Form
20-F
|
X
|
Form
40- F
|
Yes
|
No
|
X
|
Yes
|
No
|
X
|
Yes
|
No
|
X
|
PART I: FINANCIAL INFORMATION |
PAGE
|
|||
Item 1. Financial Statements (Unaudited) | ||||
Report
of Independent Registered Public Accounting Firm
|
3
|
|||
Unaudited
Consolidated Statements of Income
|
||||
for
the three months ended March 31, 2008 and 2007
|
4
|
|||
Unaudited
Consolidated Balance Sheets
|
||||
as
at March 31, 2008 and December 31, 2007
|
5
|
|||
Unaudited
Consolidated Statements of Cash Flows
|
||||
for
the three months ended March 31, 2008 and 2007
|
6
|
|||
Notes
to the Unaudited Consolidated Financial Statements
|
7
|
|||
Item
2. Management’s Discussion and Analysis of Financial Condition
and Results of Operations
|
12
|
|||
Item
3. Quantitative and Qualitative Disclosures about Market
Risk
|
18
|
|||
PART
II: OTHER INFORMATION
|
19
|
|||
SIGNATURES
|
20
|
Vancouver, Canada, |
/s/ ERNST & YOUNG LLP
|
||
May 13, 2008 |
Chartered
Accountants
|
Three
Months Ended
March
31,
2008
|
Three
Months Ended
March
31,
2007
|
|||||||
$ | $ | |||||||
REVENUES
Time
charter revenues
($3.0 million and
$2.6 million for 2008 and 2007, respectively, from related parties)
(note 6d)
|
13,302 | 7,869 | ||||||
Pool revenues (note 6f) | 12,518 | - | ||||||
Voyage charter revenues | 851 | 31,986 | ||||||
26,671 | 39,855 | |||||||
OPERATING
EXPENSES
|
||||||||
Voyage
expenses
(note
6f)
|
96 | 10,742 | ||||||
Vessel
operating expenses
|
5,580 | 4,943 | ||||||
Depreciation
and amortization
|
3,489 | 3,904 | ||||||
General
and administrative expenses ($1.1 million and $3.2 million for 2008 and
2007, respectively, from related parties)
(notes 6a, 6b and
6e)
|
1,321 | 3,255 | ||||||
Total
operating expenses
|
10,486 | 22,844 | ||||||
Income
from vessel operations
|
16,185 | 17,011 | ||||||
OTHER
ITEMS
|
||||||||
Interest
expense ($nil and $0.6 million for 2008 and 2007, respectively, from
related parties)
(note
6c)
|
(2,206 | ) | (1,527 | ) | ||||
Interest
income
|
65 | - | ||||||
Other
(expense) income – net
|
(6 | ) | 1 | |||||
Total
other items
|
(2,147 | ) | (1,526 | ) | ||||
Net
income
|
14,038 | 15,485 | ||||||
Per
common share amounts:
|
||||||||
•
Basic and diluted earnings
(note
8)
|
0.56 | 1.03 | ||||||
•
Cash dividends declared
|
0.115 | - | ||||||
Weighted-average
number of common shares
outstanding:
|
||||||||
•
Basic and diluted
(note
8)
|
25,000,000 | 15,000,000 |
As
at
March
31,
2008
$
|
As
at
December
31, 2007
$
|
|||||||
ASSETS
|
||||||||
Current
Cash
and cash equivalents
|
44,477 | 34,839 | ||||||
Due
from Teekay Pool, net (
note
6f
)
|
6,160 | 1,600 | ||||||
Accounts
receivable (including $250 and $2,404 for 2008 and 2007, respectively,
from
related
parties)
|
5,173 | 2,494 | ||||||
Prepaid
expenses
|
1,735 | 2,078 | ||||||
Other
assets
|
121 | 10 | ||||||
Total
current assets
|
57,666 | 41,021 | ||||||
Vessels and equipment
(
note
3
)
At
cost, less accumulated depreciation of $81,449 (2007 -
$79,723)
|
265,406 | 267,729 | ||||||
Due
from Teekay Pool (
note
6f
)
|
1,000 | - | ||||||
Other
non-current assets
|
1,731 | 1,574 | ||||||
Total
assets
|
325,803 | 310,324 | ||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
||||||||
Current
Accounts
payable
|
1,467 | 787 | ||||||
Accrued
liabilities
|
3,972 | 3,828 | ||||||
Current
portion of long-term debt (
note 3
)
|
3,600 | 3,600 | ||||||
Current
portion of derivative instruments (
note 4
)
|
2,305 | 894 | ||||||
Due
to affiliates (
note
6c
)
|
3,943 | - | ||||||
Total
current liabilities
|
15,287 | 9,109 | ||||||
Long-term
debt (
note
3
)
|
144,600 | 145,500 | ||||||
Derivative
instruments (
note
4
)
|
10,809 | 6,921 | ||||||
Total
liabilities
|
170,696 | 161,530 | ||||||
Commitments
and contingencies (
note
3
)
|
||||||||
Stockholders'
equity
Common
stock and additional paid-in capital (300 million shares authorized; 12.5
million
Class
A and 12.5 million Class B shares issued and outstanding as of March 31,
2008
and
December 31, 2007) (
note
5
)
|
181,333 | 180,915 | ||||||
Deficit
|
(21,870 | ) | (33,033 | ) | ||||
Accumulated
other comprehensive (loss) income
|
(4,356 | ) | 912 | |||||
Total
stockholders' equity
|
155,107 | 148,794 | ||||||
Total
liabilities and stockholders’ equity
|
325,803 | 310,324 |
Three
Months Ended
March
31,
2008
$
|
Three
Months Ended
March
31,
2007
$
|
|||||||
Cash
and cash equivalents provided by (used for)
OPERATING
ACTIVITIES
Net
income
|
14,038 | 15,485 | ||||||
Non-cash
items:
|
||||||||
Depreciation
and amortization
|
3,489 | 3,904 | ||||||
Debt
issuance cost amortization
|
63 | 62 | ||||||
Other
- net
|
32 | - | ||||||
Change
in non-cash working capital items related to operating
activities
|
(1,931 | ) | 4,207 | |||||
Expenditures
for drydocking
|
(1,058 | ) | - | |||||
Net
operating cash flow
|
14,633 | 23,658 | ||||||
FINANCING
ACTIVITIES
Proceeds
from long-term debt
|
- | 80,564 | ||||||
Debt
issuance costs
|
(220 | ) | - | |||||
Scheduled
repayments of long-term debt
|
(900 | ) | (900 | ) | ||||
Prepayments
of long-term debt
|
- | (65,458 | ) | |||||
Share
issuance costs
|
(892 | ) | - | |||||
Cash
dividends paid
|
(2,875 | ) | - | |||||
Net
advances to affiliates
|
- | (319 | ) | |||||
Return
of capital
|
- | (37,440 | ) | |||||
Net
financing cash flow
|
(4,887 | ) | (23,553 | ) | ||||
INVESTING
ACTIVITIES
Expenditures
for vessels and equipment
|
(108 | ) | (105 | ) | ||||
Net
investing cash flow
|
(108 | ) | (105 | ) | ||||
Increase
in cash and cash equivalents
|
9,638 | - | ||||||
Cash
and cash equivalents, beginning of the period
|
34,839 | - | ||||||
Cash
and cash equivalents, end of the period
|
44,477 | - |
Fair
Value at
March
31, 2008
Asset
/
(Liability)
$
|
Level
1
$
|
Level
2
$
|
Level
3
$
|
|
Interest
rate swap agreement (1)
|
(13,114)
|
-
|
(13,114)
|
-
|
3.
|
Long-Term
Debt
|
March
31, 2008
$
|
December
31, 2007
$
|
|
USD-denominated
Revolving Credit Facility due
2017
|
114,000
|
114,000
|
USD-denominated
Term Loan due through
2017
|
34,200
|
35,100
|
148,200
|
149,100
|
|
Less
current
portion
|
3,600
|
3,600
|
Total
|
144,600
|
145,500
|
4.
|
Derivative
Instruments and Hedging Activities
|
Interest
Rate
Index
|
Principal
Amount
$
|
Fair
Value / Carrying
Amount
of Liability
$
|
Weighted-Average
Remaining Term
(years)
|
Fixed
Interest
Rate
(%)
(1)
|
|
LIBOR-Based
Debt:
|
|||||
U.S.
Dollar-denominated interest rate swap
(1)
|
USD LIBOR 3M
|
100,000
|
(13,318)
|
9.5
|
5.55
|
|
____________________
|
(1)
|
Excludes
the margin the Company pays on its variable-rate debt, which as of March
31, 2008 was 0.6%
|
5.
|
Capital
Stock
|
5.
|
Capital
Stock (cont’d)
|
6.
|
Related
Party Transactions
|
a.
|
Prior
to the IPO, the Predecessor’s vessels were managed by subsidiaries of
Teekay Corporation. Pursuant to the associated management services
agreements, the Predecessor incurred general and administrative expenses
of $1.2 million for the three months ended March 31,
2007.
|
b.
|
During
the three months ended March 31, 2007, $2.0 million of general and
administrative expenses attributable to the operations of the Predecessor
prior to the IPO were incurred by Teekay Corporation and have been
allocated to the Predecessor.
|
c.
|
During
the three months ended March 31, 2007, $0.6 million of interest expense
was incurred on loans advanced from Teekay Corporation and its
subsidiaries to the Predecessor prior to the IPO. Interest expense was
allocated to the Predecessor based upon the weighted-average outstanding
balance of these loans and the weighted-average interest rate outstanding
on Teekay Corporation’s loan facilities that were used to finance these
loans. The amounts due to affiliates at March 31, 2008 are without
interest or stated terms of
repayment.
|
d.
|
During
the three months ended March 31, 2008 and 2007, $3.0 million and $2.6
million, respectively, of revenues were earned from Skaugen PetroTrans
Inc., a company in which Teekay Corporation owns a 50% beneficial
interest.
|
e.
|
Pursuant
to a long-term management agreement with Teekay Tankers Management
Services Ltd., a wholly owned subsidiary of Teekay Corporation, the
Company incurred management fees of $1.1 million for the three months
ended March 31, 2008 for commercial, strategic, technical and
administrative services. The management agreement provides for payment to
Teekay Tankers Management Services of a performance fee in certain
circumstances. If Gross Cash Available for Distribution for a given fiscal
year exceeds $3.20 per share of our outstanding common stock (or the
Threshold
), the Company
is generally required to pay a performance fee equal to 20% of all Gross
Cash Available for Distribution for such year in excess of the Threshold.
Cash Available for Distribution represents net income plus depreciation
and amortization, loan cost amortization, non-cash tax costs and any
write-offs or other non-recurring items. Gross Cash Available for
Distribution represents Cash Available for Distribution without giving
effect to any deductions for performance fees and reduced by the amount of
any reserves the Company's board of directors may have taken during the
applicable fiscal period that have not already reduced the Cash Available
for Distribution. No performance fees were payable by the Company for the
three months ended March 31, 2008.
|
f.
|
Pursuant to a pool
agreement with Teekay Chartering Limited, a wholly owned subsidiary of
Teekay Corporation, the Company incurred pool management fees of $0.4
million for the three months ended March 31, 2008. Teekay Chartering
Limited provides commercial services to the pool participants and
administers the pool in exchange for a fee currently equal to $350 per
vessel per day plus 1.25% of the gross revenues attributable to each pool
participant’s vessels.
Voyage revenues and voyage expenses of the
Company’s vessels operating in pool arrangements are pooled with the
voyage revenues and voyage expenses of other pool participants. The
resulting net pool revenues, calculated on the time charter equivalent
basis, are allocated to the pool participants according to an agreed
formula. The Company accounts for the net allocation from the pool as
voyage revenues. For the three months ended March 31, 2008, the Company’s
allocation from the pool was net of $9.5 million of voyage
expenses.
|
7.
|
Comprehensive
Income
|
Three
Months Ended
|
||||||||
March
31,
2008
$
|
March
31,
2007
$
|
|||||||
Net
income
|
14,038 | 15,485 | ||||||
Other
comprehensive income (loss):
|
||||||||
Unrealized
loss on qualifying cash flow hedging instruments
|
(5,338 | ) | - | |||||
Realized
loss on qualifying cash flow hedging instruments
|
70 | - | ||||||
Comprehensive
income
|
8,770 | 15,485 |
8.
|
Earnings
Per Share
|
Three
Months Ended
|
||||||||
March
31,
2008
$
|
March
31,
2007
$
|
|||||||
Net
income available for common stockholders
|
14,038 | 15,485 | ||||||
Weighted-average
number of common shares
|
25,000,000 | 15,000,000 | ||||||
Common
stock and common stock equivalents
|
25,000,000 | 15,000,000 | ||||||
Earnings
per common share:
|
||||||||
-
Basic and diluted
|
0.56 | 1.03 |
·
|
Voyage
charters, which are charters for shorter intervals that are priced on a
current, or “spot,” market rate;
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.
|
(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.
|
·
|
Our
financial results reflect changes in our capital
structure.
The ship-owning subsidiaries for seven of the nine
vessels in our fleet were borrowers under a revolving credit facility
along with other subsidiaries of Teekay Corporation. This facility, which
was repaid prior to our initial public offering, was previously used in
part for corporate-related investments of Teekay Corporation.
Consequently, the amount outstanding under this facility fluctuated
significantly during the period from January 1, 2007 to December 18,
2007 and our historical interest expense is not necessarily indicative of
our interest expense following our initial public
offering.
|
·
|
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 will affect
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 general
and administrative expenses
are
affected
by
our
Management
Agreement and costs we incur from being a public company.
In
connection with our initial public offering, we entered into a long-term
management agreement (the
Management Agreement
)
with Teekay Tankers Management Services Ltd., a subsidiary of Teekay
Corporation (or
our Manager
). Under
this agreement, our Manager provides to us commercial, technical,
administrative and strategic services. We pay a market-based fee for these
services. Our general and administrative expenses prior to our initial
public offering reflect an allocation of general and administrative
expenses from Teekay Corporation. This allocation may not be equivalent to
a market-based fee and, thus, our general and administrative expenses
for periods preceding our initial public offering may not reflect what we
incur following the public offering. We expect that the annual expenses we
incur after our initial public offering under the Management Agreement for
commercial, technical, administrative and strategic services will be lower
than our general and administrative expenses for comparable periods prior
to our initial public offering. However, we may incur additional general
and administrative expenses as a result of our Manager being entitled to a
performance fee under the Management Agreement under certain
circumstances. Please read Note 6(e) to our consolidated financial
statements included in this Report. In addition, we are also
incurring additional general and administrative expenses as a result of
being a publicly traded company, including costs associated with annual
reports to stockholders and SEC filings, investor relations, The New York
Stock Exchange annual listing fees and tax compliance
expenses.
|
·
|
Our vessel
operating
expenses
are facing
industry-wide cost pressures.
The shipping industry is
experiencing a global manpower shortage due to significant growth in the
world fleet. This shortage has resulted in crew wage increases during
2007, the effect of which is included the "--Results of Operations"
section below. We expect a trend of increasing crew compensation to
continue throughout 2008.
|
·
|
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 March 2008, one of our vessels, the
Nassau Spirit
,
was in drydock for 3
days. We estimate that this vessel will be offhire for an additional 76
days during the three months ending June 30, 2008. None of our vessels
were in drydock during 2007.
|
Three
Months Ended March 31,
|
||||||||
2008
|
2007
|
|||||||
Voyage revenues
|
$ | 26,671 | $ | 39,855 | ||||
Voyage expenses
|
96 | 10,742 | ||||||
Net voyage revenues
|
26,575 | 29,113 | ||||||
Vessel operating expenses
|
5,580 | 4,943 | ||||||
Depreciation and amortization
|
3,489 | 3,904 | ||||||
General and administrative
|
1,321 | 3,255 | ||||||
Income from vessel operations
|
16,185 | 17,011 | ||||||
Interest expense
|
(2,206 | ) | (1,527 | ) | ||||
Interest income
|
65 | - | ||||||
Other – net
|
(6 | ) | 1 | |||||
Net income
|
$ | 14,038 | $ | 15,485 |
Three
Months Ended March 31,
2008
|
Three
Months Ended March 31,
2007
|
|||||||||||||||||||||||
Net
Voyage
Revenues
(1)
(in
thousands)
|
Revenue
Days
|
TCE
per
Revenue
Day
(1)
|
Net
Voyage
Revenues
(in
thousands)
|
Revenue
Days
|
TCE
per
Revenue
Day
|
|||||||||||||||||||
Voyage-charter
contracts
|
$ | 13,841 | 382 | $ | 36,253 | $ | 21,318 | 532 | $ | 40,041 | ||||||||||||||
Time-charter
contracts
|
13,302 | 415 | 32,025 | 7,795 | 269 | 28,945 | ||||||||||||||||||
Total
|
$ | 27,143 | 797 | $ | 34,050 | $ | 29,113 | 801 | $ | 36,314 |
·
|
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.
|
Three
Months Ended
March
31, 2008
(in
thousands)
|
Three
Months Ended
March
31, 2007
(in
thousands)
|
|
Net
cash flow from operating activities
|
$14,633
|
$23,658
|
Net
cash flow used in financing activities
|
(4,887)
|
(23,553)
|
Net
cash flow used in investing activities
|
(108)
|
(105)
|
(in
millions of U.S. dollars)
|
Total
|
Remainder
of
2008
|
2009
and
2010
|
2011
and
2012
|
Beyond
2012
|
U.S.
Dollar-Denominated Obligations:
|
|||||
Long-term
debt
(1)
|
148.2
|
2.7
|
7.2
|
7.2
|
131.1
|
Total
|
148.2
|
2.7
|
7.2
|
7.2
|
131.1
|
(1)
|
Excludes
expected interest payments of $5.7 million (remainder of 2008), $15.2
million (2009 and 2010), $14.6 million (2011 and 2012) and $33.7 million
(beyond 2012). Expected interest payments are based on the existing
interest rates (fixed-rate loans) and LIBOR plus margin of 0.60% at March
31, 2008 (variable-rate loans). The expected interest payments do not
reflect the effect of a related interest rate swap that we have used to
hedge certain of our floating-rate
debt.
|
·
|
our
future growth prospects and
opportunities;
|
·
|
tanker
market fundamentals, including the balance of supply and demand in the
tanker market and spot tanker charter rates and oil
production;
|
·
|
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;
|
·
|
the
ability of the counter-parties to our derivative contracts to fulfill
their contractual obligations; and
|
·
|
the
growth of global oil demand.
|
ITEM
3 -
|
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
|
Expected
Maturity Date
|
|||||||||
Remainder
of
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
Total
|
Fair
Value
Asset
/ (Liability)
|
Rate
(1)
|
|
(in
millions of U.S. dollars, except percentages)
|
|||||||||
Long-Term
Debt:
|
|||||||||
Variable
Rate
(2)
|
-
|
-
|
-
|
-
|
-
|
114.0
|
114.0
|
(114.0)
|
3.5%
|
Interest Rate
Swap:
|
|||||||||
Contract
Amount
(2),(3)
|
-
|
-
|
-
|
-
|
-
|
100.0
|
100.0
|
(13.3)
|
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.
|
|
None
|
|
None
|
|
None
|
4.1
|
Agreement
dated April 7, 2008 for Teekay Tankers Ltd. to acquire Teekay
Corporation’s ownership interest in Ganges Spirit
L.L.C.
|
4.2
|
Agreement
dated April 7, 2008 for Teekay Tankers Ltd. to acquire Teekay
Corporation’s ownership interest in Narmada Spirit
L.L.C.
|
·
|
REGISTRATION
STATEMENT ON FORM S-8 (FILE NO. 333-148055) FILED WITH THE SEC ON DECEMBER
13, 2007
|
Dated:
May 27, 2008
|
TEEKAY
TANKERS LTD.
By: /s/ Vincent
Lok
Vincent
Lok
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
|
Vancouver, Canada, |
/s/
Ernst & Young LLP
|
||
May 27, 2008 |
Chartered
Accountants
|
as
Vendor
and
TEEKAY
TANKERS LTD.
as
Purchaser
|
relating
to
the
sale and purchase of the entire ownership interests in
GANGES
SPIRIT L.L.C.
(formerly
DELAWARE SHIPPING L.L.C)
|
Clause | Name | Page |
1
|
Definitions and
Interpretation
|
1
|
2
|
Agreement
For Sale
|
6
|
3
|
Consideration
|
6
|
4
|
Completion
|
7
|
Warranties
|
8
|
6
|
Remedies
of the Purchaser
|
11
|
7
|
Implementation
|
13
|
8
|
Costs
|
13
|
9
|
Other
Provisions
|
13
|
10
|
Notices
|
16
|
11
|
Governing
Law and Jurisdiction
|
17
|
12
|
Termination
|
17
|
Schedule | Name | Page |
1
|
Disclosure
Schedule
|
19
|
2
|
The
Interests Transfer Documents
|
27
|
3
|
Warranties
and Representations
|
28
|
4
|
The
Vessel
|
42
|
5
|
The
Consideration Formula
|
43
|
Execution
Page
|
44
|
(1)
|
Teekay Corporation
, a
Marshall Islands company having a principal office at Bayside House,
Bayside Executive Park, West Bay Street & Blake Road, P.O. Box
AP-59212, Nassau, Bahamas (the “
Vendor
”)
|
(2)
|
Teekay Tankers Ltd.
, a
Marshall Islands limited partnership having a principal office at Bayside
House, Bayside Executive Park, West Bay Street & Blake Road, P.O. Box
AP-59212, Nassau, Bahamas (the “
Purchaser
”)
|
(A)
|
The
Vendor is the legal and beneficial owner of the
Interests.
|
(B)
|
Pursuant
to the Contribution Agreement, the Vendor is obliged to offer for sale to
the Purchaser the Vessel together with m.v. “NARMADA SPIRIT”, m.v. “YAMUNA
SPIRIT” and m.v. “ASHKINI 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)
|
Pursuant
to the Memorandum, the Vendor has elected to first offer the Vessel
together with m.v. “NARMADA SPIRIT” for sale to the Purchaser, which will
involve
inter
alia
the sale of the Interests by the Vendor to the
Purchaser.
|
(E)
|
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
|
(a)
|
any
violation or correction of violation of Environmental Laws by the Vendor
or the Vendor Group Companies; or
|
(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;
|
(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.
|
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.
|
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
|
3.2
|
Payment
of Consideration
|
3.3
|
Vendor’s
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
|
4.2
|
Vendor’s
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)
|
duly
executed transfers 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)
|
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) and any other agreements or obligations entered into by the
Company for the benefit of itself or any other person have been terminated
or released and, in relation to Security Interests, 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 representations and Warranties of the
Vendor contained in this Agreement.
|
4.3
|
Purchaser’s
Closing obligations
|
(a)
|
deliver
or procure that there is delivered to the Vendor a certified copy of the
minutes of a meeting of the directors of its general partner, authorising
the execution of this Agreement and any other Transaction Document that it
is to execute pursuant to this
Agreement;
|
(b)
|
pay
to the Vendor the Consideration in accordance with Clause 3.2 (
Payment of
Consideration
).
|
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
party’s rights (whether under this Agreement or the general law) as
regards the obligations with which the first party has not complied;
or
|
(c)
|
waive
all or any of the obligations in question of the first
party.
|
4.4.2
|
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.
|
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 Purchaser’s rights in respect thereof will not be
in any way impaired as a result of any other information being possessed
by or available to any Purchaser Group Companies or any officer, employee,
professional or financial adviser of, or person acting on behalf of, the
Purchaser or any Purchaser Group
Companies.
|
5.4
|
Warranties
are separate and independent
|
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,
|
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
|
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.
|
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).
|
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 party’s
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.
|
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
Vendor’s 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 Vendor’s 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 Purchaser’s auditors acting
as experts whose decision in respect thereof shall be binding on the
relevant parties except in the case of manifest
error.
|
9.4
|
Waivers,
rights and remedies
|
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.
|
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.
|
9.5
|
Variations
|
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
|
10
|
NOTICES
|
10.1
|
General
|
(a)
|
the
Vendor
|
(b)
|
the
Purchaser
|
11
|
GOVERNING
LAW AND JURISDICTION
|
11.1
|
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).
|
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
|
1
|
Finance
Documents
|
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
|
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
|
Nassau
Spirit Holding L.L.C.
|
10.12.2007
|
|
Loss
Payable Clause
|
Nassau
Spirit Holding L.L.C.
|
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
|
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
|
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
|
59.
|
Deed
of Assignment together with:
|
Mahanadi
Spirit Holding L.L.C. / Security Trustee
|
30.11.2007
|
2
|
Vessel
Documents
|
2.1
|
Shell
Time4 Time Charter Party dated 18 April 2005 made between (i) Sabine
Shipping L.L.C. and (ii) Hyundai Merchant Marine Co.
Ltd;
|
2.2
|
Novation
Agreement dated 7 April 2008 made between (i) Laurel Shipping LLC (into
which has formerly been merged Sabine Shipping L.L.C.), (ii) Ganges Spirit
L.L.C. and (iii) Hyundai Merchant Marine Co.
Ltd;
|
2.3
|
Pool
Agreement dated 1 December 2003 made between (i) Gemini Tankers L.L.C and
(ii) the Participants (as defined in the Pool
Agreement);
|
2.4
|
BMA
Transcript of Register dated 30 November
2007;
|
2.5
|
BMA
Provisional Certificate of Registry dated 15 July 2007;
|
2.6
|
BMA
Ship Radio Communication Licence dated 15 July
2007;
|
2.7
|
BMA
Minimum Safe Manning Document dated 15 July 2007;
|
2.8
|
COFR
Certificate dated 15 July 2007;
|
2.9
|
BMA
Carving and Marking Note dated 15 July 2007;
|
2.9
|
Det
Norske Veritas Class Status Report dated 6 July
2007;
|
2.11
|
Det
Norske Veritas Class Status Report dated 10 February 2008;
and
|
2.12
|
Inspection
report dated 16 - 17 February 2008 in relation to m.v. “GANGES SPIRIT”.
|
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;
|
(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;
|
(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 Vendor's knowledge, the other parties to such
agreement in accordance with its
terms;
|
(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 Vendor's knowledge, there is no and has not been, at any time, any
breach of, or any default in the performance of, the terms of any such
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 Vendor's
knowledge, no circumstances have arisen that may lead to withdrawal or
failure to renew, if applicable, of any such licence, approval or
consent;
|
(xi)
|
there
are no disputes or outstanding claims pending or, to the Vendor's
knowledge, threatened against the Company under the Relevant Documents
and, to the Vendor's 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;
|
(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 finder’s 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
|
(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
|
(f)
|
No
indemnities given by the Company
|
(g)
|
Bank
accounts
|
5
|
Substitution
Arrangements
|
6
|
Pooling
Arrangements
|
7
|
Assets,
Liabilities and other Arrangements
|
(a)
|
No
other assets and liabilities
|
(b)
|
Business
activity
|
8
|
Properties
|
9
|
Insurance
|
10
|
Litigation
and other Disputes
|
(a)
|
No
proceedings
|
(b)
|
No
orders or judgements
|
(c)
|
No
unlawful acts
|
11
|
Compliance
with Legal Requirements
|
(a)
|
Compliance
by Company
|
(b)
|
Ultra
vires
|
(c)
|
Returns
|
(d)
|
Limited
Liability Company Agreement
|
(e)
|
Books
and records
|
(f)
|
Company’s
name
|
(g)
|
Consents
and licences
|
(h)
|
No
penalties or fines
|
12
|
Employment
|
13
|
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 Vendor's
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 Vendor's
knowledge, are there any circumstances existing that make it likely that
any such enquiry, visit, audit, investigation or discovery order will be
made in the next 12 months.
|
(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 Company’s Taxation affairs are
not dependent on or subject to any concession, agreement or other formal
or informal arrangement with any Taxation
Authority.
|
(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 have not
subsequently repaid to or settled with that Taxation Authority) any
payment to which they were not entitled or any notice in which their
liability to Taxation was
understated.
|
(d)
|
Stamp
Duty
|
(e)
|
U.S.
Tax Classification
|
14
|
Miscellaneous
|
(a)
|
No
broker’s fees
|
(b)
|
Effect
of entering into this Agreement
|
(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
Company’s 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
are 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;
|
(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 Company’s respective business to be determined or not renewed or
continued or renewed on less favourable
terms.
|
(c)
|
Accurate
information provided
|
(d)
|
Disclosure
Schedule etc accurate
|
(e)
|
All
information disclosed
|
15
|
Insolvency
|
(a)
|
No
Insolvency event
|
16
|
The
Vessel
|
(a)
|
Vessel
Commitments
|
(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 detached
by any port state authority or the flag state authority for any
deficiency;
|
(iv)
|
the
Vessel is owned free of all maritime liens, encumbrances and mortgages
except those that have been Disclosed 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 know 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.
|
Vessel
|
“GANGES
SPIRIT”
|
Built
|
2002
|
Yard
|
Ulsan,
Korea
|
Class
|
DNV
|
Flag
|
Bahamas
|
Place
of Registration
|
Nassau
|
Call
sign
|
C6WG3
|
IMO
(Registration) No.
|
9230517
|
Grt/Nrt
|
81270/52045
|
Fair
Market Value of Vessel:
|
$94,666,667
|
Plus
Fair Market Value of Charter:
|
($4,310,000)
|
Less
Company’s debt outstanding under Facility Agreement on Closing Date (April
7, 2008)
|
$36,020,590
|
Equals
Consideration:
|
$54,336,077
|
Executed
by
TEEKAY SHIPPING
CORPORATION
acting
by
|
)
)
)
|
|
Executed
by
TEEKAY TANKERS LTD.
acting
by
|
)
)
)
|
|
as
Vendor
and
TEEKAY
TANKERS LTD.
as
Purchaser
|
relating
to
the
sale and purchase of the entire ownership interests in
NARMADA
SPIRIT L.L.C.
(formerly
ADAIR SHIPPING L.L.C)
|
Clause | Name | Page |
1 | 1 | |
2 | 5 | |
3 | 6 | |
4 | 6 | |
5 | 8 | |
6 | 10 | |
7 | 12 | |
8 | 13 | |
9 | 13 | |
10 | 15 | |
11 | Governing Law and Jurisdiction | 16 |
12 | Termination | 17 |
Schedule | Name | Page |
1 | Disclosure Schedule | 18 |
2 | The Interests Transfer Documents | 26 |
3 | Warranties and Representations | 27 |
4 | The Vessel | 40 |
5 | The Consideration Formula | 41 |
Execution Page | 42 |
(1)
|
Teekay Corporation
, a
Marshall Islands company having a principal office at Bayside House,
Bayside Executive Park, West Bay Street & Blake Road, P.O. Box
AP-59212, Nassau, Bahamas (the “
Vendor
”)
|
(2)
|
Teekay Tankers Ltd.
, a
Marshall Islands limited partnership having a principal office at Bayside
House, Bayside Executive Park, West Bay Street & Blake Road, P.O. Box
AP-59212, Nassau, Bahamas (the “
Purchaser
”)
|
(A)
|
The
Vendor is the legal and beneficial owner of the
Interests.
|
(B)
|
Pursuant
to the Contribution Agreement, the Vendor is obliged to offer for sale to
the Purchaser the Vessel together with m.v. “GANGES SPIRIT”, m.v. “YAMUNA
SPIRIT” and m.v. “ASHKINI 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)
|
Pursuant
to the Memorandum, the Vendor has elected to first offer the Vessel
together with m.v. “GANGES SPIRIT” for sale to the Purchaser, which will
involve
inter
alia
the sale of the Interests by the Vendor to the
Purchaser.
|
(E)
|
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
|
(a)
|
any
violation or correction of violation of Environmental Laws by the Vendor
or the Vendor Group Companies; or
|
(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;
|
(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.
|
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.
|
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
|
3.2
|
Payment
of Consideration
|
3.3
|
Vendor’s
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
|
4.2
|
Vendor’s
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)
|
duly
executed transfers 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)
|
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) and any other agreements or obligations entered into by the
Company for the benefit of itself or any other person have been terminated
or released and, in relation to Security Interests, 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 representations and Warranties of the
Vendor contained in this Agreement.
|
4.3
|
Purchaser’s
Closing obligations
|
(a)
|
deliver
or procure that there is delivered to the Vendor a certified copy of the
minutes of a meeting of the directors of its general partner, authorising
the execution of this Agreement and any other Transaction Document that it
is to execute pursuant to this
Agreement;
|
(b)
|
pay
to the Vendor the Consideration in accordance with Clause 3.2 (
Payment of
Consideration
).
|
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
party’s rights (whether under this Agreement or the general law) as
regards the obligations with which the first party has not complied;
or
|
(c)
|
waive
all or any of the obligations in question of the first
party.
|
4.4.2
|
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.
|
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 Purchaser’s rights in respect thereof will not be
in any way impaired as a result of any other information being possessed
by or available to any Purchaser Group Companies or any officer, employee,
professional or financial adviser of, or person acting on behalf of, the
Purchaser or any Purchaser Group
Companies.
|
5.4
|
Warranties
are separate and independent
|
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,
|
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
|
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.
|
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).
|
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 party’s
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.
|
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
|
9.3.2
|
utilise
the credit (whether by set off, or by claiming a repayment in respect
thereof, or otherwise) or benefit so arising and in the event that it is
able so to do it shall repay to the party who made the payment an amount
equal to the credit or benefit so utilised, provided always that this
Clause is without prejudice to the limitations on the Vendor’s liabilities
as set out in Clause 6 (
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 Vendor’s 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 Purchaser’s auditors acting
as experts whose decision in respect thereof shall be binding on the
relevant parties except in the case of manifest
error.
|
9.4
|
Waivers,
rights and remedies
|
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.
|
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.
|
9.5
|
Variations
|
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
|
10
|
NOTICES
|
10.1
|
General
|
(a)
|
the Vendor
|
(b)
|
the Purchaser
|
11
|
GOVERNING
LAW AND JURISDICTION
|
11.1
|
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).
|
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
|
1
|
Finance
Documents
|
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
|
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
|
Nassau
Spirit Holding L.L.C.
|
10.12.2007
|
Loss
Payable Clause
|
Nassau
Spirit Holding L.L.C.
|
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
|
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
|
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
|
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
|
59.
|
Deed
of Assignment together with:
|
Mahanadi
Spirit Holding L.L.C. / Security Trustee
|
30.11.2007
|
2
|
Vessel
Documents
|
2.1
|
BP
Time3 Time Charter Party dated 30 June 2006 made between (i) Narmada
Spirit L.L.C. and (ii) BP Shipping
Ltd;
|
2.2
|
BMA Transcript of Register dated 30 November 2007; |
2.3
|
BMA Provisional Certificate of Registry dated 11 September 2007; |
2.4
|
BMA Ship Radio Communication Licence dated 11 September 2007; |
2.5
|
BMA Minimum Safe Manning Document dated 11 September 2007; |
2.6
|
COFR Certificate dated 11 September 2007; |
2.7
|
BMA Carving and Marking Note dated 11 September 2007; |
2.8
|
ABS Class Certificate dated 18 December 2003; |
2.9
|
Marshall Islands Permanent Certificate of Registration dated 8 March 2005; |
2.10
|
Marshall Islands Certificate of Ownership and Encumbrance dated 18 July 2007; and |
2.11
|
Inspection report dated 3 - 6 February 2008 in relation to m.v. “NARMADA SPIRIT”. |
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;
|
(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;
|
(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 Vendor's knowledge, the other parties to such
agreement in accordance with its
terms;
|
(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 Vendor's knowledge, there is no and has not been, at any time, any
breach of, or any default in the performance of, the terms of any such
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 Vendor's
knowledge, no circumstances have arisen that may lead to withdrawal or
failure to renew, if applicable, of any such licence, approval or
consent;
|
(xi)
|
there
are no disputes or outstanding claims pending or, to the Vendor's
knowledge, threatened against the Company under the Relevant Documents
and, to the Vendor's 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;
|
(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 finder’s 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
|
(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
|
(f)
|
No
indemnities given by the Company
|
(g)
|
Bank
accounts
|
5
|
Assets,
Liabilities and other Arrangements
|
(a)
|
No
other assets and liabilities
|
(b)
|
Business
activity
|
6
|
Properties
|
7
|
Insurance
|
8
|
Litigation
and other Disputes
|
(a)
|
No
proceedings
|
(b)
|
No
orders or judgements
|
(c)
|
No
unlawful acts
|
9
|
Compliance
with Legal Requirements
|
(a)
|
Compliance
by Company
|
(b)
|
Ultra
vires
|
(c)
|
Returns
|
(d)
|
Limited
Liability Company Agreement
|
(e)
|
Books
and records
|
(f)
|
Company’s
name
|
(g)
|
Consents
and licences
|
(h)
|
No
penalties or fines
|
10
|
Employment
|
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 Vendor's
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 Vendor's
knowledge, are there any circumstances existing that make it likely that
any such enquiry, visit, audit, investigation or discovery order will be
made in the next 12 months.
|
(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 Company’s Taxation affairs are
not dependent on or subject to any concession, agreement or other formal
or informal arrangement with any Taxation
Authority.
|
(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 have not
subsequently repaid to or settled with that Taxation Authority) any
payment to which they were not entitled or any notice in which their
liability to Taxation was
understated.
|
(d)
|
Stamp
Duty
|
(e)
|
U.S.
Tax Classification
|
12
|
Miscellaneous
|
(a)
|
No
broker’s fees
|
(b)
|
Effect
of entering into this Agreement
|
(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
Company’s 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
are 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;
|
(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 Company’s respective business to be determined or not renewed or
continued or renewed on less favourable
terms.
|
(c)
|
Accurate
information provided
|
(d)
|
Disclosure
Schedule etc accurate
|
(e)
|
All
information disclosed
|
13
|
Insolvency
|
(a)
|
No
Insolvency event
|
14
|
The
Vessel
|
(a)
|
Vessel
Commitments
|
(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 detached
by any port state authority or the flag state authority for any
deficiency;
|
(iv)
|
the
Vessel is owned free of all maritime liens, encumbrances and mortgages
except those that have been Disclosed 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 know 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.
|
Vessel
|
“NARMADA
SPIRIT”
|
Built
|
2003
|
Yard
|
Ulsan,
Korea
|
Class
|
DNV
|
Flag
|
Bahamas
|
Place
of Registration
|
Nassau
|
Call
sign
|
C6WG5
|
IMO
(Registration) No.
|
9269075
|
Grt/Nrt
|
81074/52045
|
Fair
Market Value of Vessel:
|
$96,500,000
|
Plus
Fair Market Value of Charter:
|
Nil
|
Less
Company’s debt outstanding under Facility Agreement on Closing Date (April
7, 2008)
|
$37,307,018
|
Equals
Consideration:
|
$59,192,982
|
Executed
by
TEEKAY SHIPPING
CORPORATION
acting
by
|
)
)
)
|
|
Executed
by
TEEKAY TANKERS LTD.
acting
by
|
)
)
)
|
|