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...
Exhibit
4.15
AMENDED
AND RESTATED
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.
21785-0030/LEGAL11774635.3
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.
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.
“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.
“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 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 ▇▇▇▇▇▇▇
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 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.
“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.
“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.
“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.
“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 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 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;
(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.
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
(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 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.
(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
(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 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.
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. 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 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, 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 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,
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]
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 Strategy 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:
(▇▇▇) ▇▇▇-▇▇▇▇
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:
(▇▇▇) ▇▇▇-▇▇▇▇
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:
(▇▇▇) ▇▇▇-▇▇▇▇
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
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:
(▇▇▇) ▇▇▇-▇▇▇▇