OPTION AGREEMENT
OPTION
AGREEMENT,
dated
as of July 2, 2008 (this “Agreement”),
between ENERGY INFRASTRUCTURE MERGER CORPORATION, a corporation incorporated
and
existing under the laws of the Republic of The Xxxxxxxx Islands (the
“Buyer”),
and
SHINYO KIERAN LIMITED,
a
company incorporated
and existing under the laws of the British Virgin Islands (the
“Seller”).
Capitalized terms used but not defined herein shall have the meaning assigned
such terms in the Second Amended and Restated Share Purchase Agreement (as
defined below).
WHEREAS:
1. Pursuant
to and subject to the conditions contained in the Second Amended and Restated
Share Purchase Agreement dated as of July 2, 2008 (the “Second
Amended and Restated Share Purchase Agreement”)
among
(i) Vanship Holdings Limited (“Vanship”),
(ii)
Energy Infrastrucure Acquisition Corp. (“EIAC”)
and
(iii) the Buyer, Vanship, the Buyer and EIAC agreed, upon the terms and
conditions stated therein, to effect the Sale and Purchase described
therein.
2. The
Seller is a wholly-owned subsidiary of Vanship.
3. Pursuant
to a Shipbuilding Contract dated March 28, 2006 (as novated on April 8, 2008,
the “Shipbuilding
Contract”)
between Dalian Shipbuilding Industry Co. Ltd. (the “Shipyard”)
and
the Seller, the Shipyard has agreed to build for the Seller one 298,000 dwt
crude oil tanker, hull number T3000-36 (the “Option
Vessel”).
4. Pursuant
to Article VII of the Shipbuilding Contract the Shipyard has agreed to deliver
the Option Vessel on or before June 30, 2011 (as the same may be adjusted in
accordance with the terms of the Shipbuilding Contract, the “Delivery
Date”)
5. In
connection with the Sale and Purchase, the Second Amended and Restated Share
Purchase Agreement provides that the Seller shall grant the Buyer an option
to
purchase the Seller’s ownership interest in the Option Vessel, subject to and
with the benefit of any charter of such Option Vessel, such option to be
effective until 5:00 p.m. New York City time on the date which is 90 days before
the Delivery Date.
6. Upon
the
terms and conditions stated in a Shelltime 4 Time Charter Party dated April
10,
2008 (the “Charter”),
the
Seller has agreed to time charter the Option Vessel to Dalian Ocean Shipping
Co.
Ltd.
NOW,
THEREFORE, in
consideration of the premises and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Seller hereby agrees with the Buyer as follows:
SECTION
1. Grant
of Option.
The
Seller hereby grants to the Buyer and the Buyer hereby accepts an option
to
purchase the Seller’s ownership interest in the Option Vessel, subject to and
with the benefit of the Charter.
SECTION
2. Exercise
of
Option.
The
Buyer may exercise the Option at anytime from
the
date of this Agreement until
5:00 p.m. New York City time on the date which is 90 days before the Delivery
Date by giving written notice to the Seller of such exercise (the date the
Seller sends such written notice being the “Exercise
Date”)
and
within 10 Business Days (or such longer period as the Seller and the Buyer
may
agree) of the Exercise Date paying to such account as the Seller shall direct,
in immediately available U.S. dollars without any set-off or deduction for
any
reason, an amount in U.S. dollars equal to the greater of (as of the Exercise
Date):
(a) the
Seller’s proportionate interest in the aggregate of the charter-free fair market
value of the Option Vessel plus any premium fairly attributable to the Charter
as
agreed
between the Buyer and the Seller or in default of agreement as determined by
the
average of two (2) valuations made on such basis by internationally recognized
ship brokers mutually acceptable to the Buyer and the Seller;
(b) the
value
of the Seller’s interest in the Option Vessel as reflected in the financial
statements of the Seller (taking into account all sums expended in respect
of
the Option Vessel and allowing interest on such sums at LIBOR); and
(c) the
amount of any bona fide Third Party offer for such Option Vessel.
SECTION
3. Delivery
of Option Vessel to Buyer; Warranty Rights.
Provided that the Buyer has exercised the Option and paid to the Seller all
amounts due under and in conformity with the terms and conditions of Section
2
hereof, the Seller shall cause the Option Vessel to be delivered to the Buyer
or
its nominated subsidiary on the date that the Seller takes delivery of the
Option Vessel from the Shipyard. In addition, the Seller shall assign to the
Buyer all post-delivery warranty rights under the Shipbuilding Contract and
shall use reasonable commercial efforts to cause the Shipyard to agree to such
assignment of warranty rights.
SECTION
4. No
Prejudice.
Notwithstanding any provision of this Agreement or any provision in Second
Amended and Restated Share Purchase Agreement, the Option granted by the Seller
to the Buyer by this Agreement is without prejudice to the right of the Seller
to sell the Option Vessel to any Third Party and at any price prior to the
exercise of the Option by the Buyer, provided
that
the
Seller shall have first offered the Buyer the right to acquire the Option Vessel
on substantially identical terms as have been offered by such Third Party to
the
Seller for the acquisition of the Option Vessel and, the Buyer has either
declined to proceed with such opportunity within not more than three (3)
Business Days of the date the Seller has offered such opportunity to the Buyer,
or has failed to respond to such offer within such time.
SECTION
5. Representations
and Warranties.
(a) The
Seller hereby represents and warrants to the Buyer that:
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(i)
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as
of the date hereof the Shipbuilding Contract is valid and in full
force
and effect;
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(ii)
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as
of the date hereof there has been no default by the Seller or, to
the
Seller’s knowledge, by the Shipyard under the terms of the Shipbuilding
Contract;
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(iii)
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as
of the date hereof, to the Seller’s knowledge, there is/are no pending
dispute(s) or arbitration proceedings arising out of or in connection
with
the Shipbuilding Contract;
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(iv)
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there
is nothing in the Shipbuilding Contract that prohibits or prevents
the
Seller from granting the Option to the Buyer and the
Seller has
not granted any option in respect of the Option Vessel to anyone
other
than the Buyer;
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(v)
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the
Seller is a corporation duly organized and validly existing under
the laws
of the British Virgin Islands and has full power, authority and legal
right to grant the Option pursuant to, and to otherwise perform its
obligations under, this Agreement;
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(vi)
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this
Agreement has been duly authorized, executed and delivered by the
Seller
and constitutes a legal, valid and binding obligation of the Seller
enforceable in accordance with its terms, except to the extent that
the
enforceability hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting
creditors’ rights and by equitable principles regardless of whether
enforcement is sought in equity or at
law;
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(vii)
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no
consent of any other party and no consent, license, permit, approval
or
authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required
to be
obtained by the Seller in connection with (A) the execution, delivery
or
performance of this Agreement or (B) the validity or enforceability
of
this Agreement;
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(viii)
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the
execution, delivery and performance of this Agreement will not violate
any
provision of (A) any applicable state, federal or foreign law or
regulation or any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, applicable
to
the Seller, (B) the organizational documents of the Seller, or (C)
any
mortgage, indenture, lease, loan agreement, credit agreement or other
material contract, agreement or instrument or undertaking to which
the
Seller is a party or which purports to be binding upon the Seller
or upon
any of its assets, and will not result in the creation or imposition
of
(or the obligation to create or impose) any lien or encumbrance on
any of
the assets of the Seller except as contemplated by this Agreement;
and
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(ix)
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there
is no tax, levy, impost, deduction, charge or withholding imposed
by the
British Virgin Islands or any political subdivision or taxing authority
thereof on or by virtue of the execution, delivery or performance
of this
Agreement or any other document to be furnished hereunder by the
Seller.
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(b) The
Buyer
hereby represents and warrants to the Seller that:
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(i)
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the
Buyer is a corporation duly organized and validly existing under
the laws
of the Republic of The Xxxxxxxx Islands and has full power, authority
and
legal right to perform its obligations under, this
Agreement;
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(ii)
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this
Agreement has been duly authorized, executed and delivered by the
Buyer
and constitutes a legal, valid and binding obligation of the Buyer
enforceable in accordance with its terms, except to the extent that
the
enforceability hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws generally affecting
creditors’ rights and by equitable principles regardless of whether
enforcement is sought in equity or at
law;
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(iii)
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no
consent of any other party and no consent, license, permit, approval
or
authorization of, exemption by, notice or report to, or registration,
filing or declaration with, any governmental authority is required
to be
obtained by the Buyer in connection with (A) the execution, delivery
or
performance of this Agreement or (B) the validity or enforceability
of
this Agreement;
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(iv)
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the
execution, delivery and performance of this Agreement will not violate
any
provision of (A) any applicable state, federal or foreign law or
regulation or any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, applicable
to
the Buyer, (B) the organizational documents of the Buyer, or (C)
any
mortgage, indenture, lease, loan agreement, credit agreement or other
material contract, agreement or instrument or undertaking to which
the
Buyer is a party or which purports to be binding upon the Buyer or
upon
any of its assets, and will not result in the creation or imposition
of
(or the obligation to create or impose) any lien or encumbrance on
any of
the assets of the Buyer except as contemplated by this Agreement;
and
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(v)
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there
is no tax, levy, impost, deduction, charge or withholding imposed
by the
Republic
of The Xxxxxxxx Islands or
any political subdivision or taxing authority thereof either (A)
on or by
virtue of the execution, delivery or performance of this Agreement
or any
other document to be furnished hereunder or (B) on any payment to
be made
by the Buyer pursuant to this
Agreement.
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SECTION
6. Seller
to Remain Liable.
The
Seller shall at all times remain fully liable under the Shipbuilding Contract
to
perform all of the duties and obligations assumed by it thereunder to the same
extent as if this Agreement had not been executed, and the Buyer shall have
no
obligation or liability under the Shipbuilding Contract by reason of or arising
out of this Agreement nor shall the Buyer be required or obligated in any manner
to perform or fulfill any of the duties or obligations of the Seller under
or
pursuant to Shipbuilding Contract or to make any payment under Shipbuilding
Contract, provided
that
upon
delivery of the Option Vessel to the Buyer and the
Seller’s assignment to the Buyer of all post-delivery warranty rights under the
Shipbuilding Contract, the Seller shall have no further duty or obligation
under
the Shipbuilding Contract or the Charter, and the Buyer hereby covenants and
undertakes to indemnify the Seller against all costs, expenses or liabilities
of
any nature incurred by the Seller in respect of any such duties or obligations
or otherwise under the Shipbuilding Contract or the Charter as at and from
the
Exercise Date, and the Buyer shall promptly enter into a novation agreement
in
respect of the Charter in such form as the Seller may reasonably
require.
SECTION
7. No
Other Options.
The
Seller hereby covenants that, without the prior written consent thereto of
the
Seller, so long as this Agreement shall remain in effect, it will not grant
the
whole or any part of the rights hereby granted in respect of the Option to
anyone other than the Buyer.
SECTION
8. Termination.
The
Option granted hereunder by the Seller to the Buyer shall terminate and be
extinguished without liability of any nature on the part of the Seller upon
the
earlier of (a) the termination of the Second Amended and Restated Share Purchase
Agreement, (b) the failure of the Buyer to exercise its rights under and as
permitted by either Section 2 or Section 4 hereof, (c) the total loss of the
Option Vessel or the termination of the Shipbuilding Contract prior to the
Delivery Date and (d) the failure of the Shipyard to deliver the Option Vessel
for any reason.
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SECTION
9. Notices.
All
notices provided hereunder shall be given in writing and either delivered
personally or by courier service or by facsimile transmission,
if
to the
Buyer, to:
c/o
V&P Law Firm
15,
Filikis Xxxxxxx Xx.,
000
00
Xxxxxx,
Xxxxxx
Attention:
Xxxx Xxxxxxxxxx, Esq.
Fax
No:
00 000 000 0000
if
to the
Seller to:
SHINYO
[SAOWALAK / KIERAN] LIMITED
c/o
Univan Ship Management Limited
Xxxxx
000
Xxxxx Xxxxx
0
Xxxxxxxx Xxxx, Xxxxxxx
Xxxx
Xxxx
Attention:
Captain C.A.J. Vanderperre
Fax
No:
(x000) 0000 0000
or
to
such other address as the parties shall from time to time designate in writing.
Any notice delivered personally or by fax shall be deemed given upon receipt
(with confirmation of receipt required in the case of fax transmissions); any
notice given by overnight courier shall be deemed given on the third Business
Day after delivery to the overnight courier.
SECTION
10. Governing
Law.
This
Agreement shall be governed by and construed under the laws of the State of
New
York without
regard to conflicts of laws principles.
SECTION
11. Arbitration.
Any
controversy or claim arising out of or in conjunction with this Agreement shall
be settled by arbitration in accordance with the Commercial Rules of the
American Arbitration Association then in effect in the State of New York and
judgment upon such award rendered by the arbitrator shall be final and binding
upon the parties and may be entered and enforced in any court having
jurisdiction thereof. The arbitration shall be held in the State of New York,
New York County or such other location as is mutually agreed in
writing before
a
panel of three (3) arbitrators, one selected by Seller, one selected by the
Buyer, and the third by the two (2) so chosen. The arbitration award shall
include attorneys’ fees and costs to the prevailing party.
SECTION
12. Headings.
Headings
used herein are for convenience only and shall not in any way affect the
construction of, or be taken into consideration in interpreting, this
Agreement.
SECTION
13. Severability.
Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.
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SECTION
14. Amendments
in Writing.
No
amendment, modification, waiver, termination or discharge of any provision
of
this Agreement, or any consent to any departure by either the Seller or the
Buyer from any provision hereof, shall in any event be effective unless the
same
shall be in writing and signed by the parties hereto, and each such amendment,
modification, waiver, termination or discharge shall be effective only in the
specific instance and for the specific purpose for which given. No provision
of
this Agreement shall be varied, contradicted or explained by any oral agreement,
course of dealing or performance or any other matter not set forth in an
agreement in writing and signed by the parties hereto.
SECTION
15. Execution
in Counterparts.
This
Agreement and any amendment, waiver or consent hereto may be executed by the
parties hereto in separate counterparts (or upon separate signature pages bound
together into one or more counterparts), each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute one and the same instrument. All such counterparts may be delivered
among the parties hereto by facsimile or other electronic transmission, which
shall not affect the validity thereof.
SECTION
16. Entire
Agreement.
This
Agreement and the other documents referred to herein or therein, on and as
of
the date hereof, constitute the entire agreement of the parties hereto with
respect to the subject matter hereof or thereof, and all prior understandings
or
agreements, whether written or oral between the parties hereto with respect
to
such subject matter are hereby superseded in their entirety.
SECTION
17. Successors
and Assigns.
This
Agreement shall be binding upon, shall inure to the benefit of and shall be
enforceable by the parties hereto and their respective successors and permitted
assigns; provided, that the Buyer may not assign any of its rights or
obligations hereunder without the prior written consent of the Seller, which
consent may be withheld arbitrarily.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective officers thereunto duly authorized as of the day and date
first
above written.
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By:
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Name:
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Title:
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SHINYO
KIERAN LIMITED
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By:
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Name:
Captain C.A.J. Vanderperre
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Title:
Director
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