EXHIBIT 10
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LIMITED LIABILITY COMPANY AGREEMENT
OF
ALASKA TANKER COMPANY, L.L.C.
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TABLE OF CONTENTS
ARTICLE I.
DEFINITIONS
1.01 CERTAIN DEFINITIONS 1
1.02 CONSTRUCTION 5
ARTICLE II.
ORGANIZATION
2.01 FORMATION 5
2.02 NAME 5
2.03 REGISTERED OFFICE; REGISTERED AGENT; OTHER
OFFICES 5
2.04 PURPOSES AND POWERS 6
2.05 FOREIGN QUALIFICATION 6
2.06 TERM 6
2.07 MERGER OR CONSOLIDATION 6
2.08 NO STATE LAW PARTNERSHIP 6
2.09 LIABILITY OF MEMBERS 6
ARTICLE III.
MEMBERS; MEMBERSHIP INTERESTS
3.01 INITIAL MEMBERS 7
3.02 REPRESENTATIONS, WARRANTIES AND COVENANTS 7
3.03 DISPOSITIONS OF MEMBERSHIP INTERESTS 8
3.04 ENCUMBRANCES 11
3.05 ADDITIONAL MEMBERS 12
3.06 CHANGE OF MEMBER CONTROL 12
ARTICLE IV.
CAPITAL CONTRIBUTIONS
4.01 INITIAL CONTRIBUTIONS 13
4.02 SUBSEQUENT CONTRIBUTIONS 13
4.03 [INTENTIONALLY OMITTED] 13
4.04 ADVANCES BY MEMBERS 14
4.05 RETURN OF CONTRIBUTIONS 14
4.06 CAPITAL ACCOUNTS 14
ARTICLE V.
ALLOCATIONS AND DISTRIBUTIONS
5.01 ALLOCATIONS FOR CAPITAL ACCOUNT AND TAX
PURPOSES 15
5.02 DISTRIBUTIONS 16
ARTICLE VI.
MANAGEMENT AND OPERATION
6.01 MANAGEMENT OF COMPANY AFFAIRS 16
6.02 MEMBER COMMITTEE 16
6.03 COMPENSATION 19
6.04 EXCULPATION 20
6.05 INDEMNIFICATION 20
6.06 FIDUCIARY DUTY 21
ARTICLE VII.
INFORMATION AND CONFIDENTIALITY
7.01 INFORMATION 21
7.02 CONFIDENTIALITY 21
ARTICLE VIII.
TAXES
8.01 TAX RETURNS 22
8.02 TAX ELECTIONS 22
8.03 TAX MATTERS MEMBER 22
ARTICLE IX.
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
9.01 MAINTENANCE OF BOOKS AND RECORDS 23
9.02 REPORTS 23
9.03 ACCOUNTS 24
ARTICLE X.
RESIGNATION, BANKRUPTCY, ETC.
10.01 RESIGNATION 24
10.02 MEMBERSHIP INTEREST 24
ARTICLE XI.
DISSOLUTION, LIQUIDATION, AND TERMINATION
11.01 DISSOLUTION 25
11.02 LIQUIDATION AND TERMINATION 25
11.03 TERMINATION 27
11.04 WITHDRAWAL OF BP 27
ARTICLE XII.
GENERAL PROVISIONS
12.01 OFFSET 27
12.02 NOTICES 27
12.03 ENTIRE AGREEMENT; SUPERSEDURE 27
12.04 EFFECT OF WAIVER OR CONSENT 27
12.05 AMENDMENT OR MODIFICATION 28
12.06 BINDING EFFECT 28
12.07 GOVERNING LAW; SEVERABILITY; LITIGATION 28
12.08 DISPUTE RESOLUTION 28
12.09 FURTHER ASSURANCES 29
12.10 COUNTERPARTS 29
ARTICLE XIII.
APPROVAL BY THE MARITIME ADMINISTRATION
13.01 AFFIDAVIT OF CITIZENSHIP 29
13.02 MARAD APPROVAL 29
13.03 MODIFICATION 30
SCHEDULE A MEMBERS AND SHARING RATIOS
SCHEDULE B UNANIMOUS CONSENT MATTERS
SCHEDULE C CORE BUSINESS PRINCIPLES
LIMITED LIABILITY COMPANY AGREEMENT
OF
ALASKA TANKER COMPANY, L.L.C.
This LIMITED LIABILITY COMPANY AGREEMENT OF ALASKA
TANKER COMPANY, L.L.C. (this "AGREEMENT") is made and entered
into as of March 30, 1999 (the "EFFECTIVE DATE"), by and among
the Members (as defined below).
FOR AND IN CONSIDERATION OF the mutual covenants,
rights, and obligations set forth in this Agreement, the benefits
to be derived from them, and other good and valuable
consideration, the receipt and sufficiency of which each Member
acknowledges, the Members agree as follows:
ARTICLE I.
DEFINITIONS
1.01 CERTAIN DEFINITIONS. As used in this Agreement, the
following terms have the respective meanings set forth below:
"ACCEPTANCE" has the meaning given such term in
SECTION 3.03(c).
"ACQUISITION PROPOSAL" has the meaning given such term in
SECTION 3.03(c).
"ACT" means the Delaware Limited Liability Company Act and
any successor statute, as amended from time to time.
"AFFECTED MEMBER" has the meaning given such term in
SECTION 10.02.
"AFFILIATE" means, with respect to any Person, a Person that
directly, or indirectly through one or more intermediaries,
Controls, is Controlled by, or is under common Control with such
first Person, provided that the Company shall not be deemed to be
an Affiliate of any Member or any of their respective Affiliates.
"AGREEMENT" has the meaning given such term in the
introductory paragraph of this Agreement.
"ALTERNATE REPRESENTATIVES" has the meaning given such term
in SECTION 6.02(a).
"APPROVED BUSINESS PLAN" means a Business Plan and any
amendments and revisions thereto that has been approved by the
Member Committee pursuant to SECTION 6.02(b). If the Member
Committee has not approved a Business Plan by the beginning of
any year, the prior year's Approved Business Plan shall continue
to apply until the matter or matters preventing approval of a new
Business Plan are resolved. The approved business plan shall
take into account any funds received by the Company from BP under
the Assignment of Time Charters for the KENAI and the TONSINA
pursuant to Article VIII.B of the Time Charters for that portion
of hire defined as "Overhead Element" and for the DENALI pursuant
to Article VIII.B of the Time Charter for that portion of hire
known as the "Management Fee" in its budgetary process.
"BANKRUPT MEMBER" means any Member with respect to which an
event of the type described in section 18-304 of the Act has
occurred, subject to the lapsing of any period of time therein
specified.
"BP" means BP Oil Shipping Company USA, Inc., a Delaware
corporation and an indirect wholly-owned subsidiary of BP Amoco
p.l.c.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
bank holiday in Portland, Oregon.
"BUSINESS PLAN" shall mean the projected operating and
capital spending budgets of the Company for each calendar year
(or in the case of the initial Business Plan the applicable
portion thereof) and shall set forth income and expense
projections and planned contributions and financing.
"CAPITAL ACCOUNT" means the capital account maintained for a
Member pursuant to SECTION 4.06.
"CAPITAL CONTRIBUTION" means any contribution of cash or
property by a Member to the capital of the Company.
"CERTIFICATE" has the meaning given such term in
SECTION 2.01.
"CHANGE OF MEMBER CONTROL" means, (i) with respect to BP and
OSG, an event (such as a Disposition of voting securities) that
causes such Member to cease to be completely Controlled by such
Member's Parent and (ii) with respect to Keystone, an event which
results in Keystone being controlled by a Person other than its
initial members and ▇▇▇▇. ▇▇▇▇ & Co., Inc.
"CITIZEN" has the meaning given such term in Section 2 of the
Shipping Act of 1916, 46 USC section 802, as amended from time to
time and, with respect to a Person other than a natural person,
qualified to operate a vessel in the United States coastwise
trade.
"CODE" means the U.S. Internal Revenue Code of 1986 and any
successor statute, as amended from time to time.
"COMPANY" means Alaska Tanker Company, L.L.C. a Delaware
limited liability company.
"CONTROL" means the power to elect the majority of the board
of directors or comparable governing body of a Person, or if
there is no such body, the power to direct the management of such
Person.
"CONTROL ACCEPTANCE" has the meaning given such term in
SECTION 3.05.
"CONTROL OFFER" has the meaning given such term in
SECTION 3.05.
"CONTROL OFFER PERIOD" has the meaning given such term in
SECTION 3.05.
"CORE BUSINESS PRINCIPLES" means the health, safety,
environmental, ethical, operating and other principles and
standards which the Company will use its best efforts to achieve,
as set forth in Schedule C.
"DELINQUENT MEMBER" has the meaning given such term in
SECTION 4.03(a).
"DISPOSE, DISPOSING OR DISPOSITION" means, with respect to
any Membership Interest, a sale, assignment, transfer,
conveyance, gift, exchange or other disposition of such
Membership Interest, whether such disposition be voluntary,
involuntary or by operation of Law, including the following:
(a) in the case of a Membership Interest owned by an entity,
(i) a merger or consolidation of such entity (other than where
such entity is the survivor thereof), or (ii) a distribution of
such Membership Interest, including in connection with the
dissolution, liquidation, winding-up or termination of such
entity (unless, in the case of dissolution, such entity's
business is continued without the commencement of liquidation or
winding-up); and (b) a disposition in connection with, or in lieu
of, a foreclosure of an Encumbrance; but such terms shall not
include the creation of an Encumbrance.
"DISPOSING MEMBER" means a Member desiring to Dispose of its
Membership Interest.
"EFFECTIVE DATE" has the meaning given such term in the
introductory paragraph of this Agreement.
"ENCUMBER, ENCUMBERING, OR ENCUMBRANCE" means the creation of
a security interest, lien, pledge, mortgage or other encumbrance,
whether such encumbrance be voluntary, involuntary or by
operation of Law.
"FAIR MARKET VALUE" has the meaning given such term in
SECTION 3.05.
"FORMATION AGREEMENT" means the Formation Agreement, dated
December 16, 1998, among BP, Keystone and OSG, pertaining, in
part, to the formation of the Company.
"GAAP" means United States generally accepted accounting
principles as in effect from time to time, consistently applied.
"GOVERNMENTAL AUTHORITY" or "GOVERNMENTAL" means a federal,
state, provincial, local or foreign governmental authority,
including the United States of America; a state, province,
commonwealth, territory or district thereof; a county or parish;
a city, town, township, village or other municipality; a
district, ▇▇▇▇ or other subdivision of any of the foregoing; any
executive, legislative or other governing body of any of the
foregoing; any agency, authority, board, department, system,
service, office, commission, committee, council or other
administrative body of any of the foregoing, including MARAD; any
court or other judicial body; and any officer, official or other
representative of any of the foregoing.
"INDEMNITEE" has the meaning given such term in SECTION 6.05.
"INTEREST" has the meaning given that term in
SECTION 3.03(c).
"▇▇▇▇▇ ACT" means section 27 of the Merchant Marine Act of
1920, as amended from time to time.
"KEYSTONE" means Keystone Alaska, LLC, a Delaware limited
liability company.
"LAW" means any applicable constitutional provision, statute,
act, code (including the Code), law, regulation, rule, ordinance,
order, decree, ruling, proclamation, resolution, judgment,
decision, declaration, or unappealable or non-contestable
interpretative or advisory opinion or letter of a Governmental
Authority having valid jurisdiction.
"LEGAL REQUIREMENTS" means any and all applicable
(a) federal, state, provincial, local and foreign Laws, (b) non-
appealable judgments and (c) consent decrees and similar
arrangements.
"LENDING MEMBER" has the meaning given such term in
SECTION 4.03(a).
"MARAD" means the United States Maritime Administration,
Department of Transportation.
"MEMBER COMMITTEE" has the meaning given such term in
SECTION 6.02.
"MEMBERS" means those Persons executing this Agreement as a
Member or hereafter admitted to the Company as a Member as
provided in this Agreement and "MEMBER" means any one of them.
"MEMBERSHIP INTEREST" means the interest of a Member in the
Company, including rights to distributions (liquidating or
otherwise), allocations, information, and to consent, approve or
otherwise participate in the management of the Company as
provided herein.
"OFFER" has the meaning given such term in SECTION 3.03(c).
"OFFER PERIOD" has the meaning given such term in
SECTION 3.03(c).
"OFFEREE" has the meaning given such term in SECTION 3.03(c).
"OFFEREE MEMBER" has the meaning given such term in
SECTION 3.05.
"OFFERING MEMBER" has the meaning given such term in
SECTION 3.05.
"OFFEROR" has the meaning given such term in SECTION 3.03(c).
"OSG" means OSG Ship Management, Inc.
"PARENT" in the case of BP means BP Amoco p.l.c. and in the
case of OSG means Overseas Shipholding Group, Inc.
"PERSON" has the meaning given that term in section
18-101(12) of the Act.
"PRIME INTEREST RATE" means a rate per annum equal to the
varying rate per annum that is equal to the interest rate
publicly quoted by ▇▇▇▇▇▇ Guaranty Trust Co. of New York, from
time to time as its prime commercial or similar reference
interest rate, with adjustments in that varying rate to be made
on the same date as any change in that rate.
"REPRESENTATIVE" has the meaning given such term in
SECTION 6.02(a).
"RETURN" has the meaning given such term in SECTION 8.01.
"SHARING RATIO" means the Sharing Ratio specified for a
Member set forth in SCHEDULE A as such exhibit may be amended
from time to time as provided herein.
"UNANIMOUS CONSENT MATTERS" means those decisions requiring
the unanimous vote of the Member Committee as further described
in the attached SCHEDULE B.
1.02 CONSTRUCTION. Unless the context requires otherwise:
(a) the gender (or lack of gender) of all words used in this
Agreement includes the masculine, feminine, and neuter;
(b) references to Articles and Sections refer to articles and
sections of this Agreement; (c) references to Exhibits and
Schedules are to Exhibits and Schedules attached to this
Agreement, each of which is made a part of this Agreement for all
purposes; (d) references to Laws refers to Laws as they may be
amended from time to time, and references to particular
provisions of a Law include any corresponding provisions of any
succeeding Law; (e) references to money refer to legal currency
of the United States of America; and (f) the word "including"
means "including without limitation."
ARTICLE II.
ORGANIZATION
2.01 FORMATION. The Company will be organized as a Delaware
limited liability company by the filing of a Certificate of
Formation dated as of the Effective Date (as amended or restated
from time to time, the "CERTIFICATE"), with the Secretary of
State of Delaware pursuant to the Act.
2.02 NAME. The name of the Company is "Alaska Tanker Company,
L.L.C." and all Company business must be conducted in that name
or such other names that comply with applicable Law as the Member
Committee may select from time to time.
2.03 REGISTERED OFFICE; REGISTERED AGENT; OTHER OFFICES. The
registered office of the Company required by the Act to be
maintained in the State of Delaware shall be the office of the
initial registered agent named in the Certificate or such other
office (which need not be a place of business of the Company) as
the Member Committee may designate from time to time through
amendment of the Certificate. The registered agent for service
of process on the Company in the State of Delaware or any other
jurisdiction shall be such Person or Persons as the Member
Committee may designate from time to time. The principal office
of the Company in the United States shall be at Cornell Oaks
Corporate Center - Parkside, Suite A.400, ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ or such other place as the
Member Committee may designate, which need not be in the State of
Oregon. The Company may have such other offices as the Member
Committee may designate from time to time.
2.04 PURPOSES AND POWERS.
(a) The purpose of the Company is to: (i) charter and
operate vessels, and manage the chartering, operation,
maintenance and ▇▇▇▇▇▇▇ of vessels engaged in the transportation
of Alaskan-produced hydrocarbons to destinations designated by
vessel charterers, and (ii) provide tonnage planning and ship
scheduling services to such vessel charterers. The Company
shall not engage in any other business, except (i) as permitted
by SECTION 2.04(b), or (ii) as determined by the unanimous
consent of the Member Committee.
(b) The Company shall have the power and authority to
take any and all actions incidental, proper, advisable, or
convenient to accomplish the purpose set forth in SECTION 2.04(a)
(including shall have and exercise the powers granted to a
limited liability company by the Act in any state, territory,
district or possession of the United States, or in any foreign
country).
2.05 FOREIGN QUALIFICATION. The Company shall initially
qualify to do business as a foreign limited liability company in
the State of Oregon. Any additional qualifications or
withdrawals shall be approved by the Member Committee.
2.06 TERM. The period of existence of the Company commences
on the Effective Date and shall be perpetual unless sooner
dissolved and terminated pursuant to ARTICLE XI.
2.07 MERGER OR CONSOLIDATION. The Company may, with the
unanimous consent of the Member Committee, merge or consolidate
with or into another limited liability company or other business
entity, or enter into an agreement to do so.
2.08 NO STATE LAW PARTNERSHIP. The Members intend that the
Company not be a partnership (including a limited partnership) or
joint venture, and that no Member be a partner or joint venturer
of any other Member, for any purposes other than federal and
state tax and accounting purposes, and this Agreement may not be
construed to suggest otherwise.
2.09 LIABILITY OF MEMBERS. Except as set forth in the Act, a
Member is not liable for the debts, liabilities and obligations
of the Company.
ARTICLE III.
MEMBERS; MEMBERSHIP INTERESTS
3.01 INITIAL MEMBERS. The initial Members of the Company are
the Persons executing this Agreement as of the Effective Date,
each of which is admitted to the Company as a Member, effective
with the commencement of the Company.
3.02 REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) REPRESENTATIONS AND WARRANTIES.
(i) Each Member represents and warrants to the
Company and each other Member that, as of the date of its
admission as a Member, (1) it is duly organized, validly
existing, and in good standing under the Laws of the state of its
formation and is duly qualified and in good standing in the
jurisdiction of its principal place of business, (2) it has full
power and authority to enter into this Agreement and to perform
its obligations under this Agreement and all necessary actions by
its board of directors, shareholders, Members, partners, or other
Persons necessary for the due authorization, execution, delivery,
and performance of this Agreement by that Member have been duly
taken, (3) it has satisfied all necessary Legal Requirements to
perform its obligations contemplated by this Agreement, (4) it
has duly executed and delivered this Agreement, (5) this
Agreement constitutes the legal, valid and binding obligation of
that Member enforceable against such Member in accordance with
its terms (except as may be limited by bankruptcy, insolvency or
similar Laws of general application), and (6) its authorization,
execution, delivery, and performance of this Agreement do not
conflict with its organizational documents or any other agreement
or arrangement to which that Member is a party or by which it is
bound.
(ii) BP represents and warrants to the Company,
Keystone and OSG that, as of the Effective Date, its Parent is BP
Amoco p.l.c.
(iii) Keystone represents and warrants to the
Company, BP and OSG that, as of the Effective Date, (1) its only
members are ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ and
P.W.J. ▇▇▇▇▇▇; and (2) it has no Parent.
(iv) OSG represents and warrants to the Company,
BP and Keystone that, as of the Effective Date, its Parent is
Overseas Shipholding Group, Inc.
(v) Keystone represents and warrants to the
Company, BP and OSG that Keystone is a Citizen and is qualified
under the ▇▇▇▇▇ Act to engage in the United States coastwise
trade. In the event that Keystone shall fail to qualify as a
Citizen at any time after the execution of this Agreement, it
shall notify the Company and the other Members as soon as it
obtains knowledge of such fact and shall diligently take all
steps necessary to cure such failure as promptly as possible.
(vi) OSG represents and warrants to the Company,
BP and Keystone that OSG is a Citizen and is qualified under the
▇▇▇▇▇ Act to engage in the United States coastwise trade. In the
event that OSG shall fail to qualify as a Citizen at any time
after the execution of this Agreement, it shall notify the
Company and the other Members as soon as it obtains knowledge of
such fact and shall diligently take all steps necessary to cure
such failure as promptly as possible.
(b) COVENANTS.
(i) Each Member covenants that it will not take
any action whereby the laws of the United States relating to
coastwise trading are breached or the coastwise trading
privileges of the Company are jeopardized or suspended.
(ii) BP covenants that it will engage the Company
to manage the acquisition (whether by new construction, purchase
or charter) and operation of any vessels required by BP to
transport Alaskan-produced hydrocarbons out of Alaska upon the
terms and conditions to be negotiated but with Supplemental Hire
and Incentive Hire to be determined on a similar basis with
existing vessels managed by the Company and with the same
environmental protection afforded the owners of vessels chartered
by the Company on the Closing Date under the Formation Agreement.
This covenant shall not apply, however, to the acquisition of a
vessel by means of the acquisition of, or the merger of a Member
with, or the formation of a joint venture by a Member with, any
Person or the assets of any Person unaffiliated with such Member,
when the acquired vessels represent less than 25% of the assets
(1) acquired from such Person, (2) of such Person in the case of
a merger, or (3) contributed to a joint venture by such Person,
nor to the continuance of any management arrangements in place as
of the time of such acquisition, merger or joint venture
formation.
(iii) Each Member shall cause its guarantor to
maintain in full force and effect the guaranty of its obligations
referenced below:
Keystone: Guaranty Agreements of ▇▇▇▇. ▇▇▇▇ & Co., Inc. and
Keystone Shipping Co. dated as of ▇▇▇▇▇ ▇▇, ▇▇▇▇
▇▇▇: Guaranty Agreement of Overseas Shipholding
Group, Inc. dated as of March 30, 1999
BP: Guaranty Agreement of The Standard Oil
Company dated as of March 30, 1999
A guaranty shall be considered as not being in full force and
effect if (1) the guarantor is in default thereunder, or (2) the
guarantor is the subject of an event of the type referred to in
Section 18-304 of the Act, subject to the lapsing of any period
of time therein specified.
3.03 DISPOSITIONS OF MEMBERSHIP INTERESTS.
(a) A Disposition of all of a Membership Interest may be
effected only in strict accordance with the provisions of this
SECTION 3.03. Any attempted Disposition by a Member of a
Membership Interest other than in strict accordance with this
SECTION 3.03 is void, and the Company shall not recognize it.
The Members agree that a breach of the provisions of this
SECTION 3.03 may cause irreparable injury to the Company and to
the other Members for which monetary damages (or other remedy at
law) are inadequate in view of (i) the complexities and
uncertainties in measuring the actual damages that would be
sustained by reason of the failure of a Member to comply with
such provision and (ii) the uniqueness of the Company business
and the relationship among the Members. Accordingly, the Members
agree that the provisions of this SECTION 3.03 may be enforced by
specific performance.
(b) A Member may dispose of its Membership Interest at
any time, provided that the transferee of such Membership
Interest is an Affiliate of such Member (or, in the case of
Keystone only, ▇▇▇▇. ▇▇▇▇ & Co., Inc.) and provided further that
such Disposition meets the requirements of SECTION 3.03(b)(iii),
(iv) and (v) and SECTION 3.03(g) of this Agreement. Otherwise, a
Member may not Dispose of its Membership Interest except by
complying with the following requirements:
(i) such Disposing Member must receive the prior
written consent of all the other Members to Dispose of its
Membership Interest;
(ii) the Disposing Member must comply with the
requirements of SECTION 3.03(c), (f) and (g) and, if the
transferee is to be admitted as a Member, SECTION 3.03(e);
(iii) the Disposing Member must be Disposing of its
entire Membership Interest;
(iv) the Disposition would not allow any creditor
of the Company to call, accelerate or otherwise alter the terms
or conditions of any indebtedness of the Company; and
(v) any transferee, other than of an interest
owned by BP or any Affiliate of BP, must be a Citizen.
(c) If a Member ("OFFEROR") desires to Dispose of its
Membership Interest (other than a sale or other transfer of its
Membership Interest to an Affiliate), such Disposition may be
made only for cash (or cash equivalent) and only if the Offeror
receives with respect thereto a bona fide binding written
proposal for the acquisition of such Membership Interest (the
"INTEREST") by the Person making such proposal (an "ACQUISITION
PROPOSAL"), and then only in compliance with the following
procedures:
(i) Upon receipt of an Acquisition Proposal, the
Offeror shall offer, by written notice (the "OFFER") to the other
Members (the "OFFEREES"), to sell the Interest to the Offerees or
Affiliates thereof on the terms (including price) specified in
the Acquisition Proposal pursuant to the terms of this
SECTION 3.03(c). Such Offer shall contain a description of and a
copy of the Acquisition Proposal. In addition, the Offeror shall
provide to the Offerees all other information with respect to the
Acquisition Proposal and the proposed transferee reasonably
requested by the Offerees in order for it to evaluate the
Acquisition Proposal, to verify the bona fide nature thereof and
to evaluate the effect of having the Person making such
Acquisition Proposal as a Member in the Company.
(ii) The Offerees shall have the right, to be
exercised by notice (the "ACCEPTANCE") from one or more of the
Offerees to the Offeror on or before the thirtieth (30th) day
following receipt of the Offer (the "OFFER PERIOD"), to elect to
purchase all (but not less than all) of the Interest pursuant to
the terms of the Offer.
(iii) If one or more of the Offerees accepts the
Offer, the closing of the acquisition of the Interest shall be
consummated on or before the ninetieth (90th) day after the
Offeror receives the Acceptance but effective at the end of the
calendar month occurring on or immediately prior to such closing.
The acquisition shall be consummated at a closing held at the
principal offices of the Company (unless otherwise agreed by the
purchaser of the Interest and the Offeror), at which time the
purchaser shall deliver to the Offeror the purchase price (in the
form of immediately available funds), and the Offeror shall
deliver to the purchaser such transfer documentation reasonably
acceptable to the purchaser as shall be required to evidence the
transfer of such Interest free and clear of all liens and
encumbrances, except those created under this Agreement.
(iv) Where BP wishes to accept an Offer, but BP's
ownership interest after such purchase would exceed the amount
permitted by Law for a Person which is not a Citizen, BP may
instead designate a Person which is a Citizen and which is
reasonably qualified to participate in the management of the
Company to purchase the amount in excess of the permitted
percentage. In such case, the designee shall be allowed to
accept the Offer, provided that the ownership interest purchased
by the designee shall not be subject directly or indirectly to
the Control of BP or any trust or fiduciary obligation in favor
of BP.
(v) If no Offeree accepts the Offer, the Offeror
shall be permitted for a period of 90 days after expiration of
the Offer Period to sell all (but not less than all) of the
Interest to such transferee on terms not more favorable to such
transferee than the terms specified in the Acquisition Proposal
and at a price that is not less than the price specified in the
Acquisition Proposal.
(d) A transferee of a Membership Interest has the right
to be admitted to the Company as a Member, with the Membership
Interest (and attendant Sharing Ratio) so transferred to such
transferee, only if such Disposition is effected in strict
compliance with this SECTION 3.03.
(e) The Company shall not recognize for any purpose any
purported Disposition of all or part of a Membership Interest
unless and until the other applicable provisions of this
SECTION 3.03 have been satisfied and the Member Committee has
received, on behalf of the Company, a document (i) executed by
both the Member effecting the Disposition and the Person to which
the Membership Interest is Disposed, (ii) including the notice
address of such Person and, if such Person is to be admitted to
the Company as a Member in accordance with the other provisions
of this SECTION 3.03, its agreement to be bound by this Agreement
in respect of the Membership Interest being obtained, and
(iii) containing a representation and warranty by the Disposing
Member and the Person acquiring the Membership Interest that the
Disposition was made in accordance with all applicable Laws and
regulations (including securities Laws) and, if the Person to
which the Membership Interest is Disposed is to be admitted to
the Company as a Member in accordance with the other provisions
of this SECTION 3.03, a representation and warranty by such
Person (x) identifying its Parent and (y) stating that the
representations and warranties in SECTION 3.02(a)(i) and (vi) are
true and correct with respect to that Person. Each Disposition
and, if applicable, admission complying with the provisions of
this SECTION 3.03(e) is effective as of the end of the last day
of the calendar month in which the Member Committee receives the
notification of Disposition and the other requirements of this
SECTION 3.03 have been met.
(f) For the right of a Member to Dispose of a Membership
Interest or of any Person to be admitted to the Company in
connection with such a Disposition to exist or (subject to the
other provisions of this SECTION 3.03) be exercised, either
(i) the Membership Interest subject to the Disposition or
admission must be registered under the Securities Act of 1933, as
amended, and any applicable state securities Laws or (ii) the
Disposition or admission must be exempt from registration under
those Laws.
(g) The Member effecting a Disposition and any Person
admitted to the Company in connection with that Disposition shall
pay, or reimburse the Company for, all reasonable costs incurred
by the Company in connection with the Disposition or admission on
or before the tenth day after the receipt by that Person of the
Company's invoice for the amount due. If payment is not made by
the date due, the Person owing that amount shall pay interest on
the unpaid amount from the date due until paid at a rate per
annum equal to the Default Interest Rate.
(h) No disposition of a Membership Interest shall act to
release a guarantor from a guaranty referenced in SECTION 3.02(b)
above, nor to terminate any charter, unless specified in the
terms thereof or otherwise expressly agreed by the parties to
such guaranty or charter.
(i) If the coastwise trading laws are amended so as to
reduce the percentage of the Company which BP is permitted to own
under the ▇▇▇▇▇ Act, BP shall promptly dispose of the required
percentage to a Citizen.
3.04 ENCUMBRANCES.
(a) An Encumbrance of all or any portion of a Membership
Interest may be effected only in strict accordance with the
provisions of this SECTION 3.04. Any attempted Encumbrance by a
Member of a Membership Interest other than in strict accordance
with this SECTION 3.04 is void, and the Company shall not
recognize it. The Members agree that a breach of the provisions
of this SECTION 3.04 may cause irreparable injury to the Company
and to the other Members for which monetary damages (or other
remedy at law) are inadequate in view of (i) the complexities and
uncertainties in measuring the actual damages that would be
sustained by reason of the failure of a Member to comply with
such provision and (ii) the uniqueness of the Company business
and the relationship among the Members. Accordingly, the Members
agree that the provisions of this SECTION 3.04 may be enforced by
specific performance.
(b) A Member may not Encumber its Membership Interest,
unless (i) the Member Committee consents to such Encumbrance and
(ii) the instrument creating such Encumbrance provides that any
foreclosure of such Encumbrance (or Disposition in lieu of such
foreclosure) must comply with the requirements of SECTION 3.03.
3.05 ADDITIONAL MEMBERS. Additional Persons may be admitted
to the Company as Members and Membership Interests may be created
and issued to those Persons and to existing Members on such terms
and conditions as may be approved by the unanimous consent of the
Member Committee at the time of admission. The terms of
admission or issuance must specify the Sharing Ratios applicable
to the new Membership Interests and may provide for the creation
of different classes or groups of Members and having different
rights, powers, and duties. The Members shall reflect the
creation of any new class or group in an amendment to this
Agreement indicating the different rights, powers, and duties.
Any such admission also must comply with the provisions of
SECTION 3.03(f)(i) and (ii) and is effective only after the new
Member has executed and delivered to the Member Committee the
document called for by SECTION 3.03(f).
3.06 CHANGE OF MEMBER CONTROL.
(a) A Change of Member Control shall be deemed to be a
Disposition of a Membership Interest and may be consummated only
after compliance with the requirements of SECTIONS 3.03(a), (b),
(c), (g) and (h); provided, however, that if the transaction
giving rise to the Change of Member Control involves the sale of
assets which substantially exceed the value of the Membership
Interest, then in lieu of the provisions of SECTION 3.03(c),
prior to effecting such Change of Member Control, the Member
undergoing a Change of Member Control (the "OFFERING MEMBER")
shall offer, by written notice (a "CONTROL OFFER") to the other
Members (the "OFFEREE MEMBERS"), to sell its Membership Interest
to the Offeree Members for a purchase price determined in
accordance with this paragraph ("FAIR MARKET VALUE"). The
Offeree Members shall have the right, to be exercised by notice
(the "CONTROL ACCEPTANCE") from one or both of the Offeree
Members to the Offering Member on or before the sixtieth (60th)
day following receipt of the Offer (the "CONTROL OFFER PERIOD"),
to elect to purchase the Membership Interest of the Offering
Member. The Control Acceptance shall be accompanied by the
Offeree Member's written designation of three (3) appraisal firms
recognized in the United States for purposes of a third-party
appraisal if required as contemplated below. If one or both of
the Offeree Members timely accepts the Control Offer, the
Offeree Member(s) and the Offering Member shall consult for the
purpose of determining the Fair Market Value of the Membership
Interest.
(b) The Offering Member shall comply with the provisions
of this SECTION 3.06.
(c) If on or before the thirtieth (30th) day after the
receipt of the Control Acceptance, such Members have not reached
agreement on the Fair Market Value of the Membership Interest,
each of the Offeree Members and the Offering Member shall submit
a proposed Fair Market Value to the appraisal firm selected by
the Offering Member from the list of appraisal firms accompanying
the Control Acceptance, together with any supporting
documentation such Member deems appropriate. Such appraisal firm
shall determine the Fair Market Value by selection of one of the
proposed Fair Market Values submitted by the Members (and shall
have no authority beyond selection of one of such proposals) as
promptly as possible (and in any event on or before the thirtieth
(30th) day after submittal of the competing proposals). One-half
of the cost of such appraisal shall be paid by the Offering
Member and one-half shall be paid by the Offeree Member(s).
(d) Each such Member shall provide to the other and, if
applicable, the appraisal firm, all information reasonably
requested by them, including (in the case of the Offering Member)
information regarding the transaction giving rise to the Change
of Member Control and any consideration being paid in connection
therewith.
(e) The closing of the acquisition of the Membership
Interest shall be consummated on or before the sixtieth (60th)
day after the determination of the Fair Market Value of the
Membership Interest but effective at the end of the calendar
month occurring on or immediately prior to such closing. The
acquisition shall be consummated at a closing held at the
principal offices of the Company (unless otherwise agreed by the
Offering Member and the purchaser), at which time the purchaser
shall deliver to the Offering Member the purchase price (in the
form of immediately available funds), and the Offering Member
shall deliver to the purchaser such transfer documentation
reasonably acceptable to the purchaser as shall be required to
evidence the transfer of such Membership Interest, free and clear
of all liens and encumbrances, except those created under this
Agreement.
(f) If the Offeree Member(s) do not accept the Control
Offer within the time and in the manner provided above, the
Offering Member shall be permitted for a period of ninety (90)
days after expiration of the Control Offer Period to consummate
the Change of Member Control.
(g) If more than one Offeree Member wishes to purchase
the Membership Interest, the provisions of SECTION 3.03(c) shall
apply.
ARTICLE IV.
CAPITAL CONTRIBUTIONS
4.01 INITIAL CONTRIBUTIONS. Each Member shall cause to be
made the Capital Contributions, if any, provided for in the
Formation Agreement at the times and in the manner specified
therein. In addition, each Member shall make a Capital
Contribution of cash in the following amounts:
BP $25,000
Keystone $37,500
OSG $37,500
4.02 SUBSEQUENT CONTRIBUTIONS. No Member shall be required or
permitted to make any Capital Contributions or loans to the
Company except pursuant to this ARTICLE IV or as unanimously
approved by the Member Committee.
4.03 [Intentionally Omitted]
4.04 ADVANCES BY MEMBERS. Each Member shall extend to the
Company a line of credit for a period of ninety (90) days after
the signing of this Agreement by all parties, as follows:
BP $225,000
Keystone $337,500
OSG $337,500
Such lines of credit shall be evidenced by a separate promissory
note between the Company and each Member which shall include the
following provisions: (i) the promissory notes shall bear
interest on the outstanding principal balance at the prime rate
of interest as reported by Chase Manhattan Bank, N.A., or its
successor; (ii) the promissory notes shall provide that, at any
time the Company desires to draw upon any such lines of credit,
the Company shall draw upon each line of credit in accordance
with each Member's Sharing Ratios; and (iii) if the Company does
not draw upon such lines of credit during the above-referenced
ninety (90) day period, such lines of credit shall terminate. In
the event such lines of credit are insufficient to allow the
Company to pay its obligations during such ninety (90) day period
or at any time after the termination of such lines of credit, the
Member Committee shall promptly meet to determine the proper
course of action.
4.05 RETURN OF CONTRIBUTIONS. No Member shall be entitled to
the return of any part of its Capital Contribution or to be paid
interest in respect of either its Capital Account or any Capital
Contribution made by such Member. No unrepaid Capital
Contribution shall be deemed or considered to be a liability of
the Company or any Member. No Member shall be required to
contribute or lend any cash or property to the Company to enable
the Company to return any Member's Capital Contributions to the
Member.
4.06 CAPITAL ACCOUNTS.
(a) A Capital Account shall be established and
maintained for each Member. Each Member's Capital Account
(i) shall be increased by (A) the amount of money contributed by
that Member to the Company, (B) the fair market value of any
property contributed by that Member to the Company (net of
liabilities secured by the contributed property that the
Company is considered to assume or take subject to under
section 752 of the Code), and (C) allocations to that Member
of Company income and gain (or items of income and gain),
including income and gain exempt from tax and income and gain
described in Treas. Reg. Section 1.704-1(b)(2)(iv)(g), but
excluding income and gain described in Treas. Reg.
Section 1.704-1(b)(4)(i), and shall be decreased by (i) the
amount of money distributed to that Member by the Company,
(ii) the fair market value of property distributed to that
Member by the Company (net of liabilities secured by the
distributed property that the Member is considered to assume or
take subject to under section 752 of the Code), (iii) allocations
to that Member of expenditures of the Company described in
section 705(a)(2)(B) of the Code, and (iv) allocations of Company
loss and deduction (or items of loss and deduction), including
loss and deduction described in Treas. Reg. Section
1.704-1(b)(2)(iv)(g), but excluding items described in clause
(b)(iii) above and loss or deduction described in Treas. Reg.
Section 1.704-1(b)(4)(i) or Section 1.704-1(b)(4)(iii). The
Members' Capital Accounts also shall be maintained and
adjusted as permitted by the provisions of Treas. Reg.
Section 1.704-1(b)(2)(iv)(f) and as required by the other
provisions of Treas. Reg. Section 1.704-1(b)(2)(iv) and
1.704-1(b)(4), including adjustments to reflect the allocations
to the Members of depreciation, depletion, amortization, and gain
or loss as computed for book purposes rather than the allocation
of the corresponding items as computed for tax purposes, as
required by Treas. Reg. Section 1.704-1(b)(2)(iv)(g). On the
transfer of all or part of a Membership Interest, the Capital
Account of the transferor that is attributable to the transferred
Membership Interest shall carry over to the transferee Member in
accordance with the provisions of Treas. Reg.
Section 1.704-1(b)(2)(iv)(l).
(b) Capital Accounts shall be adjusted, in a manner
consistent with this SECTION 4.06, to reflect any adjustments in
items of the Company's income, gain, loss or deduction that
result from amended returns filed by the Company or pursuant to a
binding agreement by the Company with the Internal Revenue
Service or a final court decision.
(c) The Members agree that the Capital Account balances
of the Members attributable to the initial capital contributions
shall be in the Sharing Ratios.
ARTICLE V.
ALLOCATIONS AND DISTRIBUTIONS
5.01 ALLOCATIONS FOR CAPITAL ACCOUNT AND TAX PURPOSES.
(a) For purposes of maintaining the Capital Accounts,
and except as provided in SECTION 5.01(b) and (c) or as otherwise
required by the U.S. Treasury Regulations under section 704(b) of
the Code (including any requirements that must be met under such
regulations to ensure that allocations of income, gain, loss,
deduction and credit have 'economic effect', as that term is used
in Treas. Reg. Section 1.704-1(b)(2)(ii)), all items of income,
gain, loss, deduction and credit for each taxable year shall be
allocated among the Members in accordance with their Sharing
Ratios in effect at the time the item is accrued or incurred.
(b) Depreciation, cost recovery and other deductions
attributable to the capital contributions of the Members shall
be allocated to the Member making such capital contribution.
(c) For income tax purposes, income, gain, loss, and
deduction with respect to property contributed to the Company by
a Member or revalued pursuant to Treas. Reg. Section
1.704-1(b)(2)(iv)(f) shall be allocated among the Members in a
manner that takes into account the variation between the
adjusted tax basis of such property and its book value, as
required by section 704(c) of the Code and Treas. Reg.
Section 1.704-1(b)(4)(i), using a method permitted by Treas. Reg.
Section 1.704-3 as determined by the Member Committee.
(d) All items of income, gain, loss, deduction and
credit, allocable to any Membership Interest that may have been
transferred during a calendar year shall be allocated between the
transferor and the transferee in the manner agreed by the
transferor and the transferee; provided, however, that this
allocation must be made in accordance with a method permissible
under section 706 of the Code and the regulations thereunder.
5.02 DISTRIBUTIONS.
(a) All distributions by the Company to the Members
shall be made in such aggregate amounts and at such times as
shall be determined by the Member Committee in proportion to
their respective Sharing Ratios in effect at the time the amounts
of such distributions are determined.
(b) If any Member does not withdraw the whole or any
part of its share of any cash distribution made pursuant to this
SECTION 5.02, such Member shall not be entitled to receive any
interest thereon without the express written consent of the other
Members.
(c) Unless otherwise agreed in writing by a transferor
and transferee of a Membership Interest herein, distributable
cash with respect to any Membership Interest which may have been
transferred during any year shall be distributed to the holder of
such Membership Interest who was recognized as the owner on the
date of such distribution, without regard to the results of
Company operations during the year.
(d) Incentive Charter Hire (as such term is defined in
the Time Charters which are exhibits to the Formation Agreement)
received by the Company shall be distributed forthwith to the
Members.
ARTICLE VI.
MANAGEMENT AND OPERATION
6.01 MANAGEMENT OF COMPANY AFFAIRS. The management of the
Company is vested in the Member Committee. To facilitate the
orderly and efficient management of the Company, the Members
shall act through the Member Committee and may delegate certain
responsibility and authority to managers selected by the Member
Committee.
6.02 MEMBER COMMITTEE. Decisions or actions taken by the
Member Committee in accordance with the provisions of this
Agreement shall constitute decisions or actions by the Company
and shall be binding on each Member of the Company. The Member
Committee shall conduct its affairs in accordance with the
following provisions and the other provisions of this Agreement:
(a) ORGANIZATION OF MEMBER COMMITTEE.
(i) The Member Committee shall be composed of
three (3) representatives.
(ii) Each Member shall appoint one (1) individual
to represent it on the Member Committee (individually, such
Member's "REPRESENTATIVE"). No individual may serve as the
Representative of more than one Member. Each Member shall also
appoint two (2) or more individuals ("ALTERNATE REPRESENTATIVES")
with the power of substitution and authority to act in place of
its Representative in case of the unavailability thereof. Each
Representative and Alternate Representative shall be an officer
or agent of the Member appointing him or her and shall be duly
authorized to act on behalf of and to bind the appointing Member.
Each Member reserves the right to remove any one or more of its
Representatives or Alternate Representatives, as the case may be,
and to appoint successors and substitutes therefor, from time to
time, and any such change shall be effective upon such Member's
delivering a written notice of such change to the other Member.
(iii) All Representatives and Alternate
Representatives appointed by Keystone and OSG must be Citizens.
Representatives and Alternate Representatives appointed by BP
need not be Citizens.
(iv) Each Representative appointed by Keystone and
OSG shall have one and one half (1-1/2) votes each, and each
Representative appointed by BP shall have one (1) vote each.
(v) Any action of the Member Committee shall
require two and one-half (2-1/2) affirmative votes, except for
Unanimous Consent Matters, which shall require four (4)
affirmative votes, cast in each case at a meeting held in
accordance with SECTION 6.02(d) below.
(vi) To expedite the handling of Company business,
it is understood and agreed that any document executed by a
Representative or any Alternate Representative of each Member
shall, as to any third parties, be deemed to be the action of the
Member appointing such Representative or Alternate
Representative. Further, any Person dealing with the Company may
rely upon a certificate signed by a Representative or any
Alternate Representative of all Members as to:
(A) the identity of the Members, their
Representatives and Alternate Representatives;
(B) the existence or nonexistence of any
fact or facts that constitute conditions precedent to acts by the
Company or are in any other manner related to the affairs of the
Company;
(C) the Persons who are authorized to
execute and deliver any instrument or document of the Company;
(D) any act or failure to act by the Company
or the Members' Member Committee; or
(E) any other matter whatsoever involving
the Company or the Members' Member Committee.
(b) MANAGEMENT POWERS OF THE MEMBER COMMITTEE. The
Member Committee shall have the full, exclusive and absolute
right, power and authority to manage and control the Company.
The Member Committee shall have all of the rights, powers and
authority conferred upon it by law or under the other provisions
of this Agreement.
(c) MATTERS REQUIRING MEMBER COMMITTEE CONSENT.
Notwithstanding any other provision of this Agreement or the
Management Agreement, the following actions require the consent
of the Member Committee:
(i) the annual Business Plan and any amendments
to the Approved Business Plan;
(ii) the incurrence of, or commitment to incur,
any capital cost for any project (including but not limited to
capacity expansions) that exceeds Two Hundred Fifty Thousand
Dollars ($250,000) to the extent not covered by the Approved
Business Plan or that would cause the Company to exceed its
annual capital budget as reflected on the Approved Business Plan;
(iii) the sale or divestiture of any asset of
the Company having a fair market value in excess of Two Hundred
Fifty Thousand Dollars ($250,000), to the extent not covered in
the Approved Business Plan;
(iv) material contracts and agreements covering
amounts in excess of Two Hundred Fifty Thousand Dollars
($250,000) or for a term in excess of twelve (12) months, and
amendments thereof, to the extent these matters are not covered
by the Approved Business Plan;
(v) borrowings or issuances of debt securities
(excluding trade credits and advances under working capital
funding facilities) of the Company, to the extent these matters
are not covered in the Approved Business Plan;
(vi) issuances by the Company of any new
Membership Interests;
(vii) entering into or amending contracts between
the Company and any Member or its Affiliates;
(viii) the filing or settlement of any lawsuit
involving a claim or settlement payment of more than Two Hundred
Fifty Thousand Dollars ($250,000);
(ix) the execution or amendment in a material
respect of any time or demise charter;
(x) the designation, appointment and dismissal of
the chief executive officer and any other senior managers;
(xi) any deviation from the Core Business
Principles.
(d) MEETINGS OF THE MEMBER COMMITTEE.
(i) Regular meetings of the Member Committee
shall be held periodically, but no less frequently than
quarterly, on such dates, at such times and at such locations as
the Members shall from time to time determine, taking into
account the convenience of all parties. The individual then
serving as the president/chief executive officer of the Company
or any Representative or Alternate Representative may call a
special meeting of the Member Committee. Notice of any special
meeting shall include a statement of the matters proposed to be
considered at such meeting and shall be given to all participants
by the Person calling the meeting at least two Business Days
prior to the meeting, although shorter notice of a meeting may be
given if the Members agree. All notices of Member Committee
meetings shall be given either in writing, or by telephone if
immediately followed by written confirmation. Each Member agrees
to use reasonable efforts to cause at least one of its
Representative or an Alternate Representative to participate, in
the manner provided for herein, in all Member Committee meetings.
(ii) Representatives and Alternate Representatives
may participate in any Member Committee meeting by means of
telephone conference call or similar communications equipment so
long as all Persons participating in the meeting can hear each
other simultaneously. If required, the Member Committee may act
without a meeting by written consent.
(iii) No meeting shall be held unless a quorum
is present at such meeting. A quorum of the Member Committee
shall require the presence of a Representative (or an Alternate
Representative) from each Member. No Member Committee meeting
may be held without the presence of at least one Representative
or Alternate Representative of each Member. The willful failure
of a Member to send a Representative or Alternative
Representative to a duly called Member Committee meeting for the
purpose of preventing a quorum shall be deemed a breach of this
Agreement.
(iv) Each member shall have the right to have an
additional person attend meetings of the Member Committee along
with the Representative or Alternative Representative
representing such Member. Such additional person shall not have
voting rights.
(e) The Member Committee shall designate an individual
or individuals, each of whom shall be a Citizen, to act as Chief
Executive Officer or President, if any, of the Company. Any
individual who may act in the absence or disability of the Chief
Executive Officer or President must be a Citizen. The Member
Committee may from time to time designate one or more other
Persons having such duties and authority as the Member Committee
may deem advisable, subject to the powers reserved under SECTION
6.02(c) to the Member Committee. If any such Person in any way
controls or otherwise directs the operations of the vessels owned
or managed by the Company, such individual or individuals shall
be Citizens.
6.03 COMPENSATION. The Member Committee is not entitled to
compensation for its services. Each Representative and Alternate
Representative shall be reimbursed by their respective Member for
out-of-pocket costs and expenses incurred in serving on the
Member Committee.
6.04 EXCULPATION. Neither the Member Committee, the
Members, their respective Affiliates, nor any owner, officer,
director, partner, employee or agent of the Members or their
respective Affiliates, shall be liable, responsible or
accountable in damages or otherwise to the Company or any Member
for any action taken or failure to act (even if such action or
failure to act constituted the negligence of a Person) on behalf
of the Company within the scope of the authority conferred on the
Person described in this Agreement or by Law unless such act or
omission was performed or omitted fraudulently or constituted
gross negligence or willful misconduct. To the extent that, at
law or in equity, the Member Committee, the Members, their
respective Affiliates, or any owner, officer, director, partner,
employee or agent thereof have duties (including fiduciary
duties) and liabilities relating to the Company or to another
Member, the Member Committee, the Members, their respective
Affiliates, or any owner, officer, director, partner, employee or
agent thereof acting under the Agreement shall not be liable to
the Company or to any other Member or its Affiliates for their
reliance on the provisions of this Agreement. The provisions of
this Agreement, to the extent that they expand or restrict the
duties and liabilities of the Member Committee, the Members,
their respective Affiliates, or any owner, officer, director,
partner, employee or agent thereof otherwise existing at law or
in equity, are agreed by the Members to replace such other duties
and liabilities of the Member Committee, the Members, their
respective Affiliates, or any owner, officer, director, partner,
employee or agent thereof.
6.05 INDEMNIFICATION.
(a) To the fullest extent permitted by law, the Member
Committee, the Members, their respective Affiliates and their
respective officers, directors, partners, employees and agents or
any Person performing a similar function (individually, an
"INDEMNITEE") shall be indemnified and held harmless by the
Company from and against any and all losses, claims, damages,
judgments, liabilities, obligations, penalties, settlements and
reasonable expenses (including legal fees) arising from any and
all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative, in which the
Indemnitee may be involved, or threatened to be involved, as a
party or otherwise, by reason of its status as (x) a Member of
the Member Committee, a Member or an Affiliate thereof, or (y) an
officer, director, partner, employee or agent of a Member or an
Affiliate thereof, regardless of whether the Indemnitee continues
to be a Member of the Member Committee, a Member or an Affiliate
thereof or an officer, director, employee or agent of a Member or
an Affiliate thereof at the time any such liability or expense is
paid or incurred, unless the act or failure to act giving rise to
indemnity hereunder was performed or omitted fraudulently or
constituted gross negligence or willful misconduct.
(b) The Company shall purchase and maintain insurance
in such amount as the Member Committee agrees on behalf of the
Member Committee and such other Persons as the Member Committee
shall determine against any liability that may be asserted
against or expense that may be incurred by such Person in
connection with the Company's activities, regardless of whether
the Company would have the power to indemnify such Person against
such liability under the provisions of this Agreement.
(c) Expenses incurred by any Indemnitee in defending
any claim with respect to which such Indemnitee may be entitled
to indemnification by the Company hereunder (including without
limitation reasonable attorneys' fees and disbursements) shall,
to the maximum extent permitted by law, be advanced by the
Company prior to the final disposition of such claim, upon
receipt of a written undertaking by or on behalf of such
Indemnitee to repay the advanced amount of such expenses unless
it is determined ultimately that the Indemnitee is entitled to
indemnification by the Company under SECTION 6.5(a).
(d) The indemnification provided in this SECTION 6.5
is for the benefit of the Indemnitees and shall not be deemed to
create any right to indemnification for any other Persons.
6.06 FIDUCIARY DUTY. Each Representative and Alternate
Representative shall have a duty of good faith and care to the
Company. The Members shall deal with each other in good faith
with respect to the affairs of the Company.
ARTICLE VII.
INFORMATION AND CONFIDENTIALITY
7.01 INFORMATION. Subject to SECTION 7.02, each Member and
its agents and representatives shall have the right from time to
time during the regular business hours of the Company to inspect,
review and copy all contracts and all financial, credit and other
information relating to the business of the Company, provided
that such inspection, review or copying will not interfere
unreasonably with the conduct of the business of the Company. In
addition to the other rights set forth in this Agreement, each
Member is entitled to all information to which that Member is
entitled to have access under applicable Law.
7.02 CONFIDENTIALITY. The Members acknowledge that, from
time to time, they may receive information from or regarding the
Company, the use or release of which may be damaging to the
Company or Persons with which it does business. Each Member
shall hold in strict confidence and not use (except in connection
with the business at the Company) any information it receives
regarding the Company and its customers and may not disclose it
to any Person other than another Member, except for disclosures
(a) compelled by applicable Law (but the Member must notify the
Member Committee promptly of any request for that information,
before disclosing it if practicable), (b) to advisers or
representatives of the Member or Persons to which that Member's
Membership Interest may be or may be proposed to be, Disposed or
Encumbered as permitted by this Agreement, but only if the
recipients have agreed to be bound by the provisions of this
SECTION 7.02, or (c) of information that Member also has received
from a source independent of the Company that the Member
reasonably believes obtained that information without breach of
any obligation of confidentiality. The Members acknowledge that
breach of the provisions of this SECTION 7.02 may cause
irreparable injury to the Company for which monetary damages are
inadequate, difficult to compute, or both. Accordingly, the
Members agree that the provisions of this SECTION 7.02 may be
enforced by specific performance.
ARTICLE VIII.
TAXES
8.01 TAX RETURNS. The tax matters member, as defined in
SECTION 8.03, shall cause to be prepared and filed all necessary
federal and state income tax returns for the Company, including
making the elections described in SECTION 8.02. Each Member
shall furnish to the tax matters member all pertinent information
in its possession relating to Company operations that is
necessary to enable the Company's income tax returns to be
prepared and filed. The Company shall provide each Member with a
copy of the Company's federal income tax return ("Return") and
supporting work papers, including, but not limited to, Form 1065
and the Member's respective Schedule K-1 and schedule of book-tax
adjustments, no later than August 1st of the year following the
year for which results are reported. Each Member shall review
the Return and provide comments, if any, to the Company or its
designee not later than the following June 15th.
8.02 TAX ELECTIONS. The Company shall make the following
elections on the appropriate tax returns:
(a) to adopt the calendar year as the Company's fiscal
year;
(b) to adopt the accrual method of accounting and to
keep the Company's books and records on the accrual method:
(c) if a distribution of Company property as described
in section 734 of the Code occurs or if a transfer of a
Membership Interest as described in section 743 of the Code
occurs, on request by notice from any Member, to elect, pursuant
to section 754 of the Code, to adjust the basis of Company
properties;
(d) to elect to amortize the organizational expenses
of the Company under section 709(b) of the Code and the startup
expenditures of the Company under section 195 of the Code, in
each case ratably over the shortest period permitted by
applicable Law;
(e) to elect under section 6231 of the Code to be
subject to the TEFRA rules; and
(f) any other election that is in the best interests
of the Members.
8.03 TAX MATTERS MEMBER. BP shall be the "tax matters
partner" of the Company pursuant to section 6231(a)(7) of the
Code. BP shall take such available action as may be necessary to
cause each other Member to become a "notice partner" within the
meaning of section 6223 of the Code. BP shall provide notice to
all Members before extending the statute of limitations for
federal income purposes. BP shall inform each other Member of
all significant matters that may come to its attention in its
capacity as tax matters partner (including all notifications of
audit proceedings and copies of revenue agents' reports) by
giving notice on or before the tenth Business Day after becoming
aware of the matter and, within that time, shall forward to each
other Member copies of all significant written communications it
may receive in that capacity. BP may not take any action
contemplated by sections 6222 through 6233 of the Code without
the consent of the other Member, but this sentence does not
authorize the Member Committee to take, or preclude the Member
Committee from taking on its own behalf (and not as tax matters
partner), any action left to the determination of an individual
Member under sections 6222 through 6233 of the Code.
ARTICLE IX.
BOOKS, RECORDS, REPORTS, AND BANK ACCOUNTS
9.01 MAINTENANCE OF BOOKS AND RECORDS. Records and books of
account (including those required by the Act) shall be kept by
the Company in which shall be entered all transactions and other
matters relative to the Company's business as are usually entered
into records and books of account maintained by persons engaged
in business of like character. The books and records shall at
all times be made available and shall be open to the reasonable
inspection and examination of the Members or their duly
authorized representatives during the regular business hours of
the Company for any purpose reasonably related to the interest of
such Member as a Member in the Company, provided that such
inspection and examination will not interfere unreasonably with
the conduct of the business of the Company.
9.02 REPORTS.
(a) With respect to each calendar year, the Company
shall prepare and deliver to each Member:
(i) As soon as practical (but no later than forty-
five (45) days) after the end of such calendar year, a balance
sheet, profit and loss statement and statement of cash flows for
such year, together with a report thereon of independent public
accountants selected by the Member Committee; and
(ii) Such federal, state and local income tax
returns and supporting workpapers, including Form 1065 and the
Member's respective Schedule K-1 and schedule of book-tax
adjustments, and such other accounting, tax information and
schedules on or before February 1st following the end of each
calendar year as shall be necessary for the preparation by each
Member of its income tax return with respect to such year.
(b) As soon as practical (but no later than thirty
(30) days) after the end of each calendar month, the Company
shall cause to be prepared and delivered to each Member:
(i) A profit and loss statement and a statement
of cash flows for such month and such other supplemental
information as is necessary to permit the Members to calculate
their tax accruals, for the portion of the calendar year then
ended; and
(ii) A balance sheet as of the end of such
month and the portion of the calendar year then ended.
9.03 ACCOUNTS. The Company shall establish and maintain one
or more separate bank and investment accounts and arrangements
for Company funds in the Company name with financial institutions
and firms that the Member Committee determines. The Company's
funds shall not be commingled with the funds of any Member.
ARTICLE X.
RESIGNATION, BANKRUPTCY, ETC.
10.01 RESIGNATION. Each Member agrees that it will not
resign, retire or withdraw from the Company as a Member, other
than as permitted by SECTION 11.04.
10.02 MEMBERSHIP INTEREST.
(a) If any Member ceases to be a Member other than in
connection with the Disposition of all that Member's Membership
Interest and the admission of the transferee as a Member as
permitted by SECTION 3.03, or remains a Member after becoming a
Bankrupt Member (the "AFFECTED MEMBER"), the Company shall have
the option, exercisable by written notice from the other Member
to the Affected Member at any time prior to the one hundred
eightieth (180th) day after receipt of notice of the occurrence
of the event causing it to become an Affected Member, to buy (or
to designate another Person to buy), and on the exercise of this
option the Affected Member shall sell, its Membership Interest as
provided herein.
(b) The purchase price shall be an amount equal to the
Fair Market Value of the Membership Interest determined by
agreement by the Affected Member and the other Member, taking
into account any sums owed to the Affected Member by the Company
or by the Affected Member to the Company; however, if those
Persons do not agree on the Fair Market Value on or before the
30th day following the exercise of the option, then the other
Member shall, by written notice to the Affected Member on or
before the fifth day after the expiration of such 30-day period,
initiate the determination of Fair Market Value by an independent
appraiser. Such notice shall designate three appraisal firms
recognized in the United States. The Affected Member shall
select by written notice to the other Member one of such
appraisal firms within 20 days after receipt of such notice.
Each of the Affected Member and the other Member shall submit a
proposed Fair Market Value to the appraisal firm, together with
any supporting documentation it deems appropriate, within 30 days
after selection of the appraisal firm. The appraisal firm shall
determine the Fair Market Value by selection of one of the
proposed Fair Market Values submitted (and shall have no
authority beyond selection of one of such proposals) as promptly
as possible (and in any event on or before the 30th day after
submittal of the competing proposals). The Affected Member and
the other Member each shall pay one-half of the costs of the
appraisal. The closing of the acquisition of the Membership
Interest contemplated hereunder shall be consummated at a closing
held at the principal offices of the Company on or before the
sixtieth (60th) day after the determination of the Fair Market
Value of the Membership Interest but effective at the end of the
calendar month occurring on or immediately prior to such closing.
The purchaser shall pay the Fair Market Value as so determined in
two equal cash installments, the first due on closing and the
remainder (together with accumulated interest on the amount
unpaid at the Prime Interest Rate) due on the first anniversary
of the closing. At the closing, the Affected Member shall
deliver to the Company or its designee such transfer
documentation reasonably acceptable to the Company or such
designee as shall be required to evidence the transfer of such
Membership Interest, free and clear of all liens and
encumbrances, except those created under this Agreement.
(c) The payment to be made to the Affected Member
under this SECTION 10.02 is in complete liquidation and
satisfaction of all the rights and interest of the Affected
Member (and of all Persons claiming by, through, or under the
Affected Member) in and in respect of the Company, including any
Membership Interest, any rights in specific Company property, and
any rights against the Company and (insofar as the affairs of the
Company are concerned) against the Members, and constitutes a
compromise to which all Members have agreed.
(d) If an event requiring a winding up of the Company
occurs before the purchase price for the Company is determined
under SECTION 10.02(b), then the purchase and sale shall not
occur. Instead, the Affected Member or its successor shall be
entitled to receive in the liquidation of the Company the same
amount that Person would have received had the Affected Member
continued to be a Member or not become a Bankrupt Member.
ARTICLE XI.
DISSOLUTION, LIQUIDATION, AND TERMINATION
11.01 DISSOLUTION. The Company shall dissolve and its
business and affairs shall be wound up on the first to occur of
the following:
(a) the Closing does not occur by the time limit
specified in the Formation Agreement;
(b) the unanimous written consent of the Members;
(c) the retirement, resignation, expulsion or
bankruptcy of any Member or the occurrence of any other event
that terminates the continued membership of a Member in the
Company, unless the business of the Company is continued by the
consent of all the remaining Members within 90 days following the
occurrence of such event; or
(d) the entry of a decree of judicial dissolution
under Section 18-802 of the Act.
11.02 LIQUIDATION AND TERMINATION.
(a) On dissolution of the Company, the Member
Committee (or, if any Member is an Affected Member, the other
Members) shall act as liquidator or may appoint one or more other
Persons as liquidator. The liquidator shall proceed diligently
to wind up the affairs of the Company and make final
distributions as provided in this Agreement. The costs of
liquidation shall be borne as a Company expense. Until final
distribution, the liquidator shall continue to operate the
Company properties with all of the power and authority of the
Members and the Member Committee. The steps to be accomplished
by the liquidator are as follows:
(i) as promptly as practicable after dissolution
and again after final liquidation, the liquidator shall cause a
proper accounting to be made by a recognized firm of certified
public accountants of the Company's assets, liabilities, and
operations through the last day of the calendar month in which
the dissolution occurs or the final liquidation is completed, as
applicable;
(ii) the liquidator shall pay from Company funds
all of the debts and liabilities of the Company (including all
expenses incurred in liquidation and any advances described in
SECTION 4.04) or otherwise make adequate provision for them
(including the establishment of a cash escrow fund for contingent
liabilities in such amount and for such term as the liquidator
may reasonably determine);
(iii) Subject to the provisions of
SECTION 11.02(b) and (c) of this Agreement, if applicable, the
liquidator shall sell all Company property to any Person
including Members or their Affiliates; and
(iv) all remaining assets of the Company shall be
distributed to the Members in accordance with, and to the extent
of, the positive balances in their respective Capital Accounts,
as determined after taking into account all Capital Account
adjustments, including adjustments reflecting any revaluation of
Company property pursuant to SECTION 4.06(a) and any other
adjustments (other than those reflecting the distributions made
by reason of this SECTION 11.02(a)) for the taxable year of the
Company during which the liquidation of the Company occurs. If
after the distribution of all remaining assets of the Company a
Member has a deficit balance in its Capital Account, as
determined after taking into account all Capital Account
adjustments (other than those reflecting the distributions made
by reason of the SECTION 11.02(a)), such Member shall have the
unconditional obligation to restore the amount of such deficit to
the Company by the end of (i) the taxable year in which the
Company is liquidated or (ii) ninety (90) days after the date on
which the Company is liquidated, whichever date is later. Any
amounts received by the Company from a Member in restoration of
its deficit Capital Account shall, upon liquidation of the
Company, be paid to creditors of the Company or distributed to
the other Members of the Company in accordance with their
positive Capital Account balances.
(v) The distributions to a Member in accordance
with the provisions of this SECTION 11.02 constitutes a complete
return to the Member of its capital and a complete distribution
to the Member of its Membership Interest and all the Company's
property and constitutes a compromise to which all Members have
consented. To the extent that a Member returns funds to the
Company, it has no claim against any other Member for those
funds.
(b) Upon termination of the Company pursuant to the
terms of this Agreement, the Parties will agree upon the
continuation or termination of existing contractual obligations.
(c) The provisions of this SECTION 11.02 shall apply
to voluntary termination in accordance with SECTION 11.04, except
to the extent expressly modified in SECTION 11.04.
11.03 TERMINATION. On completion of the distribution of
Company assets as provided in this Agreement, the Company is
terminated, and the Member Committee (or such other Person or
Persons as the Act may require or permit) shall cause the
cancellation of the Certificate and any filings made as provided
in SECTION 2.05 and shall take such other actions as may be
necessary to terminate the Company.
11.04 WITHDRAWAL OF BP. BP may withdraw as a Member
from the Company without cause upon at least one hundred twenty
(120) days prior notice to the other Members. The withdrawal of
BP will not affect the time charters with BP and the associated
guarantees or other contractual relationship then in place. The
exclusivity provisions of Section 3.02(b)(ii) shall survive the
withdrawal of BP for as long as: (i) any of the Time Charters
entered into by the Company and BP on the Closing Date (as such
terms are defined in the Formation Agreement) remain in effect;
and (ii) the Company is in compliance with the terms of its Time
Charters with BP and no notice of termination has been sent
pursuant to, or an action to terminate is proceeding, under
Article XV(A)(5) of any Time Charter; and (iii) the Company is
not insolvent or the subject of any bankruptcy proceeding.
ARTICLE XII.
GENERAL PROVISIONS
12.01 OFFSET. Whenever the Company is to pay any sum to
any Member, any amounts that Member owes the Company may be
deducted from that sum before payment.
12.02 NOTICES. All notices or other communications
required or permitted to be given under this Agreement shall be
sufficiently given for all purposes hereunder if in writing and
personally delivered, delivered by recognized courier service
(such as Federal Express) or certified United States mail, return
receipt requested, or sent by facsimile communication to the
appropriate address or number as set forth below. Notices and
other communications shall be effective upon receipt by the
Person to be notified. The address for notices and other
communications to a Member is the address given for that Member
in Schedule A, or such other address as that Member may specify
by notice to the other Members. Any notice or other
communication to the Company must be given to the Member
Committee.
12.03 ENTIRE AGREEMENT; SUPERSEDURE. This Agreement,
the Formation Agreement and the other agreements contemplated in
the Formation Agreement set forth the entire understanding and
agreement of the Members and their Affiliates relating to the
Company and supersede and replace any prior understanding,
agreement or statement. The headings herein are for convenience
only and shall have no significance in the interpretation hereof.
12.04 EFFECT OF WAIVER OR CONSENT. A waiver or consent,
express or implied, to or of any breach or default by any Person
in the performance by that Person of its obligations with respect
to the Company is not a consent or waiver to or of any other
breach or default in the performance by that Person of the same
or any other obligations of that Person with respect to the
Company. Failure on the part of a Person to complain of any act
of any Person or to declare any Person in default with respect to
the Company, irrespective of how long that failure continues,
does not constitute a waiver by that Person of its rights with
respect to that default until the applicable statute-of-
limitations period has run.
12.05 AMENDMENT OR MODIFICATION. This Agreement may be
amended or modified from time to time only by a written
instrument executed by all of the Members.
12.06 BINDING EFFECT. Subject to the restrictions on
Dispositions set forth in this Agreement, this Agreement is
binding on the Members and their respective heirs, legal
representatives, successors, and assigns and inures to the
benefit of their respective heirs, legal representatives,
successors and permitted assigns.
12.07 GOVERNING LAW; SEVERABILITY; LITIGATION. This
Agreement shall be construed in accordance with, and governed by,
the laws of the State of Delaware without giving effect to any
choice or conflict of law provision or rule (whether of the State
of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State
of Delaware. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
12.08 DISPUTE RESOLUTION.
(a) In the event litigation is initiated by any Member
relating to matters arising from this Agreement, the prevailing
party, after the entry of a final nonappealable order, shall be
entitled to recover from the nonprevailing party or parties, as a
part of said order, all court costs, fees and expenses of such
litigation, including reasonable attorneys' fees.
(b) If any controversy, issue, claim or dispute
(collectively, "Dispute") arises out of or relates to this
Agreement, the Members shall endeavor to promptly resolve the
Dispute. In the event the Members fail to resolve the Dispute
within thirty (30) days of its arising, and unless all Members
agree in writing to extend the time limits, then the Members
shall make a good faith attempt to settle the Dispute by non-
binding mediation before resorting to litigation or any other
dispute resolution procedure. Unless the Members agree
otherwise, one mediation session shall be conducted in accordance
with the CPR Institute for Dispute Resolution Model Procedure for
Mediation of Business Disputes by a qualified mediator. Within
thirty (30) days after the mediator has been selected the Members
and their respective attorneys shall meet with the mediator for
one mediation session, it being agreed that each Member
representative attending such mediation session shall have
authority to settle the Dispute. If the Dispute cannot be
settled at such mediation session or at any mutually agreed
continuation of such mediation session, but in any event within
forty-five (45) days of the original notice of dispute, then any
Member can declare the mediation process at an end upon written
notice to the other Members, in which event the Dispute shall
then be resolved by litigation, as provided for elsewhere in this
Agreement, or any other dispute resolution procedure. The cost
of the mediation shall be shared equally among the parties to the
Dispute.
(c) If there are any court proceedings arising out of
or relating to this Agreement or the transactions contemplated
hereby, such proceedings shall be brought and tried exclusively
in the state court of competent jurisdiction, or the United
States District Court, situated in Wilmington, Delaware. Each
of the Members, and the Company, hereby agrees and submits to the
exclusive jurisdiction of such court for the purpose of any legal
action, suit or other proceeding (other than arbitration as
provided for in section 12.08(b) arising out of this Agreement
and irrevocably waives to the full extent permitted by law, and
agrees not to assert, any claim that venue is not proper with
respect to any such matter brought in such court, including any
claim that such suit, action or proceeding has been brought in an
inconvenient forum, that its property is exempt or immune from
attachment or execution, that venue of the action, suit or
proceeding is improper, that this Agreement or the subject matter
hereof may not be enforced in or by such court, or that it is not
subject to personal jurisdiction or service of process in such
Delaware forum. Each of the Members, and the Company, hereby
consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address
in effect under this Agreement and agrees that such service shall
constitute good and sufficient service against such party if
given by registered or certified mail, return receipt requested,
or by any other means of mail which requires a signed receipt,
postage prepaid, mailed to the address of such party in effect
under the notice provisions of this Agreement. Nothing herein
shall be deemed to affect or limit any right of any Party to
serve process in any other matter permitted by law. THE PARTIES
HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHTS TO DEMAND A TRIAL BY
JURY.
12.09 FURTHER ASSURANCES. In connection with this
Agreement and the transactions contemplated by it, each Member
shall execute and deliver such documents, and take such other
action, as shall be reasonably requested by another Member to
effectuate and perform the provisions of this Agreement and those
transactions.
12.10 COUNTERPARTS. This Agreement may be executed in
any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute a single
instrument.
ARTICLE XIII.
APPROVAL BY THE MARITIME ADMINISTRATION
13.01 AFFIDAVIT OF CITIZENSHIP. Prior to becoming a new
Member or Transferee (pursuant to Section 3.03) any U.S. citizen
entity shall provide an affidavit of citizenship satisfactory to
MARAD.
13.02 MARAD APPROVAL. The following actions shall be
subject to approval by MARAD:
(a) Any merger or consolidation of the Company
pursuant to Section 2.07.
(b) Any change in Articles III (Members; Membership
Interests), V (Allocations and Distributions), VI (Management and
Operation), X (Resignation, Bankruptcy, etc.) and XI
(Dissolution, Liquidation, and Termination).
(c) Any change in Schedule A, Members and Sharing
Ratios, to add a Member not a U.S. citizen entity or to increase
the percentage of Sharing Ratio for non-citizen entities.
(d) Any change in Schedule B, Unanimous Consent.
13.03 MODIFICATION. Section 12.05 is modified to add at
the end thereof, "subject to the approval of MARAD as required by
Article XIII."
13.04 This Article XIII is effective only for so long as
any U.S. government financing guarantees relating to the TONSINA
and the KENAI are outstanding.
EXECUTED as of the Effective Date.
BP OIL SHIPPING COMPANY USA, INC.
By: s/▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice-President
KEYSTONE ALASKA, LLC
By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
OSG SHIP MANAGEMENT, INC.
By: s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice-President
SCHEDULE A
MEMBERS AND SHARING RATIOS
NAME AND ADDRESS OF MEMBER SHARING RATIO
-------------------------- -------------
BP Oil Shipping Company USA, Inc. 25%
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇, Vice-President
Keystone Alaska, LLC 37.5%
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, President
OSG Ship Management, Inc. 37.5%
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Executive Vice-President
SCHEDULE B
UNANIMOUS CONSENT MATTERS
Adoption of an Annual Budget
Approval of Capital Contributions
Incurrence of debt by the Company in excess of $250,000
Acquisition or disposal of major assets
Investment by the Company in another legal entity
Formation of a joint venture by the Company
Granting of guarantees by the Company
Change principal place of business of the Company
Entry by the Company into contracts exceeding $250,000