EXHIBIT 10.3
AMENDED AND RESTATED
OMNIBUS AGREEMENT
AMONG
TEEKAY SHIPPING CORPORATION,
AND
TEEKAY GP L.L.C.,
TEEKAY LNG PARTNERS L.P. AND
TEEKAY LNG OPERATING L.L.C.
AND
TEEKAY OFFSHORE GP L.L.C.,
TEEKAY OFFSHORE PARTNERS L.P.,
TEEKAY OFFSHORE OPERATING GP L.L.C. AND
TEEKAY OFFSHORE OPERATING L.P.
AMENDED AND RESTATED OMNIBUS AGREEMENT
THIS AMENDED AND RESTATED OMNIBUS AGREEMENT is entered into on, and
effective as of, the Offshore Closing Date (as defined herein), among Teekay
Shipping Corporation, a ▇▇▇▇▇▇▇▇ Islands corporation ("Teekay"), Teekay GP
L.L.C., a ▇▇▇▇▇▇▇▇ Islands limited liability company (including any permitted
successors and assigns under the Teekay LNG MLP Agreement (as defined herein),
"Teekay LNG General Partner"), for itself and on behalf of Teekay LNG MLP in its
capacity as general partner, Teekay LNG Operating L.L.C., a ▇▇▇▇▇▇▇▇ Islands
limited liability company ("Teekay LNG OLLC"), Teekay LNG Partners L.P., a
▇▇▇▇▇▇▇▇ Islands limited partnership ("Teekay LNG MLP"), Teekay Offshore GP
L.L.C., a ▇▇▇▇▇▇▇▇ Islands limited liability company (including any permitted
successors and assigns under the Teekay Offshore MLP Agreement (as defined
herein), "Teekay Offshore General Partner"), for itself and on behalf of the
Teekay Offshore MLP in its capacity as general partner, Teekay Offshore Partners
L.P., a ▇▇▇▇▇▇▇▇ Islands limited partnership ("Teekay Offshore MLP"), Teekay
Offshore Operating GP L.L.C., a ▇▇▇▇▇▇▇▇ Islands limited liability company
("Teekay Offshore Operating General Partner"), for itself and on behalf of
Teekay Offshore OLP in its capacity as general partner, and Teekay Offshore
Operating L.P., a ▇▇▇▇▇▇▇▇ Islands limited partnership ("Teekay Offshore OLP").
R E C I T A L S:
1. Teekay, Teekay LNG General Partner, Teekay LNG OLLC and Teekay LNG
MLP are parties to the Omnibus Agreement dated as of May 10, 2005 (the "Original
Agreement") entered into in connection with the initial public offering of
common units by Teekay LNG MLP and pursuant to which such parties evidenced
their understandings with respect to various matters set forth therein.
2. Teekay Offshore MLP proposes to undertake an initial public offering
of its common units and the Parties desire to enter into this Agreement to
evidence their understanding with respect to the various matters set forth
herein.
3. The Conflicts Committee (as defined herein) of the board of
directors of Teekay LNG General Partner and the boards of directors of Teekay,
Teekay LNG General Partner and Teekay Offshore General Partner have approved the
amendment and restatement of the Original Agreement as set forth in this
Agreement.
4. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Articles II, III and V, with
respect to (a) those business opportunities that the Teekay Entities (as defined
herein) will not pursue during the term of this Agreement and (b) the procedures
whereby such business opportunities are to be offered to the LNG Partnership
Group (as defined herein) or the Offshore Partnership Group (as defined herein),
as applicable, and accepted or declined.
AMENDED AND RESTATED OMNIBUS AGREEMENT
5. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Articles II, IV and V, with
respect to (a) those business opportunities that the Offshore Partnership Group
will not pursue during the term of this Agreement and (b) the procedures whereby
such business opportunities are to be offered to Teekay or the LNG Partnership
Group, as applicable, and accepted or declined.
6. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Articles III, IV and V, with
respect to (a) those business opportunities that the LNG Partnership Group will
not pursue during the term of this Agreement and (b) the procedures whereby such
business opportunities are to be offered to Teekay or the Offshore Partnership
Group, as applicable, and accepted or declined.
7. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article VI, with respect to (a)
Teekay's right of first offer relating to certain Crude Oil Assets (as defined
herein), (b) Teekay LNG MLP's right of first offer relating to certain LNG
Assets (as defined herein) and (c) Teekay Offshore MLP's right of first offer
relating to certain Offshore Assets (as defined herein).
8. The Parties desire by their execution of this Agreement to evidence
their understanding, as more fully set forth in Article VII, with respect to
certain indemnification obligations of Teekay.
In consideration of the premises and the covenants, conditions, and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS.
As used in this Agreement, the following terms shall have the
respective meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by or is under common control with, the Person in question. As used
herein, the term "control" means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by contract or
otherwise.
"Aframax Assets" means the Aframax tankers included in Teekay Offshore
OLP as of the Offshore Closing Date and any Replacement Aframax Assets relating
to such original Aframax tankers.
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"Agreement" means this Amended and Restated Omnibus Agreement, as it
may be amended, modified, or supplemented from time to time in accordance with
Section 8.6 hereof.
"Acquiring Party" has the meaning given such term in Section 5.1(a).
"Bid LNG Assets" has the meaning given such term in Section 2.2(b).
"Bid Offshore Assets" has the meaning given such term in Section
3.2(c).
"Break-up Costs" means the aggregate amount of any and all additional
taxes and other similar costs to (a) the Teekay Entities or the Offshore
Partnership Group, as applicable, that would be required to transfer LNG Assets
acquired by the Teekay Entities or the Offshore Partnership Group as part of a
larger transaction to an LNG Partnership Group Member pursuant to Section
2.2(a), (b) the LNG Partnership Group or the Offshore Partnership Group, as
applicable, that would be required to transfer Crude Oil Assets acquired by the
LNG Partnership Group or the Offshore Partnership Group as part of a larger
transaction to a Teekay Entity pursuant to Section 4.2(c) or (c) the Teekay
Entities or the LNG Partnership Group, as applicable, that would be required to
transfer Offshore Assets acquired by the Teekay Entities or the LNG Partnership
Group as part of a larger transaction to an Offshore Partnership Group Member
pursuant to Section 3.2(b).
"Change of Control" means, with respect to any Person (the "Applicable
Person"), any of the following events: (a) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all or
substantially all of the Applicable Person's assets to any other Person, unless
immediately following such sale, lease, exchange or other transfer such assets
are owned, directly or indirectly, by the Applicable Person; (b) the
consolidation or merger of the Applicable Person with or into another Person
pursuant to a transaction in which the outstanding Voting Securities of the
Applicable Person are changed into or exchanged for cash, securities or other
property, other than any such transaction where (i) the outstanding Voting
Securities of the Applicable Person are changed into or exchanged for Voting
Securities of the surviving Person or its parent and (ii) the holders of the
Voting Securities of the Applicable Person immediately prior to such transaction
own, directly or indirectly, not less than a majority of the outstanding Voting
Securities of the surviving Person or its parent immediately after such
transaction; and (c) a "person" or "group" (within the meaning of Sections 13(d)
or 14(d)(2) of the Exchange Act) (other than Teekay or its Affiliates, with
respect to Teekay LNG General Partner, Teekay Offshore General Partner or Teekay
Offshore OLP), being or becoming the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act) of more than 50% of all of the then
outstanding Voting Securities of the Applicable Person, except in a merger or
consolidation which would not constitute a Change of Control under clause (b)
above.
"Conflicts Committee" means the Conflicts Committee of the board of
directors of Teekay LNG General Partner or Teekay Offshore General Partner, as
applicable.
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"Contribution Assets" means the LNG Contribution Assets or the Offshore
Contribution Assets, as applicable.
"control" means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.
"Covered Environmental Losses" means all environmental and toxic tort
Losses suffered or incurred by the LNG Partnership Group or the Offshore
Partnership Group, as applicable, by reason of or arising out of:
(i) any violation or correction of violation of Environmental Laws; or
(ii) any event or condition associated with ownership or operation by
the Teekay Entities of the LNG Contribution Assets, with respect to the LNG
Partnership Group, or the Offshore Contribution Assets, with respect to the
Offshore Partnership Group (including, without limitation, the presence of
Hazardous Substances on, under, about or migrating to or from the LNG
Contribution Assets or the Offshore Contribution Assets or the disposal or
release of Hazardous Substances generated by operation of the LNG Contribution
Assets or the Offshore Contribution Assets, as applicable), including, without
limitation, (A) 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, (B)
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 (C) the cost and expense for any environmental or toxic
tort pre-trial, trial or appellate legal or litigation support work;
but only to the extent that such violation complained of under clause (i), or
such events or conditions included in clause (ii), occurred before the LNG
Closing Date, with respect to the LNG Contribution Assets, or the Offshore
Closing Date, with respect to the Offshore Contribution Assets; and provided
that in no event shall Losses to the extent arising from a change in any
Environmental Law after the LNG Closing Date or the Offshore Closing Date, as
applicable, be deemed "Covered Environmental Losses."
"Crude Oil Assets" means crude oil tankers and related charters,
excluding any crude oil tankers and related charters that constitute Offshore
Assets.
"Crude Oil Restricted Business" has the meaning given such term in
Section 4.1.
"Environmental Laws" means all U.S. federal, state and local and all
foreign laws, statutes, rules, regulations, orders, judgments and ordinances
relating to protection of health and safety and the environment, including,
without limitation, the United States federal Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and Recovery
Act, the Clean Air Act, the Clean Water Act, the Safe Drinking Water Act, the
Toxic Substances Control Act, the Oil Pollution Act of 1990, the Hazardous
AMENDED AND RESTATED OMNIBUS AGREEMENT
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Materials Transportation Act, the Marine Mammal Protection Act, the Endangered
Species Act, the National Environmental Policy Act, and other environmental
conservation and protection laws, each as amended through the LNG Closing Date
or the Offshore Closing Date, as applicable.
"Event of Loss" means any of the following events: (a) the actual or
constructive total loss of a Suezmax Asset or an Aframax Asset or the agreed or
compromised total loss of a Suezmax Asset or an Aframax Asset; (b) the
destruction of a Suezmax Asset or an Aframax Asset; (c) the damage to a Suezmax
Asset or an Aframax Asset to an extent, determined in good faith by Teekay LNG
General Partner's Conflicts Committee, with respect to a Suezmax Asset, or
Teekay Offshore General Partner's Conflicts Committee, with respect to an
Aframax Asset, within 90 days after the occurrence of such damage, as shall make
repair thereof uneconomical or shall render such Suezmax Asset or Aframax Asset
permanently unfit for normal use (other than obsolescence); or (d) the
condemnation, confiscation, requisition, seizure, forfeiture or other taking of
title to or use of a Suezmax Asset or an Aframax Asset that shall not be revoked
within six months. An Event of Loss shall be deemed to have occurred: (i) in the
event of the destruction or other actual total loss of a Suezmax Asset or an
Aframax Asset, on the date of such loss; (ii) in the event of a constructive,
agreed or compromised total loss of a Suezmax Asset or an Aframax Asset, on the
date of determination of such total loss pursuant to the relevant insurance
policy; (iii) in the case of any event referred to in clause (c) above, upon
such determination by the applicable Conflicts Committee; or (iv) in the case of
any event referred in clause (d) above, on the date six months after the
occurrence of such event.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Offshore Project Assets" means the following Offshore Assets:
two conventional crude oil tankers (the Navion Bergen and the Navion Gothenburg)
that Teekay currently is converting to shuttle tankers and one floating storage
and offtake unit (the Dampier Spirit) currently being upgraded.
"First Offer Negotiation Period" has the meaning given such term in
Section 6.2.
"Fully-Built-Up Cost"" means, with respect to an LNG Asset or an
Offshore Asset to be acquired or leased (pursuant to a capitalized lease
obligation) by an LNG Partnership Group Member or an Offshore Partnership Group
Member, respectively, the aggregate amount of all expenditures incurred (or to
be incurred prior to delivery to the LNG Partnership Group Member or the
Offshore Partnership Group Member) to acquire, construct and/or convert and
bring such LNG Asset or Offshore Asset to the condition and location necessary
for its intended use by the LNG Partnership Group Member or the Offshore
Partnership Group Member, as applicable, plus a reasonable allocation of
overhead costs related to the development of such project and other projects
that would have been subject to the offer rights set forth in this Agreement but
were not completed; provided, however, that in determining the Fully-Built-Up
Cost of an Offshore Asset that is constructed or converted using a hull from
Teekay's fleet (including the Existing Offshore Project Assets), such hull shall
be valued at its fair market value at the time of the vessel's
AMENDED AND RESTATED OMNIBUS AGREEMENT
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transfer by Teekay and the Fully-Built-Up Cost of such Offshore Asset (other
than the hull) shall be determined as otherwise set forth in this definition.
"Hazardous Substances" means (a) substances which contain substances
defined in or regulated under applicable Environmental Laws; (b) petroleum and
petroleum products, including crude oil and any fractions thereof; (c) natural
gas, synthetic gas and any mixtures thereof; (d) any substances with respect to
which a federal, state, foreign or local agency requires environmental
investigation, monitoring, reporting or remediation; (e) any hazardous waste or
solid waste, within the meaning of any Environmental Law; (f) any solid,
hazardous, dangerous or toxic chemical, material, waste or substance, within the
meaning of and regulated by any Environmental Law; (g) any radioactive material;
and (h) any asbestos-containing materials that represent a health hazard.
"LNG" means liquefied natural gas.
"LNG Assets" means LNG carriers and related time charters.
"LNG Closing Date" means May 10, 2005, the date of the closing of the
initial public offering of common units representing limited partner interests
in Teekay LNG MLP.
"LNG Contribution Agreement" means that certain Contribution,
Conveyance and Assumption Agreement, dated as of May 10, 2005, among Teekay,
Teekay LNG General Partner, Teekay LNG MLP, Teekay LNG OLLC and Teekay Shipping
Spain, S.L., together with the additional conveyance documents and instruments
contemplated or referenced thereunder.
"LNG Contribution Assets" means the assets of the Teekay LNG
Partnership Group as of the LNG Closing Date.
"LNG Partnership Entities" means Teekay LNG General Partner, Teekay LNG
MLP, Teekay LNG OLLC and any Person controlled by any such entity.
"LNG Partnership Group" means Teekay LNG MLP, Teekay LNG OLLC and any
Person controlled by any such entity.
"LNG Partnership Group Member" means any Person in the LNG Partnership
Group.
"LNG Restricted Business" has the meaning given such term in Section
2.1.
"Losses" means losses, damages, liabilities, claims, demands, causes of
action, judgments, settlements, fines, penalties, costs and expenses (including,
without limitation, court costs and reasonable attorneys' and experts' fees) of
any and every kind or character; provided, however, that such term shall not
include any special, indirect, incidental or consequential damages.
AMENDED AND RESTATED OMNIBUS AGREEMENT
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"Offer" has the meaning given such term in Section 5.1(b).
"Offered Assets" has the meaning given such term in Section 5.1(a).
"Offeree" has the meaning given such term in Section 5.1(a).
"Offer Period" has the meaning given such term in Section 5.1(e).
"Offshore Assets" means (a) dynamically-positioned shuttle tankers
(excluding dynamically-positioned shuttle tankers that operate in conventional
crude oil tanker trades under Qualifying Contracts), (b) floating storage and
offtake units, (c) floating production, storage and offloading units and (d)
related time charters or contracts of affreightment.
"Offshore Closing Date" means the date of the closing of the initial
public offering of common units representing limited partner interests in Teekay
Offshore MLP.
"Offshore Contribution Agreement" means that certain Contribution,
Conveyance and Assumption Agreement, dated as of the Offshore Closing Date,
among Teekay, Teekay Offshore General Partner, Teekay Offshore MLP, Teekay
Offshore OLP and Teekay Offshore Operating General Partner, together with the
additional conveyance documents and instruments contemplated or referenced
thereunder.
"Offshore Contribution Assets" means the assets of Teekay Offshore OLP
as of the Offshore Closing Date.
"Offshore Partnership Entities" means Teekay Offshore General Partner,
Teekay Offshore MLP, Teekay Offshore Operating General Partner, Teekay Offshore
OLP and any Person controlled by any such entity.
"Offshore Partnership Group" means Teekay Offshore MLP, Teekay Offshore
Operating General Partner, Teekay Offshore OLP and any Person controlled by any
such Person.
"Offshore Partnership Group Member" means any Person in the Offshore
Partnership Group.
"offshore project" means any project involving the marine
transportation, production, processing or storage of crude oil using Offshore
Assets.
"Offshore Restricted Business" has the meaning given such term in
Section 3.1.
"Original Agreement" is defined in the recitals to this Agreement.
"Parties" means the parties to this Agreement and their successors and
permitted assigns.
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"Petrojarl" means Petrojarl ASA, a Norwegian company of which Teekay
owns a majority of its outstanding capital stock as of the date of this
Agreement.
"Petrojarl Excluded Assets" has the meaning given such term in Section
3.2(h).
"Petrojarl Joint Venture Agreement" means the Joint Venture Partners'
Agreement dated June 14, 2006 among Petrojarl JV AS, Teekay Petrojarl Offshore
Holdings L.L.C. and Teekay Petrojarl GP L.L.C., as it may be amended, modified,
or supplemented from time to time.
"Person" means an individual, corporation, partnership, joint venture,
trust, limited liability company, unincorporated organization or any other
entity.
"Potential Transferee" has the meaning given such term in Section 6.2.
"Qualifying Contract" means a time charter or contract of affreightment
with a remaining duration, excluding any extension options, of at least three
years. For purposes of this definition, the duration of any life-of-field
contract of affreightment shall be deemed to equal the expected remaining life
of the relevant oil field as determined by Wood Mackenzie Ltd., or, if Wood
Mackenzie is not available, another reasonably suitable independent entity
qualified to estimate the remaining life of the relevant oil field.
"Qualifying Petrojarl Joint Venture Offshore Projects" means projects
subject to the Petrojarl Joint Venture Agreement that involve Offshore Assets
that are subject to a Qualifying Contract.
"Re-Charter" means the chartering-out of an LNG Asset, an Offshore
Asset or a Crude Oil Asset pursuant to a Qualifying Contract in the event that
its existing charter or contract of affreightment expires or is terminated early
(including, without limitation, the chartering of any Replacement Suezmax Asset
or Replacement Aframax Asset but only if the charter party for the Replacement
Suezmax Asset or Replacement Aframax Asset, as applicable, is not the same
charter party (or an Affiliate of such charter party) as for the replaced
Suezmax Asset or Aframax Asset).
"Replacement Aframax Assets" means any Aframax tankers that replace any
Afraxmax Assets upon (a) an Event of Loss or (b) the replacement of a
time-charter arrangement existing as of the Offshore Closing Date where the
original Aframax Asset which was subject to such time charter has been sold or
transferred due to the exercise by the charter party of its right under the time
charter to cause such sale or transfer.
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"Replacement Suezmax Assets" means any Suezmax tankers that replace any
Suezmax Assets upon (a) an Event of Loss or (b) the replacement of a
time-charter arrangement existing as of the LNG Closing Date where the original
Suezmax Asset which was subject to such time charter has been sold or
transferred due to the exercise by the charter party of its right under the time
charter to cause such sale or transfer.
"Restricted Business" means, as applicable, the LNG Restricted
Business, the Offshore Restricted Business or the Crude Oil Restricted Business.
"Retained Assets" means all right, title and interest in and to assets
other than (a) the LNG Contribution Assets or (b) the Offshore Contribution
Assets, as applicable.
"Retained Liabilities" means any and all liabilities and obligations of
any and every kind or character not assumed by (a) the LNG Partnership Group
pursuant to the LNG Contribution Agreement or (b) the Offshore Partnership Group
pursuant to the Offshore Contribution Agreement, as applicable.
"Sale Assets" has the meaning given such term in Section 6.2.
"Suezmax Assets" means the Suezmax tankers included in the LNG
Contribution Assets and any Replacement Suezmax Assets relating to such original
Suezmax tankers.
"Teekay" is defined in the introduction to this Agreement.
"Teekay Entities" means Teekay and any Person controlled, directly or
indirectly, by Teekay other than the LNG Partnership Entities and the Offshore
Partnership Entities.
"Teekay LNG General Partner" is defined in the introduction to this
Agreement.
"Teekay LNG MLP" is defined in the introduction to this Agreement.
"Teekay LNG MLP Agreement" means the First Amended and Restated
Agreement of Limited Partnership of the Teekay LNG MLP, dated as of May 10,
2005, as amended by Amendment No. 1 dated as of May 31, 2006, as such agreement
is in effect on the Offshore Closing Date, to which reference is hereby made for
all purposes of this Agreement. No amendment or modification to the Teekay LNG
MLP Agreement subsequent to the Offshore Closing Date shall be given effect for
purposes of this Agreement unless consented to by each of the Parties to this
Agreement.
"Teekay LNG OLLC" is defined in the introduction to this Agreement.
"Teekay Offshore General Partner" is defined in the introduction to
this Agreement.
"Teekay Offshore MLP" is defined in the introduction to this Agreement.
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"Teekay Offshore MLP Agreement" means the First Amended and Restated
Agreement of Limited Partnership of the Teekay Offshore MLP, dated as of the
Offshore Closing Date, as such agreement is in effect on the Offshore Closing
Date, to which reference is hereby made for all purposes of this Agreement. No
amendment or modification to the Teekay Offshore MLP Agreement subsequent to the
Offshore Closing Date shall be given effect for purposes of this Agreement
unless consented to by each of the Parties to this Agreement.
"Teekay Offshore OLP" is defined in the introduction to this Agreement.
"Teekay Offshore Operating General Partner" is defined in the
introduction to this Agreement.
"Transfer" means any transfer, assignment, sale or other disposition of
(a) any LNG Assets by a Teekay Entity or an Offshore Partnership Group Member,
(b) any Offshore Assets by a Teekay Entity or an LNG Partnership Group Member,
or (c) any Crude Oil Assets by an LNG Partnership Group Member or an Offshore
Partnership Group Member; provided, however, that such term shall not include:
(i) transfers, assignments, sales or other dispositions from a Teekay Entity to
another Teekay Entity, from an LNG Partnership Group Member to another LNG
Partnership Group Member or from an Offshore Partnership Group Member to another
Offshore Partnership Group Member; (ii) transfers, assignments, sales or other
dispositions pursuant to the terms of any related charter, contract of
affreightment or other agreement with a charter party or the party to the
contract of affreightment, as applicable; (iii) transfers, assignments, sales or
other dispositions pursuant to Article II, III or IV of this Agreement; (iv)
grants of security interests in or mortgages or liens on such LNG Assets,
Offshore Assets or Crude Oil Assets in favor of a bona fide third-party lender
(but not the foreclosing of any such security interest, mortgage or lien); or
(v) transfers, assignments, sales or other dispositions by a Teekay Entity
(other than Petrojarl or any Person controlled thereby) of any Offshore Assets
it owns as of the date of this agreement if, at the time of the proposed
transfer, assignment, sale or other disposition, the applicable Offshore Asset
is not subject to a Qualifying Contract.
"Transfer Notice" has the meaning given such term in Section 6.2.
"Transferring Party" has the meaning given such term in Section 6.2.
"Voting Securities" means securities of any class of Person entitling
the holders thereof to vote in the election of members of the board of directors
or other similar governing body of the Person.
ARTICLE II
LNG RESTRICTED BUSINESS OPPORTUNITIES
2.1 LNG RESTRICTED BUSINESSES. Subject to Section 8.4 and except as
permitted by Section 2.2, each of the Teekay Entities and the Offshore
Partnership Group Members shall
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be prohibited from engaging in or acquiring or investing in any business that
owns, operates or charters LNG Assets (each an "LNG Restricted Business").
2.2 PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 2.1
to the contrary, the Teekay Entities and the Offshore Partnership Group Members
may engage in the following activities under any of the following circumstances:
(a) the ownership, operation and/or chartering of any LNG
Assets that they acquire after the date of this Agreement if:
(i) such LNG Assets are acquired as part of a
business or package of assets in a transaction in which the fair market
value of such LNG Assets represents less than a majority of the fair
market value of the total assets or business acquired (fair market
value as determined in good faith by the board of directors of Teekay
or Teekay Offshore General Partner's Conflicts Committee, as
applicable); and
(ii) the Teekay Entity or the Offshore Partnership
Group Member has offered Teekay LNG General Partner the opportunity for
any of the Teekay LNG Partnership Group Members to purchase such LNG
Assets in accordance with the procedures set forth in Section 5.1 and
Teekay LNG General Partner, with the approval of Teekay LNG General
Partner's Conflicts Committee, has elected not to cause any Teekay LNG
Partnership Group Member to purchase such LNG Assets;
(b) the ownership, operation and/or chartering of LNG Assets
that (i) are subject to an offer to purchase by a Teekay Entity or an Offshore
Partnership Group Member as described in Section 2.2(a)(ii) or (ii) subject to
Section 5.1, relate to a tender, bid or award for a proposed LNG project that a
Teekay Entity has submitted or received (or hereafter submits or receives) (such
LNG Assets in clause (ii) being referred to herein as "Bid LNG Assets"), in each
case pending the applicable offer of such LNG Assets to Teekay LNG General
Partner and Teekay LNG General Partner's determination pursuant to Section 5.1
whether to purchase the LNG Assets and, if Teekay LNG General Partner's
Conflicts Committee determines to cause a Teekay LNG Partnership Group Member to
purchase such LNG Assets, pending the closing of such purchase;
(c) the provision by Teekay Entities of ship management
services relating to an LNG Restricted Business;
(d) the acquisition of up to a 9.9% equity ownership, voting
or profit participation interest in any publicly traded Person (other than
Teekay LNG MLP) that engages in an LNG Restricted Business;
(e) the ownership, operation and/or chartering of any LNG
Assets with respect to which Teekay LNG General Partner has advised Teekay or
Teekay Offshore General Partner, as applicable, that Teekay LNG General Partner
has elected, with the approval of Teekay LNG
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General Partner's Conflicts Committee, not to cause a Teekay LNG Partnership
Group Member to acquire (or seek to acquire); or
(f) the ownership, operation and/or chartering by Teekay
Entities of the LNG Assets subject to the Nakilat Share Purchase Agreement dated
as of May 10, 2005, between Teekay and Teekay LNG MLP if the Teekay LNG MLP
fails to perform its obligations to purchase (or to cause other Teekay LNG
Partnership Group Members to purchase) such LNG Assets under such agreement.
ARTICLE III
OFFSHORE RESTRICTED BUSINESS OPPORTUNITIES
3.1 OFFSHORE RESTRICTED BUSINESSES. Subject to Section 8.4 and except
as permitted by Section 3.2, each of the Teekay Entities and the LNG Partnership
Group Members shall be prohibited from engaging in or acquiring or investing in
any business that owns, operates or charters Offshore Assets (each an "Offshore
Restricted Business"); provided, however, that, subject to Section 6.1, nothing
in this Agreement shall prohibit the LNG Partnership Group Members from owning,
operating or chartering any Suezmax Assets that are hereafter converted into
Offshore Assets.
3.2 PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 3.1
to the contrary, the Teekay Entities and the LNG Partnership Group Members may
engage in the following activities under any of the following circumstances:
(a) the ownership, operation and/or chartering of Offshore
Assets that are not subject to a Qualifying Contract;
(b) the ownership, operation and/or chartering of any Offshore
Assets that they acquire after the date of this Agreement if:
(i) such Offshore Assets are acquired as part of a
business or package of assets in a transaction in which the fair market
value of such Offshore Assets represents less than a majority of the
fair market value of the total assets or business acquired (fair market
value as determined in good faith by the board of directors of Teekay
or Teekay LNG General Partner's Conflicts Committee, as applicable);
and
(ii) the Teekay Entity or the LNG Partnership Group
Member has offered Teekay Offshore General Partner the opportunity for
any of the Teekay Offshore Partnership Group Members to purchase such
Offshore Assets in accordance with the procedures set forth in Section
5.1 and Teekay Offshore General Partner, with the approval of Teekay
Offshore General Partner's Conflicts Committee, has elected not to
cause any Teekay Offshore Partnership Group Member to purchase such
Offshore Assets;
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(c) the ownership, operation and/or chartering of Offshore
Assets that (i) are subject to an offer to purchase by a Teekay Entity or an LNG
Partnership Group Member as described in Section 3.2(b)(ii), or (ii) subject to
Section 5.1, relate to a tender, bid or award for a proposed offshore project
that a Teekay Entity has submitted or received (or hereafter submits or
receives), including Qualifying Petrojarl Joint Venture Offshore Projects and
the Existing Offshore Project Assets (such Offshore Assets in clause (ii) being
referred to herein as "Bid Offshore Assets"), in each case pending the
applicable offer of such Offshore Assets to Teekay Offshore General Partner and
Teekay Offshore General Partner's determination pursuant to Section 5.1 whether
to purchase the Offshore Assets and, if Teekay Offshore General Partner's
Conflicts Committee determines to cause a Teekay Offshore Partnership Group
Member to purchase such Offshore Assets, pending the closing of such purchase;
(d) the provision by Teekay Entities of ship management
services relating to an Offshore Restricted Business;
(e) the acquisition of up to a 9.9% equity ownership, voting
or profit participation interest in any publicly traded Person that engages in
an Offshore Restricted Business;
(f) the ownership, operation and/or chartering of any Offshore
Assets with respect to which Teekay Offshore General Partner has advised Teekay
or Teekay LNG General Partner, as applicable, that Teekay Offshore General
Partner has elected, with the approval of Teekay Offshore General Partner's
Conflicts Committee, not to cause a Teekay Offshore Partnership Group Member to
acquire (or seek to acquire);
(g) the ownership by Teekay Entities of (i) a limited
partnership interest in Teekay Offshore OLP, (ii) interests in Teekay Offshore
MLP and (iii), subject to Section 3.2(h), interests in Petrojarl;
(h) (i) prior to Teekay Entities owning 100% of Petrojarl, the
ownership, operation and/or chartering by Petrojarl or its controlled affiliates
of (A) the Offshore Assets owned, operated and/or chartered by Petrojarl or its
controlled affiliates as of the Offshore Closing Date ("Petrojarl Excluded
Assets") or (B) interests in Qualifying Petrojarl Joint Venture Offshore
Projects and (ii) subject to Section 5.1, following the acquisition by the
Teekay Entities of 100% of Petrojarl, the ownership, operation and/or chartering
by Petrojarl or its controlled affiliates of Offshore Assets then subject to
Qualifying Contracts (including interests in Qualifying Petrojarl Joint Venture
Offshore Projects) pending the applicable offer of such Offshore Assets to
Teekay Offshore General Partner and Teekay Offshore General Partner's
determination pursuant to Section 5.1 whether to purchase such Offshore Assets
and, if Teekay Offshore General Partner's Conflicts Committee determines to
cause an Offshore Partnership Group Member to purchase such Offshore Assets,
pending the closing of such purchase.
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ARTICLE IV
CRUDE OIL RESTRICTED BUSINESS OPPORTUNITIES
4.1 CRUDE OIL RESTRICTED BUSINESSES. Subject to Section 8.4 and except
as permitted by Section 4.2, each LNG Partnership Group Member and each Offshore
Partnership Group Member shall be prohibited from engaging in or acquiring or
investing in any business that owns, operates or charters Crude Oil Assets (each
a "Crude Oil Restricted Business").
4.2 PERMITTED EXCEPTIONS. Notwithstanding any provision of Section 4.1
to the contrary, the LNG Partnership Group Members and the Offshore Partnership
Group Members may engage in the following activities under any of the following
circumstances:
(a) the LNG Partnership Group Members may engage in the
ownership, operation and/or chartering of any of the Suezmax Assets, including
any Replacement Suezmax Assets;
(b) the Offshore Partnership Group Members may engage in the
ownership, operation and/or chartering of any of the Aframax Assets, including
any Replacement Aframax Assets;
(c) the ownership, operation and/or chartering of any Crude
Oil Assets that it acquires after the date of this Agreement if:
(i) such Crude Oil Assets are acquired as part of a
business or package of assets in a transaction in which the fair market
value of such Crude Oil Assets represents less than a majority of the
fair market value of the total assets or business acquired (fair market
value as determined in good faith by the Conflicts Committee of the
board of directors of Teekay LNG General Partner or Teekay Offshore
General Partner, as applicable); and
(ii) the LNG Partnership Group Member or Offshore
Partnership Group Member, as applicable, has offered Teekay the
opportunity for Teekay or any other Teekay Entity to purchase such
Crude Oil Assets in accordance with the procedures set forth in Section
5.1 and Teekay has elected not to purchase and not to cause another
Teekay Entity to purchase such Crude Oil Assets;
(d) the ownership, operation and/or chartering of Crude Oil
Assets that are subject to an offer by an LNG Partnership Group Member or an
Offshore Partnership Group Member as described in Section 4.2(c) pending
Teekay's determination whether to purchase the Crude Oil Assets and, if Teekay
determines to cause a Teekay Entity to purchase such Crude Oil Assets, pending
the closing of such purchase;
(e) the acquisition of up to a 9.9% equity ownership, voting
or profit participation interest in any publicly traded Person that engages in a
Crude Oil Restricted Business; or
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(f) the ownership, operation and/or chartering by an LNG
Partnership Group Member or an Offshore Partnership Group Member of any Crude
Oil Assets with respect to which Teekay has previously advised Teekay LNG
General Partner or Teekay Offshore General Partner, as applicable, that Teekay
has elected not to cause a Teekay Entity to acquire (or seek to acquire).
ARTICLE V
BUSINESS OPPORTUNITIES PROCEDURES
5.1 PROCEDURES. (a) In the event that (i) an LNG Partnership Group
Member or an Offshore Partnership Group Member acquires Crude Oil Assets as part
of a larger transaction in accordance with Section 4.2(c), (ii) a Teekay Entity
or an Offshore Partnership Group Member acquires LNG Assets as part of a larger
transaction in accordance with Section 2.2(a), (iii) a Teekay Entity or an LNG
Partnership Group Member acquires Offshore Assets as part of a larger
transaction in accordance with Section 3.2(b), (iv) a Teekay Entity is awarded a
contract for the transportation requirements for all or any portion of any
proposed LNG project or offshore project for which a Teekay Entity has tendered
or submitted a bid (and, with respect to Offshore Assets, the contract is a
Qualifying Contract), including, without limitation, the projects to be served
by the Existing Offshore Project Assets, (v) the Teekay Entities acquire 100%
ownership of Petrojarl or (vi) a Teekay Entity proposes to Re-Charters any LNG
Assets or Offshore Assets (including any Petrojarl Excluded Assets once the
Teekay entities acquire 100% ownership of Petrojarl), then:
(x) in the case of clause (i), (ii), (iii), (v) or (vi) above,
not later than 30 days after the consummation of the acquisition or the
proposed Re-Chartering of any Offshore Assets; provided, however, that
such period shall be 365 days for acquisitions of Offshore Assets by
any Teekay Entities or any LNG Partnership Group Members or the
acquisition of 100% ownership of Petrojarl by any Teekay Entities; or
(y) in the case of clause (iv) above, not later than 180 days
before the scheduled delivery date of the relevant Bid LNG Asset or 365
days after the delivery date of the relevant Bid Offshore Asset,
such acquiring party or such party proposing to Re-Charter the LNG Assets or
Offshore Assets (as applicable, the "Acquiring Party") shall notify (A) Teekay,
in the case of an acquisition by an LNG Partnership Group Member or an Offshore
Partnership Group Member of Crude Oil Assets, (B) Teekay LNG General Partner, in
the case of (x) an acquisition by a Teekay Entity or an Offshore Partnership
Group Member of LNG Assets, (y) a proposed acquisition of Bid LNG Assets or (z)
the proposed Re-Chartering by a Teekay Entity of LNG Assets or (C) Teekay
Offshore General Partner, in the case of (w) an acquisition by a Teekay Entity
or an LNG Partnership Group Member of Offshore Assets, (x) a proposed
acquisition of Bid Offshore Assets, (y) the acquisition of 100% ownership of
Petrojarl or (z) the proposed Re-Chartering by a Teekay Entity of Offshore
Assets, in each case of such acquisition (or proposed acquisition) or proposed
Re-Chartering, and offer such party to be notified (each an "Offeree") the
opportunity
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for the Offeree (or, in the case of Teekay, Teekay LNG General Partner or Teekay
Offshore General Partner, any other Teekay Entity, LNG Partnership Group Member
or Teekay Offshore Partnership Group Member, respectively) to purchase such
Crude Oil Assets, LNG Assets, Bid LNG Assets, Bid Offshore Assets or Offshore
Assets, including, with respect to Petrojarl, Offshore Assets subject to
Qualifying Contracts at the time Teekay acquires 100% ownership of Petrojarl
(including any Petrojarl interest in a joint venture that owns, operates or
charters an Offshore Asset subject to a Qualifying Contract), as applicable (the
"Offered Assets").
(b) The purchase price for any Offered Assets pursuant to
Section 5.1(a) above shall be (i) the Offered Assets' fair market value (plus
any Break-up Costs), in the case of Section 5.1(a)(i), (ii), (iii), (v) or (vi)
or (ii) the Offered Assets' Fully-Built-Up Cost, in the case of Section
5.1(a)(iv) or for Existing Offshore Project Assets, in each case on commercially
reasonable terms in accordance with this Section (the "Offer").
(c) The Offer shall set forth the Acquiring Party's proposed
terms relating to the purchase of the Offered Assets by the Offeree (or, in the
case of Teekay, Teekay LNG General Partner or Teekay Offshore General Partner,
any other Teekay Entity, LNG Partnership Group Member or Offshore Partnership
Group Member, respectively), including any liabilities to be assumed by the
Offeree as part of the Offer.
(d) As soon as practicable after the Offer is made, the
Acquiring Party will deliver to the Offeree all information prepared by or on
behalf of or in the possession of such Acquiring Party relating to the Offered
Assets and reasonably requested by the Offeree. As soon as practicable, but in
any event, within 90 days after receipt of such notification (30 days in the
case of a proposed Re-Chartering of LNG Assets or Offshore Assets), the Offeree
shall notify the Acquiring Party in writing that either:
(i) the Offeree (with the concurrence of the
applicable Conflicts Committee if the Offeree is Teekay LNG General
Partner or Teekay Offshore General Partner) has elected not to purchase
(or not to cause any of its permitted Affiliates to purchase) such
Offered Assets, in which event the Acquiring Party and its Affiliates
shall, subject to the other terms of this Agreement (including, without
limitation, this Section 5.1 and Article VI in connection with any
subsequently proposed Re-Chartering by a Teekay Entity of any LNG
Assets or Offshore Assets), be forever free to continue to own, operate
and charter such Offered Assets or, with respect to any proposed
Re-Chartering of LNG Assets or Offshore Assets, be free to Re-Charter
the LNG Assets or Offshore Assets in such instance as provided in
Article VI; or
(ii) the Offeree (with the concurrence of the
applicable Conflicts Committee if the Offeree is Teekay LNG General
Partner or Teekay Offshore General Partner) has elected to purchase (or
to cause any of its permitted Affiliates to purchase) such Offered
Assets, in which event the procedures set forth in Section 5.1(e) below
shall be followed.
AMENDED AND RESTATED OMNIBUS AGREEMENT
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(e) In the event of a proposed purchase pursuant to Section
5.1(d)(ii):
(i) After the receipt of the Offer by the Offeree,
the Acquiring Party and the Offeree shall determine the fair market
value (and any Break-up Costs) or the Fully-Built-Up Cost, as
applicable, of the Offered Assets that are subject to the Offer and the
other terms of the Offer on which the Offered Assets will be sold to
the Offeree. If the Acquiring Party and the Offeree agree (with the
concurrence of the applicable Conflicts Committee) on the fair market
value (and any Break-up Costs) or the Fully-Built-Up Cost, as
applicable, of the Offered Assets that are subject to the Offer and the
other terms of the Offer during the 30-day period after receipt by the
Acquiring Party of the Offeree's election to purchase (or to cause any
permitted Affiliate of the Offeree to purchase) the Offered Assets (the
"Offer Period"), the Offeree shall purchase (or cause any of its
permitted Affiliates to purchase) the Offered Assets on such terms as
soon as commercially practicable after such agreement has been reached.
(ii) If the Acquiring Party and the Offeree are
unable to agree on the fair market value (and any Break-up Costs) or
the Fully-Built-Up Cost, as applicable, of the Offered Assets that are
subject to the Offer or on any other terms of the Offer during the
Offer Period, the Acquiring Party and the Offeree will engage an
independent ship broker and/or an independent investment banking firm
prior to the end of the Offer Period to determine the fair market value
(and any Break-up Costs) or the Fully-Built-Up Cost, as applicable, of
the Offered Assets and/or the other terms on which the Acquiring Party
and the Offeree are unable to agree. In determining the fair market
value or the Fully-Built-Up Cost of the Offered Assets and other terms
on which the Offered Assets are to be sold, the ship broker or
investment banking firm, as applicable, will have access to the
proposed sale and purchase values and terms for the Offer submitted by
the Acquiring Party and the Offeree, respectively, and to all
information prepared by or on behalf of the Acquiring Party relating to
the Offered Assets and reasonably requested by such ship broker or
investment banking firm. Such ship broker or investment banking firm
will determine the fair market value (and any Break-up Costs) or
Fully-Built-Up Cost of the Offered Assets and/or the other terms on
which the Acquiring Party and the Offeree are unable to agree within 60
days of its engagement and furnish the Acquiring Party and the Offeree
its determination. The fees and expenses of the ship broker or
investment banking firm, as applicable, will be divided equally between
the Acquiring Party and the Offeree. Upon receipt of such
determination, the Offeree will have the option, but not the
obligation, to (with the concurrence of the applicable Conflicts
Committee if the Offeree is Teekay LNG General Partner or Teekay
Offshore General Partner):
(x) purchase the Offered Assets for the fair
market value (and any Break-up Costs) or Fully-Built-Up Cost,
as applicable, and on the other terms determined by the ship
broker or investment banking firm, as soon as commercially
practicable after determinations have been made; or
AMENDED AND RESTATED OMNIBUS AGREEMENT
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(y) elect not to purchase such Offered
Assets, in which event the Acquiring Party and its Affiliates
shall, subject to the other terms of this Agreement
(including, without limitation, this Section 5.1 and Article
VI in connection with any subsequently proposed Re-Chartering
by a Teekay Entity of any LNG Assets or Offshore Assets), be
forever free to continue to own, operate and/or charter such
Offered Assets or, with respect to any proposed Re-Chartering
of LNG Assets or Offshore Assets, be free to Re-Charter the
LNG Assets or Offshore Assets in such instance as provided in
Article VI.
5.2 SCOPE OF PROHIBITION. If any Party or its Affiliates engages in a
Restricted Business pursuant to any of the exceptions described in Section 2.2,
3.2 or 4.2, as applicable, the Party and its Affiliates may not subsequently
expand that portion of their business other than pursuant to the exceptions
contained in such Sections 2.2, 3.2 or 4.2. Except as otherwise provided in this
Agreement, the Teekay LNG MLP Agreement and the Teekay Offshore MLP Agreement,
each Party and its Affiliates shall be free to engage in any business activity
whatsoever, including those that may be in direct competition with the Teekay
Entities, the LNG Partnership Group or the Offshore Partnership Group.
5.3 ENFORCEMENT. Each Party agrees and acknowledges that the other
Parties do not have an adequate remedy at law for the breach by any such Party
of its covenants and agreements set forth in this Article V, and that any breach
by any such Party of its covenants and agreements set forth in this Article V
would result in irreparable injury to such other Parties. Each Party further
agrees and acknowledges that any other Party may, in addition to the other
remedies which may be available to such other Party, file a suit in equity to
enjoin such Party from such breach, and consent to the issuance of injunctive
relief to enforce the provisions of this Article V of this Agreement.
ARTICLE VI
RIGHTS OF FIRST OFFER
6.1 RIGHTS OF FIRST OFFER.
(a) The LNG Partnership Group hereby grants (i) Teekay a right
of first offer on any proposed Transfer or Re-Charter by any LNG Partnership
Group Member of any Crude Oil Assets owned or acquired by any LNG Partnership
Group Member and (ii) Teekay Offshore MLP a right of first offer on any proposed
Transfer or Re-Charter by any LNG Partnership Group Member of any Offshore
Assets owned or acquired by any LNG Partnership Group Member. The Offshore
Partnership Group hereby grants (i) Teekay a right of first offer on any
proposed Transfer or Re-Charter by any Offshore Partnership Group Member of any
Crude Oil Assets owned or acquired by any Offshore Partnership Group Member and
(ii) Teekay LNG General Partner a right of first offer on any proposed Transfer
or Re-Charter by any Offshore Partnership Group Member of any LNG Assets owned
or acquired by any Offshore Partnership Group Member. The Teekay Entities hereby
grant (i) Teekay LNG MLP a right of first offer on any proposed Transfer or,
subject to Section 5.1, Re-Charter of any LNG Assets owned or
AMENDED AND RESTATED OMNIBUS AGREEMENT
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acquired by any Teekay Entity and (ii) Teekay Offshore MLP a right of first
offer on any proposed Transfer or, subject to Section 5.1, Re-Charter of any
Offshore Assets owned or acquired by any Teekay Entity.
(b) The Parties acknowledge that all potential Transfers or
Re-Charters of Crude Oil Assets, LNG Assets or Offshore Assets pursuant to this
Article VI are subject to obtaining any and all written consents of governmental
authorities and other non-affiliated third parties and to the terms of all
existing agreements in respect of such Crude Oil Assets, LNG Assets or Offshore
Assets, as applicable.
6.2 PROCEDURES FOR RIGHTS OF FIRST OFFER. In the event that an LNG
Partnership Group Member, an Offshore Partnership Group Member or a Teekay
Entity (as applicable, the "Transferring Party") proposes to Transfer or
Re-Charter any Crude Oil Assets, LNG Assets or Offshore Assets, as applicable
(the "Sale Assets"), prior to engaging in any negotiation for such Transfer or
Re-Charter with any non-affiliated third party or otherwise offering to Transfer
or Re-Charter the Sale Assets to any non-affiliated third party, such
Transferring Party shall give Teekay, Teekay LNG MLP or Teekay Offshore MLP, as
applicable (the "Potential Transferee"), written notice setting forth all
material terms and conditions (including, without limitation, the purchase price
(in the event of a Transfer) or the terms of the charter agreement (in the event
of a Re-Charter) and a description of the Sale Asset(s) on which such
Transferring Party desires to Transfer or Re-Charter the Sale Assets (the
"Transfer Notice"). The material terms set forth in the Transfer Notice shall
have been approved, in any case where an LNG Partnership Group Member or an
Offshore Partnership Group Member is the Transferring Party, by the applicable
Conflicts Committee of Teekay LNG General Partner or Teekay Offshore General
Partner. Subject to Section 5.1 with respect to any proposed Re-Charter by a
Teekay Entity of any LNG Assets or Offshore Assets, the Transferring Party then
shall be obligated to negotiate in good faith for a 30-day period following the
delivery by the Transferring Party of the Transfer Notice (the "First Offer
Negotiation Period") to reach an agreement for the Transfer or Re-Charter of
such Sale Assets to the Potential Transferee or any of its Affiliates on the
terms and conditions set forth in the Transfer Notice. Subject to Section 5.1
with respect to any proposed Re-Charter by a Teekay Entity of any LNG Assets or
Offshore Assets, if no such agreement with respect to the Sale Assets is reached
during the First Offer Negotiation Period, and the Transferring Party has not
Transferred or Re-Chartered, or agreed in writing to Transfer or Re-Charter,
such Sale Assets to a third party within 180 days after the end of the First
Offer Negotiation Period on terms generally no less favorable to the
Transferring Party than those included in the Transfer Notice, then the
Transferring Party shall not thereafter Transfer or Re-Charter any of the Sale
Assets without first offering such assets to the applicable Potential Transferee
in the manner provided above.
AMENDED AND RESTATED OMNIBUS AGREEMENT
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ARTICLE VII
INDEMNIFICATION
7.1 TEEKAY INDEMNIFICATION. Subject to the provisions of Section 7.2
and Section 7.3, Teekay shall indemnify, defend and hold harmless the LNG
Partnership Group and the Offshore Partnership Group, respectively, from and
against: (a) any Covered Environmental Losses relating to the applicable
Contribution Assets and events, circumstances or conditions existing prior to or
on the LNG Closing Date or the Offshore Closing Date, respectively, to the
extent that Teekay is notified by Teekay LNG General Partner or Teekay Offshore
General Partner of any such Covered Environmental Losses within five (5) years
after the LNG Closing Date or the Offshore Closing Date, as applicable; (b)
Losses to the Teekay LNG Partnership Group or the Teekay Offshore Partnership
Group, as applicable, arising from (i) the failure of (A) the LNG Partnership
Group, immediately after the LNG Closing Date, or (B) the Offshore Partnership
Group, immediately after the Offshore Closing Date, to be the owner of such
valid leasehold interests or fee ownership interests in and to the applicable
Contribution Assets as are necessary to enable the LNG Partnership Entities or
the Offshore Partnership Entities to own and operate such Contribution Assets in
substantially the same manner that such Contribution Assets were owned and
operated by the Teekay Entities immediately prior to the LNG Closing Date or the
Offshore Closing Date, as applicable, or (ii) the failure of (A) the LNG
Partnership Entities to have on the LNG Closing Date or (B) the Offshore
Partnership Entities to have on the Offshore Closing Date, as applicable, any
consent or governmental permit necessary to allow the LNG Partnership Entities
or the Offshore Partnership Entities, as applicable, to own or operate the
applicable Contribution Assets in substantially the same manner that such
Contribution Assets were owned and operated by the Teekay Entities immediately
prior to the LNG Closing Date or the Offshore Closing Date, as applicable, in
each of clauses (i) and (ii) above, to the extent that Teekay is notified by
Teekay LNG General Partner or Teekay Offshore General Partner of such Losses
within three (3) years after the LNG Closing Date or the Offshore Closing Date,
as applicable; (c) all U.S. federal, state and local and all foreign income tax
liabilities attributable to the operation of the applicable Contribution Assets
prior to the LNG Closing Date or the Offshore Closing Date, as applicable,
including any such income tax liabilities of the Teekay Entities that may result
from the consummation of the formation transactions for the LNG Partnership
Group and Teekay LNG General Partner or the Offshore Partnership Group and
Teekay Offshore General Partner, as applicable, but excluding any U.S. federal,
state and local and any foreign income taxes reserved on the books of the LNG
Partnership Group on the LNG Closing Date or of the Offshore Partnership Group
as of the Offshore Closing Date; (d) any events or conditions attributable to or
associated with ownership or operation of the Retained Assets, whether occurring
before or after the LNG Closing Date or the Offshore Closing Date; and (e) any
Retained Liabilities.
7.2 LIMITATION REGARDING INDEMNIFICATION.
(a) The aggregate liability of Teekay under Section 7.1(a) above in
connection with the LNG Partnership Group and the LNG Contribution Assets shall
not exceed $10 million.
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Furthermore, no claim may be made against Teekay for indemnification pursuant to
Section 7.1(a) in connection with the LNG Partnership Group and the LNG
Contribution Assets unless the aggregate dollar amount of all claims for
indemnification by the LNG Partnership Group pursuant to such section shall
exceed $500,000, in which case Teekay shall be liable for claims for
indemnification only to the extent such aggregate amount exceeds $500,000.
(b) The aggregate liability of Teekay under Section 7.1(a) above in
connection with the Offshore Partnership Group and the Offshore Contribution
Assets shall not exceed $10 million. Furthermore, no claim may be made against
Teekay for indemnification pursuant to Section 7.1(a) in connection with the
Offshore Partnership Group and the Offshore Contribution Assets unless the
aggregate dollar amount of all claims for indemnification by the Offshore
Partnership Group pursuant to such section shall exceed $500,000, in which case
Teekay shall be liable for claims for indemnification only to the extent such
aggregate amount exceeds $500,000.
7.3 INDEMNIFICATION PROCEDURES.
(a) The LNG Partnership Group Members and the Offshore
Partnership Group Members agree that within a reasonable period of time after
they become aware of facts giving rise to a claim for indemnification pursuant
to Section 7.1, they will provide notice thereof in writing to Teekay specifying
the nature of and specific basis for such claim.
(b) Teekay shall have the right to control all aspects of the
defense of (and any counterclaims with respect to) any claims of third parties
brought against the LNG Partnership Group or the Offshore Partnership Group that
are covered by the indemnification set forth in Section 7.1, 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 Teekay
LNG General Partner, on behalf of the LNG Partnership Group, or Teekay Offshore
General Partner, on behalf of the Offshore Partnership Group, as applicable
(with the concurrence of the applicable Conflicts Committee), unless it includes
a full release of the LNG Partnership Group or the Offshore Partnership Group,
as applicable, from such matter or issues, as the case may be.
(c) The LNG Partnership Group Members and the Offshore
Partnership Group Members agree to cooperate fully with Teekay with respect to
all aspects of the defense of any claims covered by the indemnification set
forth in Section 7.1, including, without limitation, the prompt furnishing to
Teekay of any correspondence or other notice relating thereto that the LNG
Partnership Group or the Offshore Partnership Group may receive, permitting the
names of the members of the LNG Partnership Group or the Offshore Partnership
Group, as applicable, to be utilized in connection with such defense, the making
available to Teekay of any files, records or other information of the LNG
Partnership Group or the Offshore Partnership Group that Teekay considers
relevant to such defense and the making available to Teekay of any employees of
the LNG Partnership Group or the Offshore Partnership Group, as applicable;
provided, however, that in connection therewith Teekay agrees to use reasonable
efforts to minimize the impact
AMENDED AND RESTATED OMNIBUS AGREEMENT
-21-
thereof on the operations of the LNG Partnership Group and the Offshore
Partnership Group and further agrees to maintain the confidentiality of all
files, records and other information furnished by an LNG Partnership Group
Member or an Offshore Partnership Group Member pursuant to this Section 7.3. In
no event shall the obligation of the LNG Partnership Group or the Offshore
Partnership Group, as applicable, to cooperate with Teekay as set forth in the
immediately preceding sentence be construed as imposing upon the LNG Partnership
Group or the Offshore Partnership Group an obligation to hire and pay for
counsel in connection with the defense of any claims covered by the
indemnification set forth in this Article VII; provided, however, that the LNG
Partnership Group Members and the Offshore Partnership Group Members,
respectively, may, at their own option, cost and expense, hire and pay for
counsel in connection with any such defense. Teekay agrees to keep any such
counsel hired by the LNG Partnership Group or the Offshore Partnership Group
reasonably informed as to the status of any such defense (including providing
such counsel with such information related to any such defense as such counsel
may reasonably request) but Teekay shall have the right to retain sole control
over such defense.
(d) In determining the amount of any Loss for which any of the
members of the LNG Partnership Group or the Offshore Partnership Group, as
applicable, are entitled to indemnification under this Agreement, the gross
amount of the indemnification will be reduced by (i) any insurance proceeds
realized by the LNG Partnership Group or the Offshore Partnership Group, as
applicable, and such correlative insurance benefit shall be net of any
incremental insurance premium that becomes due and payable by the LNG
Partnership Group or the Offshore Partnership Group as a result of such claim,
and (ii) all amounts recovered by the LNG Partnership Group or the Offshore
Partnership Group, as applicable, under contractual indemnities from third
Persons. Teekay LNG MLP and Teekay Offshore MLP each 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 LNG Partnership Group or the Offshore
Partnership Group, as applicable, in connection with such efforts shall be
promptly reimbursed by Teekay in advance of any determination of whether such
insurance proceeds or other amounts will be recoverable.
ARTICLE VIII
MISCELLANEOUS
8.1 CHOICE OF LAW; SUBMISSION TO JURISDICTION. This Agreement shall be
subject to and governed by the laws of the State of New York, excluding any
conflicts-of-law rule or principle that might refer the construction or
interpretation of this Agreement to the laws of another jurisdiction. Each party
hereby submits to the jurisdiction of the state and federal courts located in
the State of New York and to venue in New York, New York.
8.2 NOTICE. All notices or requests or consents provided for or
permitted to be given pursuant to this Agreement must be in writing and must be
given by depositing same in the mail,
AMENDED AND RESTATED OMNIBUS AGREEMENT
-22-
addressed to the Person to be notified, postpaid, and registered or certified
with return receipt requested or by delivering such notice in person or by
private-courier, prepaid, or by telecopier to such party. Notice given by
personal delivery or mail shall be effective upon actual receipt. Couriered
notices shall be deemed delivered on the date the courier represents that
delivery will occur. Notice given by telecopier shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices to be sent to a party
pursuant to this Agreement shall be sent to or made at the address set forth
below such party's signature to this Agreement, or at such other address as such
party may stipulate to the other parties in the manner provided in this Section.
8.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties relating to the matters contained herein, superseding all prior
contracts or agreements, whether oral or written, relating to the matters
contained herein, including, without limitation, the Original Agreement.
8.4 TERMINATION. The provisions of Articles II, III, IV, V and VI of
this Agreement (but not less than all of such Articles) may be terminated by (a)
Teekay, with respect to all Teekay Entities, upon notice to the other Parties
upon a Change of Control of Teekay, (b) Teekay LNG General Partner, with respect
to the Teekay LNG Partnership Group, upon notice to the other Parties upon a
Change of Control of Teekay LNG General Partner, and (c) Teekay Offshore General
Partner, with respect to the Teekay Offshore Partnership Group, upon notice to
the other Parties upon a Change of Control of Teekay Offshore General Partner.
8.5 WAIVER; EFFECT OF WAIVER OR CONSENT. Any party hereto may (a)
extend the time for the performance of any obligation or other act of any other
party hereto or (b) waive compliance with any agreement or condition contained
herein. Except as otherwise specifically provided herein, any such extension or
waiver shall be valid only if set forth in a written instrument duly executed by
the party or parties to be bound thereby; provided, however, that (x) Teekay LNG
MLP and Teekay LNG OLLC may not, without the prior approval of Teekay LNG
General Partner's Conflicts Committee, agree to any extension or waiver of this
Agreement that, in the reasonable discretion of Teekay LNG General Partner, will
adversely affect the holders of common units of Teekay LNG MLP and (y) Teekay
Offshore MLP, Teekay Offshore Operating General Partner and Teekay Offshore OLP
may not, without the prior approval of Teekay Offshore General Partner's
Conflicts Committee, agree to any extension or waiver of this Agreement that, in
the reasonable discretion of Teekay Offshore General Partner, will adversely
affect the holders of common units of Teekay Offshore MLP. No waiver or consent,
express or implied, by any party of or to any breach or default by any Person in
the performance by such Person of its obligations hereunder shall be deemed or
construed to be a waiver or consent of or to any other breach or default in the
performance by such Person of the same or any other obligations of such Person
hereunder. Failure on the part of a party to complain of any act of any Person
or to declare any Person in default, irrespective of how long such failure
continues, shall
AMENDED AND RESTATED OMNIBUS AGREEMENT
-23-
not constitute a waiver by such party of its rights hereunder until the
applicable statute of limitations period has run.
8.6 AMENDMENT OR MODIFICATION. This Agreement may be amended or
modified from time to time only by the written agreement of all the parties
hereto; provided, however, that (a) Teekay LNG MLP and Teekay LNG OLLC may not,
without the prior approval of Teekay LNG General Partner's Conflicts Committee,
agree to any amendment or modification of this Agreement that, in the reasonable
discretion of Teekay LNG General Partner, will adversely affect the holders of
common units of Teekay LNG MLP, and (b) Teekay Offshore MLP, Teekay Offshore
Operating General Partner and Teekay Offshore OLP may not, without the prior
approval of Teekay Offshore General Partner's Conflicts Committee, agree to any
amendment or modification of this Agreement that, in the reasonable discretion
of Teekay Offshore General Partner, will adversely affect the holders of common
units of Teekay Offshore MLP.
8.7 ASSIGNMENT. No party shall have the right to assign its rights or
obligations under this Agreement without the consent of the other parties
hereto.
8.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts with the same effect as if all signatory parties had signed the
same document. All counterparts shall be construed together and shall constitute
one and the same instrument.
8.9 SEVERABILITY. If any provision of this Agreement or the application
thereof to any Person or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such
provision to other Persons or circumstances shall not be affected thereby and
shall be enforced to the greatest extent permitted by law.
8.10 GENDER, PARTS, ARTICLES AND SECTIONS. Whenever the context
requires, the gender of all words used in this Agreement shall include the
masculine, feminine and neuter, and the number of all words shall include the
singular and plural. All references to Article numbers and Section numbers refer
to Articles and Sections of this Agreement.
8.11 FURTHER ASSURANCES. In connection with this Agreement and all
transactions contemplated by this Agreement, each signatory party hereto agrees
to execute and deliver such additional documents and instruments and to perform
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions.
8.12 WITHHOLDING OR GRANTING OF CONSENT. Each party may, with respect
to any consent or approval that it is entitled to grant pursuant to this
Agreement, grant or withhold such consent or approval in its sole and
uncontrolled discretion, with or without cause, and subject to such conditions
as it shall deem appropriate.
8.13 LAWS AND REGULATIONS. Notwithstanding any provision of this
Agreement to the contrary, no party to this Agreement shall be required to take
any act, or fail to take any act,
AMENDED AND RESTATED OMNIBUS AGREEMENT
-24-
under this Agreement if the effect thereof would be to cause such party to be in
violation of any applicable law, statute, rule or regulation.
8.14 NEGOTIATION OF RIGHTS OF TEEKAY, LIMITED PARTNERS, ASSIGNEES, AND
THIRD PARTIES. The provisions of this Agreement are enforceable solely by the
parties to this Agreement, and no shareholder of Teekay and no limited partner,
member, assignee or other Person of Teekay LNG MLP, Teekay LNG OLLC, Teekay
Offshore MLP, Teekay Offshore Operating General Partner or Teekay Offshore OLP
shall have the right, separate and apart from Teekay, Teekay LNG MLP, Teekay LNG
OLLC, Teekay Offshore MLP, Teekay Offshore Operating General Partner or Teekay
Offshore OLP, to enforce any provision of this Agreement or to compel any party
to this Agreement to comply with the terms of this Agreement.
[SIGNATURE PAGE FOLLOWS]
AMENDED AND RESTATED OMNIBUS AGREEMENT
-25-
IN WITNESS WHEREOF, the Parties have executed this Amended and Restated
Omnibus Agreement on, and effective as of, the Offshore Closing Date.
TEEKAY SHIPPING CORPORATION
By:
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Executive Vice President and Chief
Financial Officer
Address for Notice:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇
▇▇▇▇▇▇, Commonwealth of the Bahamas
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
TEEKAY GP L.L.C.
By:
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer and Chief
Financial Officer
Address for Notice:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇
▇▇▇▇▇▇, Commonwealth of the Bahamas
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
AMENDED AND RESTATED OMNIBUS AGREEMENT
SIGNATURE PAGE
TEEKAY LNG OPERATING L.L.C.
By: Teekay LNG Partners L.P.,
its sole member
By: Teekay GP L.L.C.,
its general partner
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer and Chief
Financial Officer
Address for Notice:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇
▇▇▇▇▇▇, Commonwealth of the Bahamas
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
TEEKAY LNG PARTNERS L.P.
By: Teekay GP L.L.C., its general partner
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer and Chief
Financial Officer
Address for Notice:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇
▇▇▇▇▇▇, Commonwealth of the Bahamas
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
AMENDED AND RESTATED OMNIBUS AGREEMENT
SIGNATURE PAGE
TEEKAY OFFSHORE GP L.L.C.
By:
----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer and Chief
Financial Officer
Address for Notice:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇
▇▇▇▇▇▇, Commonwealth of the Bahamas
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
TEEKAY OFFSHORE OPERATING GP L.L.C.
By: Teekay Offshore Partners L.P.,
its sole member
By: Teekay Offshore GP L.L.C.,
its general partner
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer and Chief
Financial Officer
Address for Notice:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇
▇▇▇▇▇▇, Commonwealth of the Bahamas
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
AMENDED AND RESTATED OMNIBUS AGREEMENT
SIGNATURE PAGE
TEEKAY OFFSHORE OPERATING L.P.
By: Teekay Offshore Operating GP L.L.C.,
its general partner
By: Teekay Offshore Partners L.P.,
its sole member
By: Teekay Offshore GP L.L.C.,
its general partner
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer and Chief
Financial Officer
Address for Notice:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇
▇▇▇▇▇▇, Commonwealth of the Bahamas
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
TEEKAY OFFSHORE PARTNERS L.P.
By: Teekay Offshore GP L.L.C.,
its general partner
By:
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Executive Officer and Chief
Financial Officer
Address for Notice:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇▇
▇▇▇▇▇▇, Commonwealth of the Bahamas
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
AMENDED AND RESTATED OMNIBUS AGREEMENT
SIGNATURE PAGE