and six months ended June 30, 2009;
|
||
|
a decrease of $0.4 million due to 13 offhire days prior to the scheduled drydocking of
the Kyeema Spirit for the three and six months ended June 30, 2009.
|
|
an increase of $3.9 million and $6.5 million for the three and six months ended June 30,
2009, respectively, due to the Dropdown Predecessor
|
||
|
an increase of $2.7 million for the three and six months ended June 30, 2009,
respectively, relating to the profit-sharing amount earned by the Ganges Spirit;
|
|
an increase of $1.1 million and $2.2 million respectively, due to the Dropdown
Predecessor;
|
|
a decrease in the amortization of drydock expenditures during 2009.
|
|
a decrease of $0.2 million and $0.9 million from lower management fees for the three and
six months ended June 30, 2009, respectively;
|
|
an increase of $0.2 million and $0.5 million for the three and six months ended June 30,
2009, respectively, due to the Dropdown Predecessor;
|
16
|
incurring or guaranteeing additional indebtedness;
|
|
making certain negative pledges or granting certain liens; and
|
|
selling, transferring, assigning or conveying assets.
|
|
declare our obligations under the agreements immediately due and payable and terminate
any further loan commitments; and
|
|
foreclose on any of our vessels or other assets securing the related loans.
|
Six Months Ended | Six Months Ended | |||||||
June 30, 2009 | June 30, 2008 | |||||||
(in thousands) | (in thousands) | |||||||
Net cash flow from operating activities
|
$ | 42,248 | $ | 31,706 | ||||
Net cash flow used in financing activities
|
(47,706 | ) | (42,493 | ) | ||||
Net cash flow used in investing activities
|
(3,665 | ) | (4,346 | ) |
17
Remainder | 2010 | 2012 | ||||||||||||||||||
of | and | and | Beyond | |||||||||||||||||
(in millions of U.S. dollars) | Total | 2009 | 2011 | 2013 | 2013 | |||||||||||||||
|
||||||||||||||||||||
U.S. Dollar-Denominated Obligations:
|
||||||||||||||||||||
Long-term debt
(1)
|
307.0 | 1.8 | 7.2 | 7.2 | 290.8 | |||||||||||||||
Technical vessel management and administrative fees
|
50.8 | 1.9 | 7.5 | 7.5 | 33.9 | |||||||||||||||
|
||||||||||||||||||||
Total
|
357.8 | 3.7 | 14.7 | 14.7 | 324.7 | |||||||||||||||
|
(1) |
Excludes expected interest payments of $7.0 million (2009), $13.5 million (2010 and
2011), $13.0 million (2012 and 2013) and $18.3 million (beyond 2013). Expected interest
payments are based on the existing interest rates (fixed-rate loans) and LIBOR rate of 0.6%
plus a margin of 0.60% at June 30, 2009 (variable-rate loans). The expected interest
payments do not reflect the effect of an interest rate swap that we have used to hedge
certain of our floating-rate debt.
|
18
|
our future growth prospects and opportunities, including future vessel acquisitions;
|
|
tanker market fundamentals, including the balance of supply and demand in the tanker
market and spot tanker charter rates and oil demand;
|
|
the effectiveness of our chartering strategy in capturing upside opportunities and
reducing downside risks;
|
|
the sufficiency of working capital for short-term liquidity requirements;
|
|
crewing costs for vessels;
|
|
the duration of drydockings;
|
|
future capital expenditure commitments and the financing requirements for such
commitments;
|
|
our compliance with covenants under our credit facilities;
|
|
our hedging activities relating to foreign exchange, interest rate and spot market
risks; and
|
|
the ability of the counterparties to our derivative contracts to fulfill their
contractual obligations.
|
19
Expected Maturity Date | Fair Value | |||||||||||||||||||||||||||||||||||
Remainder | Asset / | |||||||||||||||||||||||||||||||||||
of 2009 | 2010 | 2011 | 2012 | 2013 | Thereafter | Total | (Liability) | Rate (1) | ||||||||||||||||||||||||||||
(in millions of U.S. dollars, except percentages) | ||||||||||||||||||||||||||||||||||||
Long-Term Debt:
|
||||||||||||||||||||||||||||||||||||
Variable Rate
(2)
|
| | | | | 277.3 | 277.3 | (240.4 | ) | 3.4 | % | |||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
Interest Rate Swap:
|
||||||||||||||||||||||||||||||||||||
Contract Amount
(2),(3)
|
| | | | | 100.0 | 100.0 | (14.0 | ) | 5.6 | % |
(1) |
Rate refers to the weighted-average effective interest rate for our long-term debt, including
the margin we pay on our variable-rate debt, and the average fixed rate we pay under our
interest rate swap agreement, which excludes the margin we pay on our variable-rate debt.
|
|
(2) |
Interest payments on U.S. Dollar-denominated debt and interest rate swap are based on LIBOR.
|
|
(3) |
The average variable rate paid to us under our interest rate swap is set quarterly at the
three-month LIBOR.
|
20
Shares which | ||||||||||||||||
Votes For | Votes Withheld | Abstained | Broker Non-Votes | |||||||||||||
C. Sean Day
|
31,731,616 | 3,738,653 | N/A | N/A | ||||||||||||
Bjorn Moller
|
31,928,886 | 3,541,383 | N/A | N/A | ||||||||||||
Peter Evensen
|
31,940,368 | 3,529,901 | N/A | N/A | ||||||||||||
Richard T. du Moulin
|
35,000,277 | 469,992 | N/A | N/A | ||||||||||||
Richard J.F. Bronks
|
34,269,170 | 1,201,099 | N/A | N/A | ||||||||||||
William Lawes
|
34,277,068 | 1,193,201 | N/A | N/A |
|
REGISTRATION STATEMENT ON FORM S-8 (FILE NO. 333-148055) FILED WITH THE SEC ON DECEMBER 13,
2007.
|
|
REGISTRATION STATEMENT ON FORM F-3 (NO. 333-159807) FILED WITH THE SEC ON JUNE 5, 2009.
|
21
22
TEEKAY TANKERS LTD.
Dated: September 30, 2009
By:
/s/ Vincent Lok
Vincent Lok
Chief Financial Officer
(Principal Financial and Accounting Officer)
Table of Contents
Exhibit
Number
4.9
Clause | Name | Page | ||||
|
||||||
1 |
Definitions and Interpretation
|
3 | ||||
|
||||||
2 |
Agreement For Sale
|
8 | ||||
|
||||||
3 |
Consideration
|
8 | ||||
|
||||||
4 |
Completion
|
8 | ||||
|
||||||
5 |
Warranties
|
10 | ||||
|
||||||
6 |
Remedies of the Purchaser
|
12 | ||||
|
||||||
7 |
Implementation
|
15 | ||||
|
||||||
8 |
Costs
|
15 | ||||
|
||||||
9 |
Other Provisions
|
15 | ||||
|
||||||
10 |
Notices
|
18 | ||||
|
||||||
11 |
Governing Law and Jurisdiction
|
18 | ||||
|
||||||
12 |
Termination
|
19 |
Schedule | Name | Page | ||||
|
||||||
1 |
Disclosure Schedule
|
20 | ||||
|
||||||
2 |
The Interests Transfer Documents
|
28 | ||||
|
||||||
3 |
Warranties and Representations
|
29 | ||||
|
||||||
4 |
The Vessel
|
42 | ||||
|
||||||
5 |
The Consideration Formula
|
43 | ||||
|
||||||
Execution Page | 44 | |||||
|
2
(1) |
Teekay Corporation
, a Marshall Islands company having a principal office at 4th Floor,
Belvedere Building, 69 Pitts Bay Road, Hamilton, HM08, Bermuda (the
Vendor
)
|
(2) |
Teekay Tankers Ltd.
, a Marshall Islands limited partnership having a principal office at 4th
Floor, Belvedere Building, 69 Pitts Bay Road, Hamilton, HM08, Bermuda (the
Purchaser
)
|
(A) |
The Vendor is the legal and beneficial owner of the Interests.
|
(B) |
Pursuant to the Contribution Agreement, the Vendor was obliged to offer for sale to the
Purchaser the Vessel together with m.v. GANGES SPIRIT, m.v. YAMUNA SPIRIT and m.v.
NARMADA SPIRIT within 18 months of the initial public offering of the Purchaser on 18
December 2007.
|
(C) |
The Contribution Agreement provides that the vessels referred to in Recital (B) above may be
offered for sale either individually, in groups or collectively.
|
(D) |
The Purchaser has previously purchased from the Vendor 100% of the entire equity interests or
share capital in Ganges Spirit LLC and Narmada Spirit LLC being the respective owners of m.v.
GANGES SPIRIT and m.v. NARMADA SPIRIT.
|
(E) |
Pursuant to the Memorandum, the Vendor has now elected to offer the Vessel for sale to the
Purchaser, which will involve
inter alia
the sale of the Interests by the Vendor to the
Purchaser.
|
(F) |
The Purchaser has agreed to purchase the Interests from the Vendor subject to the terms and
conditions of this Agreement.
|
1 |
DEFINITIONS AND INTERPRETATION
|
1.1 |
Definitions
|
3
(a) |
any violation or correction of violation of Environmental Laws by the
Vendor or the Vendor Group Companies; or
|
4
(b) |
any event or condition associated with ownership or operation by the Vendor
or the Vendor Group Companies of the Interests (including, without limitation, the
presence of Hazardous Substances on, under, about or migrating to or from the Vessel
or the disposal or release of Hazardous Substances generated by operation of the
Vessel), 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,
|
(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;
|
5
(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.
|
(a) |
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
|
(b) |
it has had a receiver, administrative receiver, manager or administrator
appointed over all or any substantial part of its undertaking or assets; or
|
(c) |
any event has occurred or situation arisen in any jurisdiction that has a
substantially similar effect to any of the foregoing.
|
6
1.2 |
Interpretation
|
|
1.2.1 |
Reference to:
|
(a) |
a person includes a legal or natural person, partnership, trust, company,
government or local authority department or other body (whether corporate or
unincorporated);
|
(b) |
a statutory or regulatory body shall include its successors and any
substituted body;
|
||
(c) |
the singular includes the plural and vice versa; and
|
||
(d) |
one gender includes all genders.
|
1.2.2 |
Unless otherwise stated, a reference to a Clause, sub-clause or Schedule is a reference to a
Clause or sub-clause of, or Schedule to, this Agreement and a reference to this Agreement
includes its Schedules.
|
1.2.3 |
Clause headings in this Agreement and in the Schedules are for ease of reference only and do
not affect its construction.
|
1.2.4 |
In construing this Agreement the so-called
eusdem generis
rule does not apply and
accordingly the interpretation of general words shall not be restricted by words indicating a
particular class or particular examples.
|
7
2 |
AGREEMENT FOR SALE
|
2.1 |
Sale and purchase of Interests
|
2.2 |
Absolute title to Interests; no Security Interest in Interests
|
3 |
CONSIDERATION
|
3.1 |
Determination of the Consideration
|
|
The Consideration shall be determined in accordance with the Consideration Formula.
|
||
3.2 |
Payment of Consideration
|
3.3 |
Vendors Undertakings
|
(a) |
that on Closing, it shall procure that the Company shall have no net
liabilities other than the liabilities Disclosed in the Disclosure Schedule;
|
(b) |
following the Closing Date and upon receiving any notices, correspondence,
information or enquiries in relation to the Company, the Interests, the Vessel or the
Transaction Documents, it shall forthwith pass copies thereof to the Purchaser and
shall hold in trust for the Company and account forthwith for any monies received
after the Closing Date on account of the Company.
|
4 |
COMPLETION
|
4.1 |
Timing and place of Closing
|
8
4.2 |
Vendors Closing obligations
|
4.2.1 |
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) |
A duly executed transfer in respect of the Interests 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);
|
(c) |
certified copies 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),
confirming that it has authorised the transfer of the Interests to the Purchaser;
|
(d) |
where applicable, all statutory and minute books (in every case written up
to, but not including, the Closing Date), common seals, certificates of formation and
certificates of amendment (or equivalent), cheque books, bank mandates and other
books and records (whether statutory, financial or otherwise) of the Company as
applicable and all certificates and documents of title relating to any investments of
the Company;
|
||
(e) |
the original or certified true copies of the Transaction Documents;
|
||
(f) |
the original or certified true copies of the Relevant Documents;
|
(g) |
evidence satisfactory to the Purchaser that all amounts payable by the
Company under any loan facilities made available by the Vendor (other than with
respect to 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 Company, and whether in relation to the Vessel or otherwise,
have been paid in full and all associated Security Interests (other than those
identified in the Disclosure Schedule) reassigned to the Company or to the person
giving the same; and
|
(h) |
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 the representations and Warranties (save as Disclosed
in the Disclosure Schedule or in writing not later than the time of Closing) of the
Vendor contained in this Agreement
|
4.3 |
Purchasers Closing obligations
|
(a) |
deliver or procure that there is delivered to the Vendor a certified copy
of the minutes of a meeting of its directors, 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 Consideration in accordance with Clause 3.2 (
Payment
of Consideration
).
|
9
4.4 |
Closing obligations not fulfilled
|
4.4.1 |
If either party fails, for any reason, to comply with any of its obligations under the
foregoing provisions of this Clause 4 (
Completion
), 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 (
Completion
) 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 partys 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.
|
4.4.2 |
If Closing is deferred to another date in accordance with Clause 4.4.1(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
|
5.2 |
Claims
|
(a) |
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;
|
(b) |
any legal proceedings in which any of the Purchaser Group Companies or the
Company makes a Claim; and
|
||
(c) |
the enforcement of any such settlement or judgement.
|
10
5.3 |
Reliance on Warranties
|
(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 Purchasers 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
|
5.5 |
Reduction in Consideration
|
5.6 |
Awareness of Vendor and Ordinary Course of Business
|
5.7 |
Provision of information
|
(a) |
any of the Warranties or any statement of fact contained elsewhere in this
Agreement, any Relevant Document or any 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 (
Provision of
information
); or
|
(c) |
any matter or question connected with or arising out of any of the
foregoing,
|
11
5.8 |
Disclosure in Disclosure Schedule
|
5.9 |
Notification of potential Claims before Closing
|
5.10 |
Organisation and good standing
|
5.11 |
Due authorisation
|
5.12 |
No Impediments
|
6 |
REMEDIES OF THE PURCHASER
|
6.1 |
Survival
|
12
6.2 |
Indemnification by the Vendor
|
6.2.1 |
The Vendor agrees, subject to the other terms and conditions of this Agreement and the
Transaction Documents, to indemnify each of the Purchaser, the Purchaser Group Companies and
the Company against and hold it harmless from any and all:
|
(a) |
losses and expenses to the Purchaser, any Purchaser Group Companies or the
other Company 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 (
Survival
);
|
(b) |
Covered Environmental Losses relating to the Interests 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;
|
(c) |
Losses or Expenses to the Purchaser, the Purchaser Group Companies or the
Company arising from:
|
(i) |
the failure of the Purchaser Group Companies, immediately
after the Closing Date, to be the owner of such ownership interests in and to
the Interests as are necessary to enable the Purchaser Group Companies to own
and operate the Interests in substantially the same manner that the Interests
were owned and operated by the Vendor Group Companies immediately prior to
the Closing Date; or
|
(ii) |
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 Interests in substantially
the same manner that the Interests were owned and operated by the Vendor
Group Companies immediately prior to the Closing Date,
|
(d) |
all federal, state, foreign and local income tax liabilities attributable
to the operation of the Interests prior to the Closing Date.
|
6.2.2 |
The aggregate liability of Vendor under Clause 6.2.1 shall not exceed $10 million.
Furthermore, no claim may be made against Vendor for indemnification pursuant to Clause 6.2.1
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
|
6.3.1 |
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 (
Indemnification by the
Vendor
), it will provide notice thereof in writing to the Vendor specifying the nature of and
specific basis for such claim.
|
13
6.3.2 |
The Vendor shall have the right to control all aspects of the defence of (and any
counterclaims with respect to) any claims brought against the Purchaser the Purchaser Group
Companies or the Company that are covered by the indemnification set forth in
Clause 6.2 (
Indemnification by the Vendor
), 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 the Purchaser) unless it
includes a full release of the Purchaser, the Purchaser Group Companies and the Company from
such matter or issues, as the case may be.
|
6.3.3 |
The Purchaser agrees to cooperate fully with the Vendor with respect to all aspects of the
defence of any claims covered by the indemnification set forth in Clause 6.2 (
Indemnification
by the Vendor
), including, without limitation, the prompt furnishing to the Vendor of any
correspondence or other notice relating thereto that the Purchaser, the Purchaser Group
Companies or the Company may receive, permitting the names of such parties to be utilized in
connection with such defence, the making available to the Vendor of any files, records or
other information of such parties that the Vendor considers relevant to such defence and the
making available to the Vendor of any employees of the Purchaser, the Purchaser Group
Companies or the Company; provided, however, that in connection therewith the 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 (
General Provisions
). In no event
shall the obligation of the Purchaser to cooperate with the 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 (
Remedies of the Purchaser
); provided, however,
that the Purchaser may, at its own option, cost and expense, hire and pay for counsel in
connection with any such defence. The 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 the Vendor shall have the right to retain sole control over such defence.
|
6.3.4 |
In determining the amount of any Loss or Expense for which the Purchaser, the Purchaser
Group Companies or the 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 the Purchaser, the Purchaser Group Companies or the Company in
connection with such efforts shall be promptly reimbursed by the Vendor in advance of any
determination of whether such insurance proceeds or other amounts will be recoverable.
|
6.3.5 |
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 other
Transaction Documents shall be pursuant to the indemnification provisions set forth in this
Clause 6 (
Remedies of the Purchaser
). 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 the 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).
|
14
7 |
IMPLEMENTATION
|
7.1 |
Further assurances
|
8 |
COSTS
|
8.1 |
Responsibility for costs
|
9 |
OTHER PROVISIONS
|
9.1 |
Entire agreement
|
9.2 |
Assignment
|
9.2.1 |
This Agreement shall be binding on and enure for the benefit of each partys successors and
permitted assigns. Save as provided in Clause 9.2.2, 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.
|
9.2.2 |
The Purchaser may assign all or any part of its rights and benefits under this Agreement to
any Purchaser Group Companies.
|
9.2.3 |
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.
|
15
9.3 |
Right of set-off, deductions and withholdings and Tax on payments
|
9.3.1 |
The Purchaser shall not be entitled to set off against the Consideration any sums owing to
it by the Vendor.
|
9.3.2 |
If any deduction or withholding is required by law to be made from any payment from one
party to another party under this Agreement or any other 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
Vendors liabilities as set out in Clause 6 (
Remedies of the Purchaser
). For the avoidance
of doubt, this Clause 9.3.2 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 9.3 (
Right of set-off, deductions and
withholdings and Tax on payments
).
|
9.3.3 |
If any payment from the Vendor to the Purchaser under this Agreement or any other
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 Vendors liabilities as set out in
Clause 6 (
Remedies of the Purchaser
). The parties shall agree to the amount of any increase
in a relevant payment to give effect to this Clause 9.3 (
Right of set-off, deductions and
withholdings and Tax on payments
). In the event that the parties are not able to agree the
amount of any increase, the amount thereof shall be certified by the Purchasers 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
|
9.4.1 |
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.
|
9.4.2 |
A waiver by either party to this Agreement of a breach of or default this Agreement or under
any other Transaction Document shall not constitute a waiver of any other breach or default,
shall not affect the other terms of this Agreement or any other Transaction Document or the
rights of any other person thereto and shall not prevent the Purchaser from subsequently
requiring compliance with the waived obligation.
|
9.4.3 |
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.
|
16
9.4.4 |
Unless specifically provided this Agreement and otherwise, the rights and remedies of the
Purchaser and the Vendor under or pursuant to any other 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.
|
9.6 |
Effect of Closing
|
9.7 |
Provisions of Agreement severable
|
9.8 |
Interest for late payment
|
9.9 |
Counterparts
|
9.10 |
Third party rights
|
17
10 |
NOTICES
|
10.1 |
General
|
(a) |
the Vendor
|
Name:
|
Teekay Corporation | |
|
||
Address:
|
Suite No. 1778, | |
|
48 Par-la-Ville Road, | |
|
Hamilton, HM 11 | |
|
Bermuda | |
|
||
Fax Number:
|
+011 441 292 3931 |
(b) |
the Purchaser
|
Name:
|
Teekay Tankers Ltd. | |
|
||
Address:
|
Suite No. 1778, | |
|
48 Par-la-Ville Road, | |
|
Hamilton, HM 11 | |
|
Bermuda | |
|
||
Fax Number:
|
+011 441 292 3931 |
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
|
11.2.1 |
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:
|
(a) |
the arbitrator proposed in the First Notice;
|
||
(b) |
an arbitrator appointed by the party that received the First Notice; and
|
(c) |
an arbitrator, who shall be the chairman, appointed by the two arbitrators
referred to in Clause 11.2.1(a) and Clause 11.2.1(b).
|
18
11.2.2 |
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 Clause 11.2.1(a)
shall be deemed appointed as sole arbitrator.
|
11.2.3 |
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
|
(a) |
by the mutual written consent of Vendor and Purchaser;
|
||
(b) |
by the Vendor, in the event of a material breach by the Purchaser of any
representation, Warranty, covenant or agreement of the Purchaser contained herein
that has not been cured or is not curable by the Closing Date; or
|
||
(c) |
by the Purchaser, in the event of a material breach by the Vendor of any
representation, Warranty, covenant or agreement of the Vendor contained herein that
has not been cured or is not curable by the Closing Date.
|
12.2 |
Effect of Termination
|
19
Document | Parties | Date | ||||||
|
||||||||
1.
|
Loan Agreement |
Borrowers / Lenders / Agent /Security
Trustee / Mandated Lease Arrangers / Bookrunners / Swap Provider |
28.11.2007 | |||||
|
||||||||
2.
|
Guarantee and Indemnity in respect of the various obligations of the A Borrowers together with Deed of Release |
Guarantor B / Security Trustee
Guarantor B / Security Trustee |
28.11.2007
18.11.2007 |
|||||
|
||||||||
3.
|
Guarantee and Indemnity in respect of the various obligations of the A Borrowers | Guarantor A / Security Trustee | 18.11.2007 | |||||
|
||||||||
4.
|
Guarantee and Indemnity in respect of the various obligations of the B Borrowers | Guarantor B / Security Trustee | 28.11.2007 | |||||
|
||||||||
5.
|
ISDA Master Agreement and schedule thereto | A Borrowers / Swap Provider | 28.11.2007 | |||||
|
||||||||
6.
|
ISDA Novation Agreement | A Borrowers / Swap Provider | 28.11.2007 | |||||
|
||||||||
7.
|
Pledge agreement in relation to the A Borrowers together with: | Pledgor B / Security Trustee | 18.12.2007 | |||||
|
||||||||
7.1
|
Irrevocable Proxies; and | Pledgor B | 18.12.2007 | |||||
|
||||||||
7.2
|
LLC Certificates | A Borrowers | 18.12.2007 | |||||
|
||||||||
8.
|
Pledge Agreement in relation to the B Borrowers together with: | Pledgor C / Security Trustee | 30.11.2007 | |||||
|
||||||||
8.1
|
Irrevocable Proxy; and | Pledgor C | 30.11.2007 | |||||
|
||||||||
8.2
|
LLC Certificates | B Borrowers | 21.11.2007 | |||||
|
||||||||
9.
|
First Priority Bahamas Ship Mortgage over m.v. EVEREST SPIRIT together with: | Everest Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
9.1
|
Transcript of Register | BMA | 10.12.2007 | |||||
|
||||||||
10.
|
Deed of Covenants | Everest Spirit Holding L.L.C. / Security Trustee | 10.12.2007 |
20
Document | Parties | Date | ||||||
|
||||||||
11.
|
Deed of Assignment together with: | Everest Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
11.1
|
Notice of Assignment | Everest Spirit Holding L.L.C. | 10.12.2007 | |||||
|
||||||||
11.2
|
Loss Payable Clause | Everest Spirit Holding L.L.C. | Undated | |||||
|
||||||||
12.
|
First Priority Bahamas Ship Mortgage over m.v. KANATA SPIRIT together with: | Kanata Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
12.1
|
Transcript of Register | BMA | 10.12.2007 | |||||
|
||||||||
13.
|
Deed of Covenants | Kanata Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
14.
|
Deed of Assignment together with: | Kanata Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
14.1
|
Notice of Assignment; and | Kanata Spirit Holding L.L.C. | 10.12.2007 | |||||
|
||||||||
14.2
|
Loss Payable Clause | Kanata Spirit Holding L.L.C. | undated | |||||
|
||||||||
15.
|
First Priority Bahamas Ship Mortgage over m.v. KAREELA SPIRIT together with: | Kareela Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
|
Transcript of Register | BMA | 10.12.2007 | |||||
|
||||||||
16.
|
Deed of Covenants | Kareela Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
17.
|
Deed of Assignment together with: | Kareela Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
17.1
|
Notice of Assignment; and | Kareela Spirit Holding L.L.C. | 10.12.2007 | |||||
|
||||||||
17.2
|
Loss Payable Clause | Kareela Spirit Holding L.L.C. | undated | |||||
|
||||||||
18.
|
First Priority Bahamas Ship Mortgage over m.v. KYEEMA SPIRIT together with: | Kyeema Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
18.1
|
Transcript of Register | BMA | 10.12.2007 | |||||
|
||||||||
19.
|
Deed of Covenants | Kyeema Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
20.
|
Deed of Assignment together with: | Kyeema Spirit Holding L.L.C. / Security Trustee | 10.12.2007 |
21
Document | Parties | Date | ||||||
|
||||||||
20.1
|
Notice of Assignment; and | Kyeema Spirit Holding L.L.C. | 10.12.2007 | |||||
|
||||||||
20.2
|
Loss Payable Clause | Kyeema Spirit Holding L.L.C. | undated | |||||
|
||||||||
21.
|
First Priority Bahamas Ship Mortgage over m.v. NASSAU SPIRIT together with: | Nassau Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
21.1
|
Transcript of Register | BMA | 10.12.2007 | |||||
|
||||||||
22.
|
Deed of Covenants | Nassau Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
23.
|
Deed of Assignment together with: | Nassau Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
23.1
|
Notice of Assignment; and Loss Payable Clause |
Nassau Spirit Holding L.L.C.
Nassau Spirit Holding L.L.C. |
10.12.2007
undated |
|||||
|
||||||||
24.
|
First Priority Bahamas Ship Mortgage over m.v. FALSTER SPIRIT together with: | Falster Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
24.1
|
Transcript of Register | BMA | 10.12.2007 | |||||
|
||||||||
25.
|
Deed of Covenants | Falster Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
26.
|
Deed of Assignment together with: | Falster Spirit Holding L.L.C. / Security Trustee | 10.12.2007 | |||||
|
||||||||
26.1
|
Notice of Assignment; and | Falster Spirit Holding L.L.C. | 10.12.2007 | |||||
|
||||||||
26.2
|
Loss Payable Clause | Falster Spirit Holding L.L.C. | undated | |||||
|
||||||||
27.
|
First Priority Bahamas Ship Mortgage over m.v. SOTRA SPIRIT together with: | Sotra Spirit Holding L.L.C. /Security Trustee | 10.12.2007 | |||||
|
||||||||
27.1
|
Transcript of Register | BMA | 10.12.2007 | |||||
|
||||||||
28.
|
Deed of Covenants | Sotra Spirit Holding L.L.C. /Security Trustee | 10.12.2007 | |||||
|
||||||||
29.
|
Deed of Assignment together with: | Sotra Spirit Holding L.L.C. /Security Trustee | 10.12.2007 | |||||
|
||||||||
29.1
|
Notice of Assignment; and | Sotra Spirit Holding L.L.C. | 10.12.2007 |
22
Document | Parties | Date | ||||||
|
||||||||
29.2
|
Loss Payable Clause | Sotra Spirit Holding L.L.C. | undated | |||||
|
||||||||
30.
|
First Priority Bahamas Ship Mortgage over m.v. GODAVARI SPIRIT together with: | Godavari Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
30.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
31.
|
Deed of Covenants | Godavari Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
32.
|
Deed of Assignment together with: | Godavari Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
32.1
|
Notice of Assignment; and | Godavari Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
32.2
|
Loss Payable Clause | Godavari Spirit Holding L.L.C. | undated | |||||
|
||||||||
33.
|
First Priority Bahamas Ship Mortgage over m.v. ISKMATI SPIRIT together with: | Iskmati Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
33.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
34.
|
Deed of Covenants | Iskmati Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
35.
|
Deed of Assignment together with: | Iskmati Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
35.1
|
Notice of Assignment; and | Iskmati Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
35.2
|
Loss Payable Clause | Iskmati Spirit Holding L.L.C. | undated | |||||
|
||||||||
36.
|
First Priority Bahamas Ship Mortgage over m.v. ASHKINI SPIRIT together with: | Ashkini Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
36.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
37.
|
Deed of Covenants | Ashkini Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
38.
|
Deed of Assignment together with: | Ashkini Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
38.1
|
Notice of Assignment | Ashkini Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
38.2
|
Loss Payable Clause | Ashkini Spirit Holding L.L.C. | undated |
23
Document | Parties | Date | ||||||
|
||||||||
39.
|
First Priority Bahamas Ship Mortgage over m.v. NARMADA SPIRIT together with: | Narmada Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
39.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
40.
|
Deed of Covenants | Narmada Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
41.
|
Deed of Assignment together with: | Narmada Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
41.1
|
Notice of Assignment; and | Narmada Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
41.2
|
Loss Payable Clause | Narmada Spirit Holding L.L.C. | undated | |||||
|
||||||||
42.
|
First Priority Bahamas Ship Mortgage over m.v. KAVERI SPIRIT together with: | Kaveri Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
42.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
43.
|
Deed of Covenants | Kaveri Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
44.
|
Deed of Assignment together with: | Kaveri Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
44.1
|
Notice of Assignment | Kaveri Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
44.2
|
Loss Payable Clause | Kaveri Spirit Holding L.L.C. | undated | |||||
|
||||||||
45.
|
First Priority Bahamas Ship Mortgage over m.v. GANGES SPIRIT together with: | Ganges Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
45.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
46.
|
Deed of Covenants | Ganges Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
47.
|
Deed of Assignment together with: | Ganges Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
47.1
|
Notice of Assignment | Ganges Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
47.2
|
Loss Payable Clause | Ganges Spirit Holding L.L.C. | undated | |||||
|
||||||||
48.
|
First Priority Bahamas Ship Mortgage over m.v. YAMUNA SPIRIT together with: | Yamuna Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
48.1
|
Transcript of Register | BMA | 30.11.2007 |
24
Document | Parties | Date | ||||||
|
||||||||
49.
|
Deed of Covenants | Yamuna Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
50.
|
Deed of Assignment together with: | Yamuna Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
50.1
|
Notice of Assignment | Yamuna Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
50.2
|
Loss Payable Clause | Yamuna Spirit Holding L.L.C. | undated | |||||
|
||||||||
51.
|
First Priority Bahamas Ship Mortgage over m.v. LUIT SPIRIT together with: | Luit Spirit Holding L.L.C. /Security Trustee | 30.11.2007 | |||||
|
||||||||
51.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
52.
|
Deed of Covenants | Luit Spirit Holding L.L.C. /Security Trustee | 30.11.2007 | |||||
|
||||||||
53.
|
Deed of Assignment together with: | Luit Spirit Holding L.L.C. /Security Trustee | 30.11.2007 | |||||
|
||||||||
53.1
|
Notice of Assignment | Luit Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
53.2
|
Loss Payable Clause | Luit Spirit Holding L.L.C. | undated | |||||
|
||||||||
54.
|
First Priority Bahamas Ship Mortgage over m.v. TEESTA SPIRIT together with: | Teesta Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
54.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
55.
|
Deed of Covenants | Teesta Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
56.
|
Deed of Assignment together with: | Teesta Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
56.1
|
Notice of Assignment | Teesta Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
56.2
|
Loss Payable Clause | Teesta Spirit Holding L.L.C. | undated | |||||
|
||||||||
57.
|
First Priority Bahamas Ship Mortgage over m.v. MAHANADI SPIRIT together with: | Mahanadi Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
57.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
58.
|
Deed of Covenants | Mahanadi Spirit Holding L.L.C. / Security Trustee | 30.11.2007 |
25
Document | Parties | Date | ||||||
|
||||||||
59.
|
Deed of Assignment together with: | Mahanadi Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
59.1
|
Notice of Assignment | Mahanadi Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
59.2
|
Loss Payable Clause | Mahanadi Spirit Holding L.L.C. | undated | |||||
|
||||||||
60.
|
First Priority Bahamas Ship Mortgage over m.v. ESTHER SPIRIT together with: | Esther Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
60.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
61.
|
Deed of Covenants | Esther Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
62.
|
Deed of Assignment together with: | Esther Spirit Holding L.L.C. / Security Trustee | 30.11.2007 | |||||
|
||||||||
62.1
|
Notice of Assignment | Esther Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
62.2
|
Loss Payable Clause | Esther Spirit Holding L.L.C. | undated | |||||
|
||||||||
63.
|
First Priority Bahamas Ship Mortgage over m.v. AXEL SPIRIT together with: | Axel Spirit Holding L.L.C. /Security Trustee | 30.11.2007 | |||||
|
||||||||
63.1
|
Transcript of Register | BMA | 30.11.2007 | |||||
|
||||||||
64.
|
Deed of Covenants | Axel Spirit Holding L.L.C. /Security Trustee | 30.11.2007 | |||||
|
||||||||
65.
|
Deed of Assignment together with: | Axel Spirit Holding L.L.C. /Security Trustee | 30.11.2007 | |||||
|
||||||||
65.1
|
Notice of Assignment | Axel Spirit Holding L.L.C. | 30.11.2007 | |||||
|
||||||||
65.2
|
Loss Payable Clause | Axel Spirit Holding L.L.C. | undated |
26
2 |
Vessel Documents
|
2.1 |
Shelltime 4 Time Charter Party dated 21
st
June 2006 made between (i) Ashkini
Spirit L.L.C. and (ii) Chevron Transport Corporation Ltd;
|
2.2 |
BMA Transcript of Register dated 30
th
November, 2007;
|
|
2.3 |
BMA Permanent Certificate of Registry dated 8
th
April 2008;
|
|
2.4 |
BMA Ship Radio Communication Licence dated 4
th
March, 2009;
|
|
2.5 |
BMA Minimum Safe Manning Document dated 14
th
January, 2009;
|
|
2.6 |
COFR Certificate dated 19
th
September 2007;
|
|
2.7 |
BMA Carving and Marking Note;
|
|
2.8 |
DNV Class Certificate dated 20
th
February, 2008;
|
2.9 |
Inspection report dated 25
th
March, 2009 in relation to m.v. ASHKINI SPIRIT.
|
3 |
Insurance Documents
|
3.1 |
Hull and Machinery (H&M) Policy
|
|
3.2 |
Increased Value (IV) Policy
|
|
3.3 |
War Policy
|
|
3.4 |
Protection and Indemnity (P&I) Policy
|
27
28
1 |
The Company and the Interests
|
(a) |
Information
|
(b) |
Title to Interests
|
(c) |
No arrangements relating to share capital
|
(d) |
No capital reorganisation
|
(i) |
made any issue of securities by way of capitalisation of profits or
reserves (including share premium account and capital redemption reserve); or
|
||
(ii) |
repaid, purchased or redeemed any shares of any class of its share capital
or otherwise reduced its share capital or any class of it;
|
29
(e) |
No agreement/arrangement
|
(i) |
the transfer or disposal of the Interests or any interest therein or any
restriction thereon or obligation relating thereto;
|
(ii) |
the exercise of votes at meetings of the board of the Company (if any) or
of the holders of any class of Interests; or
|
(iii) |
the right to appoint or remove any directors or officers of the Company
(where applicable).
|
(f) |
No Security Interest over assets
|
2 |
The Vendor
|
(a) |
Capacity of Vendor
|
(i) |
it has the requisite power and authority to enter into this Agreement and
the Transaction Documents to which it is a party and perform all its obligations
thereunder;
|
(ii) |
this Agreement and 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;
|
(iii) |
it has the power and authority to absolutely and unconditionally sell and
transfer the full legal and beneficial ownership in the Interests registered in its
name to the Purchaser on the terms set out in this Agreement;
|
(iv) |
the execution and delivery of this Agreement and 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;
|
(v) |
all consents, licences, approvals and authorisations required by it in
connection with this Agreement and the Transaction Documents to which it is a party
and the transactions contemplated thereby have been obtained and are in full force
and effect;
|
(vi) |
no action, suit, proceeding, litigation or dispute against it or any Vendor
Group Companies 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 this Agreement and the Transaction Documents to which it is a party
or that could materially and adversely affect the Interests; and
|
(vii) |
in so far as it is a body corporate:
|
(A) |
it is a body corporate duly incorporated and validly
existing under the laws of the jurisdiction in which it is incorporated;
|
30
(B) |
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.
|
(b) |
Vendor/Company relationship
|
(i) |
owe any indebtedness or other liability and which in aggregate exceeds
$100,000 to the Company whether actually or contingently, whether solely or jointly
with any other person and whether as principal or surety, and there is no such
indebtedness or liability and which in aggregate exceeds $100,000 due or owing by the
Company 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;
|
(ii) |
are party to any agreement, arrangement or understanding, other than this
Agreement and the Transaction Documents, with the Company or relating to the Company
or the Interests in which the Vendor, any Vendor Group Companies is or has been
interested, whether directly or indirectly, and there is no agreement, arrangement or
understanding to which the Company is a party and in which the Vendor, or any Vendor
Group Companies has or has had an interest, whether directly or indirectly; or
|
(iii) |
is entitled to a claim of any nature against the Company, or which
individually does not exceed $100,000, or has assigned to any person the benefit of a
claim against the Company to which it would otherwise be entitled.
|
3 |
Agreements
|
(a) |
Disclosure of Relevant Documents
|
(b) |
Enforceability of and compliance with agreements
|
(i) |
the Vendor has no reason to believe that the Company will be unable to
complete and fulfil each of the Relevant Documents by the due date and in accordance
with its terms;
|
(ii) |
the Company is in the possession or in the control of each Relevant
Document;
|
(iii) |
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 Company or increase
the obligations of the Company under the Relevant Documents;
|
(iv) |
each Relevant Document has been validly executed by the Company, is valid
and subsisting, has not been terminated and is fully enforceable against the Company
and, to the Vendors knowledge, the other parties to such agreement in accordance
with its terms;
|
31
(v) |
none of such Relevant Documents is subject to a Security Interest granted
or created by the Company or the Vendor Group Companies other than under the terms of
the Relevant Document;
|
(vi) |
to the Vendors 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 Relevant
Documents by any person other than the Company nor are there any circumstances likely
to give rise to such breach or default. The Company has not granted any time or
indulgence, or waived any right, in relation to any Relevant Document 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;
|
(vii) |
so far as the Vendor is aware, the Company has fulfilled all of its
obligations and performed and observed all warranties, undertakings, covenants and
agreements on its part to be fulfilled, performed and observed under each Relevant
Document;
|
(viii) |
no notice of any intention to terminate, repudiate, rescind, modify or disclaim any
provision of any Relevant Document has been given by the Company or, so far as the
Vendor is aware, received from a person other than the Company by the Company in
respect of any Relevant Document;
|
(ix) |
so far as the Vendor is aware, the Company has paid all Taxes, duties,
imposts and other charges payable in respect of the Relevant Documents so far as such
Taxes, duties, imposts and other charges fall upon the Company and have become due
and payable;
|
(x) |
all necessary licences, approvals and consents required by the Company
prior to the entry into of each of the Relevant Documents and for their continuation
were duly obtained and are subsisting and, to the Vendors knowledge, no
circumstances have arisen that may lead to withdrawal or failure to renew, if
applicable, of any such licence, approval or consent;
|
(xi) |
there are no disputes or outstanding claims pending or, to the Vendors
knowledge, threatened against the Company under the Relevant Documents and, to the
Vendors knowledge, no person is entitled to make, or has threatened to make, a claim
against the Company in respect of any representation, breach of condition or warranty
or other express or implied term relating to any of the Relevant Documents and no
matter exists that would or might enable a person other than the Company to make such
a claim or raise a set-off, deduction, withholding or counterclaim in any action for
breach of any Relevant Document or otherwise give any person other than the Company
the right to withhold or delay payment of any sum due from it under the terms of the
Relevant Document or the performance of any of its obligations thereunder;
|
(xii) |
so far as the Vendor is aware, no person (other than the parties to the
Relevant Documents) has any rights (including any Security Interests) in respect of
any such Transaction Documents or the assets the subject thereof;
|
(xiii) |
the execution of this Agreement by the Vendor and the exercise of its rights and
performance of its obligations under the Agreement does not constitute and will not
result in any breach of any Relevant Document or other agreement or treaty to which
the Vendor or the Company are a party;
|
32
(xiv) |
the obligations expressed to be assumed by the Vendor in this Agreement
are legal and valid obligations, binding on them in accordance with the terms of this
Agreement and no limit on any of their powers will be exceeded as a result of the
transaction contemplated by this Agreement or the performance by the Vendor, of its
obligations herein; and
|
(xv) |
so far as the Vendor is aware, no Insolvency Event has occurred in relation
to any third party to any Relevant Documents.
|
(c) |
No powers of attorney
|
(d) |
Change of control
|
(i) |
entitle any person to modify or terminate any Relevant Document or other
arrangement with the Company;
|
(ii) |
result in the breach by the Companies under any of the terms, conditions or
provisions of any Relevant Document or other instrument to which the Company is now a
party;
|
(iii) |
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
|
(iv) |
entitle any person to receive from the Company any finders fee, brokerage
or other commission in connection with the sale of the Interests.
|
(e) |
Offers and tenders
|
(f) |
Joint Ventures etc
|
(g) |
Competition/Anti-trust
|
33
(h) |
Restrictive practices
|
(i) |
Directors or Officers
|
4 |
Financial Arrangements
|
(a) |
Indebtedness
|
(b) |
Financing Arrangements, Collateral Transfer Arrangements
|
(c) |
Loans by the Company
|
(d) |
Debts
|
(e) |
No guarantee or Security Interests
|
34
(f) |
No indemnities given by the Company
|
|
The Company is not responsible (including on a contingent basis) for the indebtedness, or
for the default in the performance of any obligation, of any person nor are they 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.
|
||
(g) |
Bank accounts
|
|
Details of all bank accounts of the Company, and particulars of the balances of all the
Companys 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 Company has 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
|
|
(a) |
No other assets and liabilities
|
|
The Company has no assets other than the Vessel and the Company has no liabilities other
than those arising in connection with the Transaction Documents and as set forth in the
Disclosure Schedule and, save for its obligations under the Transaction Documents, there
are no agreements or arrangements to which the Company is a party that increase the
obligations of the Company under the Transaction Documents or that create or include any
other obligation that might be binding on the Company.
|
||
(b) |
Business activity
|
|
The only business activity of the Company since incorporation or formation has been the
acquisition, ownership, and operation of the Vessel.
|
||
6 |
Properties
|
|
The Company does not own, occupy or use any real property.
7
Insurance
|
||
The Company maintains the policies of insurance listed in the Disclosure Schedule and
attached to the Disclosure Schedule, each of which is in full force and effect and, to the
Vendors knowledge, not subject to being avoided for any reason.
|
||
8 |
Litigation and other Disputes
|
|
(a) |
No proceedings
|
|
The Company is not, and, to the Vendors knowledge, no director or officer of the Company
(in relation to the Companys affairs or, if resolved in a manner adverse to such director
or officer, could result in a materially adverse effect on the Companys 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 foregoing pending or, to the Vendors
knowledge, threatened or expected either against or by the Company, and, to the Vendors
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 Company.
|
35
(b) |
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 Company or, to the Vendors knowledge, any person
for whose acts the Company may be vicariously liable, and, to the Vendors knowledge,
there are no circumstances likely to give rise to vicarious liability of the Company, and
no injunction has been granted against the Company.
|
||
(c) |
No unlawful acts
|
|
The Company has 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
|
|
(a) |
Compliance by Company
|
|
The Company 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.
|
||
(b) |
Ultra vires
|
|
The Company is empowered and duly qualified to carry on business in all jurisdictions in
which its present business is now carried on and has not entered into any ultra vires
transaction.
|
||
(c) |
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
Company have been properly prepared and so filed or delivered.
|
||
(d) |
Limited Liability Company Agreement
|
|
The Limited Liability Company Agreement of, and all resolutions passed by, the Company and
all other legal requirements concerning the Company have been complied with. A copy of the
Companys 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.
|
36
(e) |
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 Company 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 Company. The Company has not received any notice
or allegation that any of the statutory books, books of accounts or other records of
whatsoever kind of the Company are inaccurate or incomplete or should be rectified.
|
||
(f) |
Companys name
|
|
The Company does not use or otherwise carry on business under any name other than its full
corporate name. The Company has the full right to use its corporate name without
restriction, and the Company and the Vendor are not aware of any actual or threatened
challenge to the use of that name in respect of the business of the Company or any claim
that any such use infringes any rights of any third party.
|
||
(g) |
Consents and licences
|
|
The Company holds any and all licences (including statutory licences), permissions,
authorisations, consents, registrations and exemptions required by the Company for the
operation of its business as now carried on, and, to the Vendors knowledge, none of these
is subject to revocation or cancellation for any reason.
|
||
(h) |
No penalties or fines
|
|
The Company nor any of its officers (or agents during the course of their duties) have
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 their fixed or moveable assets, real
property or products.
|
||
(i) |
No investigations and inquiries.
|
|
No investigations, inquiries or reviews by or on behalf of any
governmental or other body in respect of the Company or its business
or assets are pending or, to the Vendors 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
|
|
The Company does not, and has 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 Company).
|
37
11 |
Taxation
|
|
(a) |
Tax Residence.
|
(i) |
The Company was and had always been resident in The Marshall Islands for
the purposes of Taxation until August 1, 2007, at which time it became resident in
The Bahamas for the purposes of Taxation until February 29, 2008, at which time it
became resident in Bermuda for the purposes of Taxation, and the Company has 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.
|
||
(ii) |
The Company has never traded through a branch, agency or permanent
establishment situated outside The Marshall Islands, The Bahamas or Bermuda.
|
||
(iii) |
No circumstances exist whereby a person not resident in The Marshall
Islands, The Bahamas or Bermuda is assessable and chargeable to tax in the name of
the Company.
|
(b) |
Disclosures, Notices, Returns, Clearances and Records.
|
(i) |
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 Company 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
the Vendors knowledge, there are no present circumstances that are likely to give
rise to any such dispute, enquiry or investigation.
|
||
(ii) |
No action has been taken by the Company 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.
|
||
(iii) |
The Company has 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.
|
||
(iv) |
The Company has never been subject to any enquiry, visit, audit,
investigation or discovery order by any Taxation Authority nor, to the Vendors
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.
|
||
(v) |
The Disclosure Schedule sets out details of all notices given by any
Taxation Authority to or in relation to the Company, the provisions of which remain
in force.
|
||
(vi) |
The Company has 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 Company before
Closing.
|
||
(vii) |
Except as set out in the Disclosure Schedule, the Companys Taxation
affairs are not dependent on or subject to any concession, agreement or other formal
or informal arrangement with any Taxation Authority.
|
38
(c) |
All Tax Paid
|
(i) |
All Taxation for which the Company is liable and that ought to have been
paid has been paid on a timely basis to the appropriate Taxation Authority.
|
||
(ii) |
The Company has 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.
|
||
(iii) |
The Company has not received from any Taxation Authority (and has not
subsequently repaid to or settled with that Taxation Authority) any payment to which
it was not entitled or any notice in which its liability to Taxation was understated.
|
(d) |
Stamp Duty
|
|
All documents that are in the possession of the Company or under its control or to which
the Company is a party and that attract stamp duty have been properly stamped, and the
Company has duly paid all stamp duty to which it is, has been or may be made liable, and
there is no liability for any penalty in respect of such duty nor, to the Vendors
knowledge, are there any circumstances or transactions to which the Company is or has been
a party, which may result in the Company becoming liable for any such penalty.
|
||
(e) |
U.S. Tax Classification
|
|
The Company is classified for United States federal income tax purposes as a disregarded
entity pursuant to Treas. Reg. Section 301.7701-3. Neither the Vendor nor the Company
will take any action to change the U.S. federal income tax classification of the Company.
|
||
12 |
Miscellaneous
|
|
(a) |
No brokers fees
|
|
No one is entitled to receive from the Company any finders fee, brokerage, or other
commission in connection with the purchase of the Interests.
|
||
(b) |
Effect of entering into this Agreement
|
|
Compliance with the terms of this Agreement or Closing does not and will not:
|
(i) |
conflict with or result in the breach of or constitute a default under any
of the terms, conditions or provisions of:
|
(A) |
any agreement or instrument to which the Company is now a
party, including the Transaction Documents; or
|
||
(B) |
The Companys Limited Liability Agreement or give rise to
or cause to become exercisable any right of pre-emption or right of first
refusal; or
|
||
(C) |
any loan to or mortgage created by the Company 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
Company is subject or by which the Company is bound;
|
(ii) |
result in any present or future Indebtedness becoming due or capable of
becoming due and payable prior to its stated maturity;
|
39
(iii) |
relieve any other party to an agreement or arrangement with the Company,
including the Transaction Documents, 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 Company or to exercise
any right, whether under an agreement with, or otherwise in respect of, the Company;
|
||
(iv) |
result in the creation or imposition of any Security Interest on any assets
of the Company;
|
||
(v) |
cause the Company to lose the benefit of any right or privilege it
presently enjoys;
|
||
(vi) |
cause any person who normally does business with the Company not to
continue to do so on the same basis as previously; or
|
||
(vii) |
cause any licence or authority necessary or desirable for the continuation
of the Companys respective business to be determined or not renewed or continued or
renewed on less favourable terms.
|
(c) |
Accurate information provided
|
|
All information given by the Vendor or any Vendor Group Companies or officials or
professional advisers of the Company 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.
|
||
(d) |
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.
|
||
(e) |
All information disclosed
|
|
All information relating to the Company 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
Interests 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
Company or the Interests.
|
||
13 |
Insolvency
|
|
(a) |
No Insolvency event
|
|
No Insolvency Event has occurred in relation to the Company 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.
|
40
14 |
The Vessel
|
|
(a) |
Vessel Commitments
|
|
In relation to the Vessel:
|
(i) |
the Vessel is properly registered in the name of the Company 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 detained 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 in the Disclosure Schedule 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 Company;
|
||
(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 known deficiencies have been Disclosed in the Disclosure Schedule;
|
||
(vi) |
the Vessel is not:
|
(A) |
under arrest or otherwise detained;
|
||
(B) |
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
|
||
(C) |
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 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;
|
||
(ix) |
no blacklisting or boycotting of any description whatsoever has been
applied or currently exists against or in respect of the Vessel; and
|
||
(x) |
the Vessel has been delivered by the Company to and accepted on an
unconditional basis by the Charterer for service under and in accordance with the
terms and conditions of the Charter.
|
41
Vessel
|
ASHKINI SPIRIT | |
Built
|
2003 | |
Yard
|
Ulsan, Korea | |
Class
|
DNV | |
Flag
|
Bahamas | |
Place of Registration
|
Nassau | |
Call sign
|
C6WJ9 | |
IMO (Registration) No.
|
9239484 | |
Grt/Nrt
|
84789/53755 |
42
Fair Market Value of Vessel:
|
$ | 57,000,000 | ||
Plus Fair Market Value of Charter:
|
NA | * | ||
Less Companys debt outstanding under Facility Agreement on
Closing Date (April 7, 2008)
|
$ | Nil | ||
Equals Consideration:
|
$ | 57,000,000 |
* |
The Vessel trades in Gemini Tankers Suezmax Pool, and its charter revenue is accordingly pooled
with spot income from other vessels in the pool, making charter value irrelevant.
|
43