Exhibit 1.1
FORM OF UNDERWRITING AGREEMENT
Teekay Offshore Partners L.P.
7,000,000 Common Units
Representing Limited Partner Interests
Underwriting Agreement
New York, New York
December __, 2006
Citigroup Global Markets Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Teekay Offshore Partners L.P., a limited partnership organized under
the laws of the Xxxxxxxx Islands (the "Partnership"), proposes to issue and sell
(the "Offering") to the several underwriters named in Schedule I hereto (the
"Underwriters"), for whom you (the "Representatives") are acting as
representatives, 7,000,000 Common Units (the "Firm Units"), each representing a
limited partner interest in the Partnership (the "Common Units"). The
Partnership also proposes to grant to the Underwriters an option to purchase up
to 1,050,000 additional Common Units (the "Option Units") to cover
over-allotments. The Firm Units and the Option Units are hereinafter
collectively called the "Units"). To the extent there are no additional
Underwriters listed on Schedule I other than you, the term Representatives as
used herein shall mean you, as Underwriters, and the terms Representatives and
Underwriters shall mean either the singular or plural as the context requires.
Certain terms used herein are defined in Section 21 hereof.
As part of the offering contemplated by this Agreement, Citigroup
Global Markets Inc. has agreed to reserve out of the Units set forth opposite
its name on Schedule I to this Agreement, up to 700,000 Common Units, for sale
to parties associated with the Partnership (collectively, "Participants"), as
set forth in the Prospectus under the heading "Underwriting" (the "Directed Unit
Program"). The Common Units to be sold by Citigroup Global Markets Inc. pursuant
to the Directed Unit Program (the "Directed Units") will be sold by Citigroup
Global Markets Inc. pursuant to this Agreement at the public offering price. Any
Directed Units not orally confirmed for purchase by any Participants by 8:00 AM
New York City time on the business day following the date on which this
Agreement is executed will be offered to the public by Citigroup Global Markets
Inc. as set forth in the Prospectus.
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It is understood and agreed to by all parties that the Partnership was
formed by Teekay Shipping Corporation, a Xxxxxxxx Islands corporation ("TSC"),
to acquire an interest in the Operating Company (as defined below), which will
own and operate substantially all of TSC's assets and operations in the offshore
oil sector (comprised of shuttle tankers and floating storage and offloading
units and certain rights with respect to floating production, storage and
offtake units) and certain of its assets and operations in the crude oil
shipping sector (collectively, the "Contributed Business"), as described more
particularly in the Prospectus. It is further understood and agreed by all
parties that as of the date hereof:
(a) TSC directly owns a 100% membership interest in Teekay Offshore GP
L.L.C., a Xxxxxxxx Islands limited liability company (the "General Partner"), a
98% limited partner interest in the Partnership and, after giving effect to the
Transactions (as defined below), a 74% limited partner interest in Teekay
Offshore Operating L.P., a Xxxxxxxx Islands limited partnership (the "Operating
Company");
(b) after giving effect to the Transactions, the Partnership will own,
directly, a 100% membership interest in Teekay Offshore Operating GP L.L.C., a
Xxxxxxxx Islands limited liability company (the "OLP GP") and a 25.99% limited
partner interest in the Operating Company;
(c) after giving effect to the Transactions, the OLP GP will own a
0.01% general partner interest in the Operating Company;
(d) the Operating Company directly owns:
(1) after giving effect to the Transactions, a 100% membership
interest in Pattani Spirit LLC, a Xxxxxxxx Islands limited liability
company ("Pattani Spirit");
(2) after giving effect to the Transactions, 100% of outstanding
stock of Teekay Nordic Holdings Inc., a Xxxxxxxx Islands corporation
("Nordic Holdings");
(3) after giving effect to the Transactions, a 100% interest in
Teekay Offshore Australia Trust, an Australian trust ("Karratha
Spirit");
(4) 100% of the outstanding stock of Norsk Teekay Holdings Ltd.,
a Xxxxxxxx Islands corporation ("Norsk Holdings"); and
(5) after giving effect to the Transactions, 100% of the common
stock of Teekay Navion Offshore Loading Pte. Ltd., a Singapore
corporation ("Teekay Navion") which represents approximately 15% of
the value of the outstanding stock of Teekay Navion;
(e) Nordic Holdings directly owns:
(1) a 100% membership interest in Nordic Apollo LLC, a Xxxxxxxx
Islands limited liability company ("Nordic Apollo");
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(2) a 50% membership interest in P/R Xxxxx Xxxxxx Shuttle Tankers
III, a Norwegian shipping partnership regulated under the Marine Act
of 0000 (Xxxxxx) ("Xxxxx Xxxxxx III");
(3) a 50% membership interest in Stena Spirit LLC, an Isle of Man
limited liability company; and
(4) a 50% membership interests in Nordic Rio LLC, a Xxxxxxxx
Islands limited liability company;
(f) Nordic Apollo owns an 89% membership interest KS Nordic Apollo, a
Norwegian limited partnership ("KS Nordic Apollo");
(g) Norsk Holdings directly owns 100% of the outstanding stock of
Teekay European Holdings S.a.r.l., a Luxembourg corporation ("Luxco"), which
directly owns 100% of the outstanding stock of Teekay Netherlands European
Holdings B.V., a Dutch corporation ("Dutchco"), which directly owns 100% of the
outstanding stock of Norsk Teekay AS, a Norwegian corporation ("Norsk Teekay"),
which directly owns 100% of the outstanding stock of Teekay Norway AS, a
Norwegian corporation ("Teekay Norway");
(h) Teekay Norway directly owns:
(1) 100% of the outstanding stock of Navion Offshore Loading AS,
a Norwegian corporation ("Navion Offshore"); and
(2) 100% of the outstanding stock of Xxxxxx Nordic Shipping AS, a
Norwegian corporation ("Xxxxxx Nordic");
(i) Xxxxxx Nordic directly owns:
(1) a 50% interest in P/R Xxxxx Xxxxxx Shuttle Tankers II DA, a
Norwegian shipping partnership regulated under the Marine Act of 0000
(Xxxxxx) ("Xxxxx Xxxxxx XX"); and
(2) a 50% interest in P/R Xxxxx Xxxxxx Shuttle Tankers I DA, a
Norwegian shipping partnership regulated under the Marine Act of 0000
(Xxxxxx) ("Xxxxx Xxxxxx I", and collectively with Pattani Spirit,
Nordic Holdings, Karratha Spirit, Norsk Holdings, Nordic Apollo, Xxxxx
Xxxxxx III, Stena Spirit LLC, Nordic Rio LLC, Luxco, Dutchco, Norsk
Teekay, Teekay Norway, Navion Offshore, Xxxxxx Nordic, Xxxxx Xxxxxx XX
and Teekay Navion, the "Operating Subsidiaries");
(j) Navion Offshore directly owns 100% of the outstanding preferred
stock of Teekay Navion, representing approximately 85% of the value of the
outstanding stock of Teekay Navion.
(k) The transactions effected by the Contribution, Conveyance and
Assumption Agreement (the "Contribution Agreement") to be dated the Closing Date
(as defined
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in Section 3 hereof) among the Teekay Parties (as defined below) and the
conveyances of Pattani Spirit, Nordic Holdings, Karratha Spirit and the common
stock of Teekay Navion, as described above, will have occurred at or prior to
the Closing Date (such transactions are collectively referred to as the
"Transactions"). In connection with the Transactions, the parties to the
Transactions entered into various transfer agreements, bills of sale,
assignments, conveyances, contribution agreements and related documents
(collectively, and together with the Contribution Agreement the "Contribution
Documents").
(l) The General Partner, the Partnership, the OLP GP, the Operating
Company and the Operating Subsidiaries are hereinafter referred to collectively
as the "Partnership Entities." TSC, the General Partner, the Partnership, the
OLP GP and the Operating Company are hereinafter referred to collectively as the
"Teekay Parties" and, together with the Operating Subsidiaries, the "Teekay
Entities."
(m) TSC intends to form a Xxxxxxxx Islands limited liability company
as a wholly-owned subsidiary named "Teekay Offshore Holdings L.L.C." ("MLP
Holdco") to which it will transfer all of its direct ownership interests in the
General Partner, the Partnership and the Operating Company. If, prior to the
Closing Date, TSC forms MLP Holdco and transfers to it such interest in the
General Partner, MLP Holdco shall be considered a Teekay Party hereunder and TSC
shall be deemed to represent and warrant to the Underwriters that it owns 100%
of the membership interest in MLP Holdco free of all Liens other than those set
forth on Schedule IV and MLP Holdco shall be deemed to replace TSC for the
purpose of all representations, warranties and agreements relating to the
ownership by TSC of the General Partner, the Partnership and the Operating
Company.
(n) This is to confirm the agreement among the Teekay Parties and the
Underwriters concerning the purchase of the Firm Units and the Option Units from
the Partnership by the Underwriters.
1. Representations, Warranties and Agreements of the Teekay Parties.
Each of the Teekay Parties, jointly and severally, represents and warrants to,
and agrees with, each Underwriter that:
(a) Registration. The Partnership has prepared and filed with the
Commission a registration statement (file number 333-139116) on Form F-1,
including a related preliminary prospectus, for registration under the Act
of the offering and sale of the Units. Such Registration Statement,
including any amendments thereto filed prior to the Execution Time, has
become effective. The Partnership may have filed one or more amendments
thereto, including a related preliminary prospectus, each of which has
previously been furnished to you. The Partnership will file with the
Commission a final prospectus in accordance with Rule 424(b). As filed,
such final prospectus shall contain all information required by the Act and
the rules thereunder and, except to the extent the Representatives shall
agree in writing to a modification, shall be in all substantive respects in
the form furnished to you prior to the Execution Time or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the
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Partnership has advised you, prior to the Execution Time, will be included
or made therein.
(b) No Material Misstatements or Omissions in Registration Statement
and Prospectus. On the Effective Date, the Registration Statement did, and
when the Prospectus is first filed in accordance with Rule 424(b) and on
the Closing Date (as defined herein) and on any date on which Option Units
are purchased hereunder, if such date is not the Closing Date (an "Option
Closing Date"), the Prospectus (and any supplement(s) thereto) will, comply
in all material respects with the applicable requirements of the Act and
the rules thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not and will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and on the date of any filing pursuant to Rule 424(b) and on
the Closing Date and any Option Closing Date, the Prospectus (together with
any supplement thereto) will not include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and the statements made or to be made in such
documents that are covered by Rule 175(b) under the Act were made or will
be made with a reasonable basis and in good faith; provided, however, that
the Teekay Parties make no representations or warranties as to the
information contained in or omitted from the Registration Statement or the
Prospectus (or any supplement thereto) in reliance upon and in conformity
with information furnished in writing to the Partnership by or on behalf of
any Underwriter through the Representatives specifically for inclusion in
the Registration Statement or the Prospectus (or any supplement thereto),
it being understood and agreed that the only such information furnished by
any Underwriter consists of the information described as such in Section
8(d) hereof.
(c) No Material Misstatements or Omissions in Disclosure Package. (i)
As of the Execution Time, the Disclosure Package and the price to the
public, the number of Firm Units and the number of Option Units to be
included on the cover page of the Prospectus, when taken together as a
whole and (ii) each Issuer Free Writing Prospectus when taken together as a
whole with the Disclosure Package and the price to the public, the number
of Firm Units and the number of Option Units to be included on the cover
page of the Prospectus, did not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements
in or omissions from the Disclosure Package based upon and in conformity
with written information furnished to the Partnership by any Underwriter
through the Representatives specifically for use therein, it being
understood and agreed that the only such information furnished by or on
behalf of any Underwriter consists of the information described as such in
Section 8(d) hereof.
(d) No Ineligible Issuer. (i) At the time of filing the Registration
Statement and (ii) as of the Execution Time (with such time being used as
the determination date for purposes of this clause (ii)), the Partnership
was not and is not an Ineligible Issuer (as defined in Rule 405), without
taking account of any determination by the Commission
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pursuant to Rule 405 that it is not necessary that the Partnership be
considered an Ineligible Issuer.
(e) No Material Misstatements or Omissions in Issuer Free Writing
Prospectuses. Each Issuer Free Writing Prospectus does not include any
information that conflicts with the information contained in the
Registration Statement, including any document incorporated by reference
therein that has not been superseded or modified. The foregoing sentence
does not apply to statements in or omissions from any Issuer Free Writing
Prospectus based upon and in conformity with written information furnished
to the Partnership by any Underwriter through the Representatives
specifically for use therein, it being understood and agreed that the only
such information furnished by or on behalf of any Underwriter consists of
the information described as such in Section 8(d) hereof.
(f) Formation and Qualification. Each of the Teekay Entities has been
duly formed or incorporated and is validly existing as a limited
partnership, limited liability company or corporation, as the case may be,
in good standing under the laws of its respective jurisdiction of formation
or incorporation, and is, or at each Closing Date (as defined in Section 3
hereof) will be, duly registered or qualified to do business and is, or at
each Closing Date will be, in good standing as a foreign limited liability
company, limited partnership or corporation, as the case may be, in each
jurisdiction in which its ownership or lease of property or the conduct of
its businesses requires such registration or qualification, except where
the failure so to register or qualify would not (i) reasonably be expected
to have a Material Adverse Effect or (ii) subject the limited partners of
the Partnership to any material liability or disability. "Material Adverse
Effect," as used throughout this Agreement, means a material adverse effect
on the condition (financial or otherwise), results of operations, business,
properties, assets or prospects of the Partnership Entities, taken as a
whole, except as set forth in or contemplated in the Disclosure Package and
the Prospectus (exclusive of any supplement thereto). Each of the
Partnership Entities has all limited liability company, limited partnership
or corporate, as the case may be, power and authority necessary to own or
lease its properties currently owned or leased or to be owned or leased at
each Closing Date, to assume the liabilities assumed or being assumed by it
pursuant to the Contribution Documents and to conduct its business as
currently conducted and as to be conducted at each Closing Date, in each
case in all material respects as described in the Registration Statement,
the Disclosure Package and the Prospectus.
(g) Ownership of General Partner Interest in the Partnership. At the
Closing Date and any Option Closing Date, after giving effect to the
Transactions, the General Partner will be the sole general partner of the
Partnership with a 2.0% general partner interest in the Partnership; such
general partner interest will be duly authorized and validly issued in
accordance with the partnership agreement of the Partnership (as the same
may be amended and restated on or prior to the Closing Date or any Option
Closing Date, the "Partnership Agreement"); and the General Partner will
own such general partner interest free and clear of all pledges, liens,
encumbrances, security interests, charges, equities or other claims
(collectively, "Liens") (except restrictions on
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transferability contained in the Partnership Agreement, as described in the
Disclosure Package and the Prospectus, or under applicable securities
laws).
(h) Ownership of the Sponsor Units and Incentive Distribution Rights
in the Partnership. At the Closing Date and the Option Closing Date, after
giving effect to the Transactions, TSC will directly own 2,800,000 Common
Units and 9,800,000 Subordinated Units (all such Common and Subordinated
Units being collectively referred to herein as the "Sponsor Units"); and
the General Partner will own 100% of the Incentive Distribution Rights (as
defined in the Partnership Agreement) (the "Incentive Distribution
Rights"). All of such Sponsor Units and Incentive Distribution Rights and
the limited partner interests represented thereby will be duly authorized
and validly issued in accordance with the Partnership Agreement, and will
be fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as described in the Disclosure Package and the
Prospectus under the caption "The Partnership Agreement - Limited
Liability"); and TSC and the General Partner will own the Sponsor Units and
the Incentive Distribution Rights, respectively, free and clear of all
Liens (except restrictions on transferability contained in the Partnership
Agreement, as described in the Disclosure Package and the Prospectus or
under applicable securities laws).
(i) Valid Issuance of the Units. At the Closing Date or the Option
Closing Date, the Firm Units and the Option Units, as the case may be, and
the limited partner interests represented thereby will be duly authorized
by the Partnership Agreement and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid (to the extent required under the
Partnership Agreement) and nonassessable (except as described in the
Disclosure Package and the Prospectus under the caption "The Partnership
Agreement - Limited Liability"); and, other than the Sponsor Units and the
Incentive Distribution Rights, the Units will be the only limited partner
interests of the Partnership issued and outstanding at the Closing Date or
the Option Closing Date, other than any awards made to outside directors
under the Partnership's 2006 Long-Term Incentive Plan, up to an aggregate
of 2,800 Units.
(j) Ownership of the General Partner. At the Closing Date and the
Option Closing Date, after giving effect to the Transactions: TSC will
directly own a 100% membership interest in the General Partner; such
membership interests will be duly authorized and validly issued and will be
fully paid (to the extent required under the limited liability company
agreement of the General Partner (as the same may be amended and restated
at or prior to the Closing Date or the Option Closing Date, the "General
Partner LLC Agreement")) and nonassessable (except as such nonassessability
may be affected by Section 51 of the Xxxxxxxx Islands Limited Liability
Company Act); and TSC will own such membership interests free and clear of
all Liens.
(k) Ownership of OLP GP. At the Closing Date and the Option Closing
Date, after giving effect to the Transactions, the Partnership will own a
100% membership interest in OLP GP; such membership interest will be duly
authorized and validly issued in accordance with the limited liability
company agreement of OLP GP (as the same may be amended and restated at or
prior to the Closing Date or the Option Closing Date, the
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"OLP GP LLC Agreement") and will be fully paid (to the extent required
under the OLP GP LLC Agreement) and nonassessable (except as such
nonassessability may be affected by Section 51 of the Xxxxxxxx Islands
Limited Liability Company Act); and the Partnership will own such
membership interest free and clear of all Liens except for Liens pursuant
to the Credit Agreements (as defined in Section 1(t)(8) hereof).
(l) Ownership of the Operating Company. At the Closing Date and the
Option Closing Date, after giving effect to the Transactions, (1) the
Partnership will directly own a 25.99% limited partner interest in the
Operating Company, (2) TSC will own directly (or indirectly through MLP
Holdco) a 74% limited partner interest in the Operating Company and (3) OLP
GP will directly own a 0.01% general partner interest in the Operating
Company; such partner interests will be duly authorized and validly issued
in accordance with the partnership agreement of the Operating Company (as
the same may be amended and restated at or prior to the Closing Date or the
Option Closing Date, the "Operating Company Partnership Agreement") and
will be fully paid (to the extent required under the Operating Company
Partnership Agreement) and, with respect to the limited partner interests,
nonassessable (except as such nonassessability may be affected by Section
41 of the Xxxxxxxx Islands Limited Partnership Act); and the Partnership,
TSC and OLP GP will own such partner interests free and clear of all Liens
except for Liens pursuant to the Credit Agreements.
(m) Ownership of the Operating Subsidiaries. At the Closing Date and
the Option Closing Date, after giving effect to the Transactions, the
Operating Company will own, directly or indirectly, 100% of the equity
interests in each of the Operating Subsidiaries (other than Nordic Rio LLC,
Stena Spirit LLC, Xxxxx Xxxxxx III, Xxxxx Xxxxxx XX and Xxxxx Xxxxxx I, of
which the Operating Company owns, indirectly, 50% of the equity interests
and KS Nordic Apollo, of which the Operating Company owns, indirectly, 89%
of the equity interests); such equity interests will be duly authorized and
validly issued in accordance with the organization documents of each
Operating Subsidiary (as the same may be amended and restated at or prior
to the Closing Date, the "Operating Subsidiaries' Organizational
Documents") and will be fully paid (to the extent required under the
Operating Subsidiaries' Organizational Agreements) and nonassessable
(except as such nonassessability may be affected by the applicable statutes
of the jurisdiction of formation of the applicable Operating Subsidiary);
and the Operating Company will own such equity interests free and clear of
all Liens except for Liens described on Schedule IV.
(n) No Other Subsidiaries. Other than its 2.0% general partner
interest in the Partnership and the Incentive Distribution Rights, the
General Partner does not own, and at the Closing Date and the Option
Closing Date, will not own, directly or indirectly, any equity or long-term
debt securities of any corporation, partnership, limited liability company,
joint venture, association or other entity. Other than (i) the
Partnership's ownership of a 100% membership interest in OLP GP, (ii) the
Partnership's ownership of 26% of the partnership interests (directly and
indirectly, through OLP GP) in the Operating Company and (iii) the
Operating Company's ownership (directly or indirectly) of the percentage of
the equity interests in each of the Operating Subsidiaries specified in
paragraph (m) above, neither the Partnership nor the Operating Company
owns, and at
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the Closing Date and the Option Closing Date, neither will own, directly or
indirectly, any equity or long-term debt securities of any corporation,
partnership, limited liability company, joint venture, association or other
entity.
(o) No Preemptive Rights or Options. Except as described in the
Disclosure Package and the Prospectus or herein, there are no preemptive
rights or other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any equity interests of any of the
Partnership Entities. Except as described in the Disclosure Package and the
Prospectus, there are no outstanding options or warrants to purchase (i)
any Common Units, Subordinated Units, Incentive Distribution Rights or
other interests in the Partnership, (B) any membership interests in the
General Partner or the Operating Company, or (C) any equity interests in
any Operating Subsidiary.
(p) No Registration Rights. No holder of securities of any of the
Partnership Entities has rights to the registration of such securities
under the Registration Statement.
(q) Capitalization. As of June 30, 2006, the Partnership would have
had, on the consolidated pro forma basis indicated in the Disclosure
Package and the Prospectus (and any amendment or supplement thereto), a
capitalization as set forth therein.
(r) Authority and Authorization. The Partnership has all requisite
limited partnership power and authority to issue, sell and deliver (i) the
Units, in accordance with and upon the terms and conditions set forth in
this Agreement, the Partnership Agreement, the Registration Statement and
the Prospectus and (ii) the Sponsor Units and the Incentive Distribution
Rights, in accordance with the terms and conditions set forth in the
Partnership Agreement and the Contribution Documents. At the Closing Date
and the Option Closing Date, all corporate, partnership and limited
liability company action, as the case may be, required to be taken by the
Teekay Entities or any of their stockholders, partners or members for the
authorization, issuance, sale and delivery of the Units, the Sponsor Units
and the Incentive Distribution Rights, the execution and delivery by the
Teekay Entities of the Operative Agreements (as defined in the last
paragraph of Section 1(t) hereof) and the consummation of the transactions
(including the Transactions) contemplated by this Agreement and the
Operative Agreements to take place as of the Closing Date or the Option
Closing Date, as applicable, shall have been validly taken.
(s) Execution and Delivery of this Agreement. This Agreement has been
duly authorized, validly executed and delivered by each of the Teekay
Parties.
(t) Enforceability of Operative Agreements.
(1) The General Partner LLC Agreement has been, or will be at the
time of Closing, duly authorized, executed and delivered by TSC;
(2) the Partnership Agreement has been, or will be at the time of
Closing, duly authorized, executed and delivered by the General
Partner and TSC and is, or will be at the time of Closing, a valid and
legally binding agreement of the General Partner and TSC, enforceable
against the General Partner and TSC in accordance with its terms;
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(3) the OLP GP LLC Agreement has been, or will be at the time of
Closing, duly authorized, executed and delivered by the Partnership;
(4) the Operating Company Partnership Agreement has been, or will
be at the time of Closing, authorized, executed and delivered by OLP
GP, the Partnership and TSC;
(5) each of the Operating Subsidiaries' Organizational Documents
has been, or will be at the time of Closing, duly authorized, executed
and delivered by the appropriate Partnership Entity;
(6) the Omnibus Agreement to be dated the Closing Date among the
Teekay Parties (the "Omnibus Agreement") has been, or will be at the
time of Closing, duly authorized, executed and delivered by each of
the Teekay Parties, and is, or will be at the time of Closing, a valid
and legally binding agreement of each of them, enforceable against
each of them in accordance with its terms;
(7) the Further Amended and Restated Loan Facility Agreement
dated June 26, 2003 among Norsk Holdings, the banks listed on Schedule
I thereto, as lenders, DNB NOR Bank ASA, as facility agent and
security trustee, Citigroup Global Markets Limited, DNB NOR Bank ASA
and Nordea Bank Finland PLC, New York Branch, as mandated lead
arrangers, and Citigroup Global Markets Limited and DNB NOR Bank ASA,
as joint book runners (the "2003 Credit Agreement"), has been duly
authorized, executed and delivered by Norsk Holdings and, assuming the
due authorization, execution and delivery by the other parties
thereto, is a valid and legally binding agreement of Norsk Holdings,
enforceable against it in accordance with its terms;
(8) the Loan Agreement dated October 2, 2006 among the Operating
Company, the banks listed on Schedule I thereto, as lenders, DNB NOR
Bank ASA, as agent, DNB NOR Bank ASA, Nordea Bank Norge ASA, New York
Branch and Fortis Capital Corp., as mandated lead arrangers, DNB NOR
Bank ASA, Nordea Bank Norge ASA, as book runners, and Deutsche
Schiffsbank Aktiengesellschaft, as security agent (the "2006 Credit
Agreement" and, with the 2003 Credit Agreement, collectively the
"Credit Agreements"), has been duly authorized, executed and delivered
by the Operating Company and, assuming the due authorization,
execution and delivery by the other parties thereto, is a valid and
legally binding agreement of the Operating Company enforceable against
it in accordance with its terms;
(9) each of the Contribution Documents has been, or will be at
the time of Closing, duly authorized, executed and delivered by the
parties thereto and is, or will be at the time of Closing, a valid and
legally binding agreement of each of them, enforceable against each of
them in accordance with its terms;
(10) each of the Administrative Services Agreements between
Teekay Shipping Limited, a Bahamas company and wholly owned subsidiary
of TSC
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("TSL"), and the Partnership, the Operating Company and ______,
respectively (collectively, the "Administrative Services Agreements"),
has been, or will be at the time of Closing, duly authorized, executed
and delivered by each of them, and is, or will be at the time of
Closing, a valid and legally binding agreement of each of them,
enforceable against each of them in accordance with its terms;
(11) each of the Advisory, Strategic Consulting, Technical and
Administrative Services Agreements between TSL and __________,
_______________ and ____________, respectively (collectively the "ATAS
Agreements"), has been, or will be at the time of Closing, duly
authorized, executed and delivered by each of them, and is, or will be
at the time of Closing, a valid and legally binding agreement of each
of them, enforceable against each of them in accordance with its
terms;
(12) the Joint Venture Partners' Agreement dated June 14, 2006
between Petrojarl JV AS, Teekay Petrojarl Offshore Holdings L.L.C. and
Teekay Petrojarl GP L.L.C. (the "Petrojarl JV Agreement") has been
duly authorized, executed and delivered by each of them, and is a
valid and legally binding agreement of the Teekay affiliates party
thereto, enforceable against each of them in accordance with its
terms;
provided that, with respect to each agreement described in this Section
1(s), the enforceability thereof may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating
to or affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law); and, provided further, that the indemnity,
contribution and exoneration provisions contained in any of such agreements
may be limited by applicable laws and public policy.
The General Partner LLC Agreement, the Partnership Agreement, the OLP
GP LLC Agreement, the Operating Company Partnership Agreement, the
Operating Subsidiaries' Organizational Documents, the Omnibus Agreement,
the Credit Agreements, the Contribution Documents, the Administrative
Services Agreements, the ATAS Agreements, and the Petrojarl JV Agreement
are herein collectively referred to as the "Operative Agreements."
(u) Enforceability of Other Agreements. Each of the agreements listed
on Schedule III (collectively, the "Other Agreements") has been, or will be
at the time of Closing, duly authorized, executed and delivered by each of
the Teekay Entities party thereto and, assuming the due authorization,
execution and delivery by the other parties thereto, is, or will be at the
time of Closing, a valid and legally binding agreement of such Teekay
Entity, enforceable against it in accordance with its terms, except where
the failure to be enforceable would not reasonably be expected to have a
Material Adverse Effect or a material adverse effect on the transactions
contemplated by this Agreement; provided that, with respect to each
agreement described in this Section 1(t), the enforceability thereof may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws relating to or affecting creditors' rights
11
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and,
provided further, that the indemnity, contribution and exoneration
provisions contained in any of such agreements may be limited by applicable
laws and public policy.
(v) Sufficiency of Contribution Documents. The Contribution Documents
were or will be legally sufficient to transfer or convey to, or vest in,
the Partnership, the Operating Company and the Operating Subsidiaries
satisfactory title to, or valid rights to use or manage, all properties not
already held by them that are, individually or in the aggregate, required
to enable the Partnership, the Operating Company and the Operating
Subsidiaries to conduct their operations (in all material respects as
contemplated by the Disclosure Package and the Prospectus), subject to the
conditions, reservations and limitations contained in the Transaction
Documents and those set forth in the Disclosure Package and the Prospectus.
The Partnership, the Operating Company and the Operating Subsidiaries, upon
execution and delivery of the Contribution Documents, succeeded or will
succeed in all material respects to the business, assets, properties,
liabilities and operations of the Contributed Business as disclosed in the
Disclosure Package, the Prospectus and the Contribution Documents.
(w) No Conflicts. None of the offering, issuance and sale by the
Partnership of the Units, the execution, delivery and performance of this
Agreement or the Operative Agreements by the Teekay Entities that are
parties hereto or thereto, or the consummation of the transactions
contemplated hereby and thereby (including the Transactions) (i) conflicts
or will conflict with or constitutes or will constitute a violation of any
agreement of limited partnership, limited liability company agreement,
certificate of incorporation or bylaws or other organizational documents of
any of the Teekay Entities, (ii) conflicts or will conflict with or
constitutes or will constitute a breach or violation of, or a default (or
an event that, with notice or lapse of time or both, would constitute such
a default) under, any indenture, contract, mortgage, deed of trust, note
agreement, loan agreement, lease or other agreement, or instrument to which
any of the Teekay Entities is a party or by which any of them or any of
their respective properties may be bound, (iii) violates or will violate
any statute, law, rule, regulation, judgment, order or decree applicable to
any of the Teekay Entities of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over any of the Teekay Entities or any of their properties, or
(iv) results or will result in the creation or imposition of any Lien upon
any property or assets of any of the Partnership Entities (other than Liens
referred to or described in the Disclosure Package and the Prospectus),
which conflicts, breaches, violations, defaults or Liens, in the case of
clauses (ii), (iii) or (iv), could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or could
materially impair the ability of any of the Teekay Entities to perform
their obligations under this Agreement, the Operative Agreements or the
Other Agreements.
(x) No Consents. Except for (i) the registration of the Units under
the Act, (ii) such consents, approvals, authorizations, registrations or
qualifications as may be required under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and applicable state securities or
"Blue Sky" laws in connection with the purchase and distribution of Units
by the Underwriters, (iii) such consents (as defined herein) that have
12
been, or prior to the Closing Date will be, obtained, (iv) such consents
that, if not obtained, would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or could not
reasonably be expected to materially impair the ability of any of the
Teekay Entities to perform their obligations under this Agreement, the
Operative Agreements or the Other Agreements, and (v) as disclosed in the
Disclosure Package and the Prospectus, no permit, consent, approval,
authorization, order, registration, filing or qualification ("Consent") of
or with any court, governmental agency or body having jurisdiction over any
of the Teekay Entities or any of their respective properties is required in
connection with the offering, issuance and sale by the Partnership of the
Units, the execution, delivery and performance of this Agreement and the
Operative Agreements by the Teekay Entities parties hereto or thereto, or
the consummation of the transactions contemplated by this Agreement or the
Operative Agreements (including the Transactions)
(y) No Default. None of the Teekay Entities is (i) in violation of its
agreement of limited partnership, limited liability company agreement,
certificate of incorporation or bylaws or other organizational documents,
(ii) in breach of or in default under (and no event that, with notice or
lapse of time or both, would constitute such a default has occurred or is
continuing under) any term, covenant, obligation, agreement or condition
contained in any indenture, mortgage, deed of trust, note agreement, loan
agreement, lease or other agreement, obligation, condition, covenant or
instrument to which it is a party or by which it is or may be bound or to
which any of its properties or assets is subject or (iii) in violation of
any statute, law, rule, regulation, judgment, order or decree applicable to
any of the Teekay Entities of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having
jurisdiction over any of the Teekay Entities or any of their properties,
which breach, default or violation, in the case of clause (ii) or (iii),
would, if continued, reasonably be expected to have a Material Adverse
Effect, or could reasonably be expected to materially impair the ability of
any of the Teekay Entities to perform their obligations under this
Agreement, the Operative Agreements or the Other Agreements. To the
knowledge of the Teekay Parties, no third party to any indenture, contract,
mortgage, deed of trust, note agreement, loan agreement, lease or other
agreement, obligation, condition, covenant or instrument to which any of
the Teekay Entities is a party or by which any of them are bound or to
which any of their properties are subject, is in default under any such
agreement, which breach, default or violation would, if continued,
reasonably be expected to have a Material Adverse Effect.
(z) Conformity of Securities to Description in Prospectus. The Units,
when issued and delivered in accordance with the terms of the Partnership
Agreement against payment therefor as provided herein, and the Sponsor
Units and the Incentive Distribution Rights, when issued and delivered in
accordance with the terms of the Partnership Agreement and the Contribution
Documents, will conform in all material respects to the descriptions
thereof contained in the Disclosure Package and the Prospectus.
(aa) No Material Adverse Change. Since the date of the latest audited
financial statements included in the Disclosure Package and the Prospectus
and other than as set forth in or contemplated by the Disclosure Package
and the Prospectus, (i) no Partnership
13
Entity has sustained any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
investigation, order or decree, (ii) there has not been any material change
in the capitalization or material increase in the short-term debt or
long-term debt of the Partnership Entities or any material adverse change,
or any development involving or which could reasonably be expected to
involve, individually or in the aggregate, a prospective material adverse
change in or affecting the general affairs, management, condition
(financial or otherwise), stockholders' equity, partners' equity, members'
equity, results of operations, business, properties, assets or prospects of
the Partnership Entities, taken as a whole, and (iii) none of the
Partnership Entities has incurred any liability or obligation, direct,
indirect or contingent, or entered into any transactions, whether or not in
the ordinary course of business, that, individually or in the aggregate, is
material to the Partnership Entities taken as a whole, or otherwise than as
set forth or contemplated in the Disclosure Package and the Prospectus
(exclusive of any supplement thereto).
(bb) Financial Statements. The consolidated historical financial
statements (including the related notes and supporting schedules) included
in the Disclosure Package, the Prospectus and the Registration Statement
(i) present fairly in all material respects the financial condition,
results of operations and cash flows of the entities purported to be shown
thereby on the basis stated therein, at the respective dates or for the
respective periods indicated, (ii) comply as to form in all material
respects with the applicable accounting requirements of the Act and (iii)
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved
(except as otherwise noted therein). The summary historical and pro forma
financial and operating information set forth in the Disclosure Package and
the Prospectus (and any amendment or supplement thereto) under the caption
"Summary Historical and Pro Forma Financial and Operating Data" and the
selected historical and pro forma financial and operating data set forth in
the Registration Statement, the Disclosure Package and the Prospectus under
the caption "Selected Historical and Pro Forma Financial and Operating
Data" is accurately presented in all material respects and prepared on a
basis consistent with the audited and unaudited historical financial
statements and pro forma financial statements, as applicable, from which it
has been derived. The pro forma financial statements included in the
Disclosure Package, the Prospectus and the Registration Statement include
assumptions that provide a reasonable basis for presenting the significant
effects directly attributable to the transactions and events described
therein; the related pro forma adjustments give appropriate effect to those
assumptions; and the pro forma adjustments reflect the proper application
of those adjustments to the historical financial statement amounts in the
pro forma financial statements included in the Prospectus, the Disclosure
Package and the Registration Statement. The pro forma financial statements
included in the Prospectus, the Disclosure Package and the Registration
Statement comply as to form in all material respects with the applicable
accounting requirements of Regulation S-X under the Act.
(cc) Independent Registered Public Accounting Firm. The accountants,
Ernst & Young LLP, who have certified or shall certify the financial
statements of Teekay Offshore Partners Predecessor (as defined in the
Disclosure Package and the Prospectus),
14
the Partnership and the General Partner and delivered their report with
respect to the audited consolidated financial statements included in the
Disclosure Package and the Prospectus, were and are the independent
registered public accounting firm with respect to such entities within the
meaning of the Act and the applicable published rules and regulations
thereunder and the rules and regulations of the Public Company Accounting
Oversight Board.
(dd) Transfer Taxes. There are no transfer taxes or other similar fees
or charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the execution
and delivery of this Agreement, the issuance by the Partnership or sale by
the Partnership of the Units or the consummation of the transactions
(including the Transactions) contemplated by this Agreement and the
Operative Agreements.
(ee) Title to Properties. At the Closing Date and the Option Closing
Date, after giving effect to the Transactions, the Operating Company and
the Operating Subsidiaries will have good and marketable title to all real
property and good title to all personal property described in the
Disclosure Package and the Prospectus to be owned by the Operating Company
and the Operating Subsidiaries, and each Operating Subsidiary identified on
Schedule VI is the sole owner of the vessel set forth opposite its name on
Schedule VI (the "Vessels"), in each case free and clear of all Liens
except (i) as described, and subject to the limitations contained, in the
Disclosure Package and the Prospectus, (ii) that arise from indebtedness
expressly assumed by the Operating Company or the Operating Subsidiaries
pursuant to the Contribution Documents or (iii) as do not materially affect
the value of such property, taken as a whole, and do not materially
interfere with the use of such properties, taken as a whole, as they have
been used in the past and are proposed to be used in the future, as
described in the Disclosure Package and the Prospectus (the Liens described
in clauses (i) through (iii) above being "Permitted Liens"); provided that
with respect to any interest in real property and buildings held under
lease by the Operating Company or any of the Operating Subsidiaries, such
real property and buildings are held under valid and subsisting and
enforceable leases (except as may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws relating
to or affecting creditors' rights generally and by general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law)), with such exceptions as do not materially
interfere with the use of the properties of the Partnership Entities, taken
as a whole as they have been used in the past as described in the
Disclosure Package and the Prospectus and are proposed to be used in the
future as described in the Disclosure Package and the Prospectus.
(ff) Vessel Registration. Each vessel identified in Schedule VI is
duly registered under the laws of the jurisdiction set forth on Schedule VI
in the name of the applicable Operating Subsidiary identified in Schedule
VI, free and clear of all Liens except for Permitted Liens.
(gg) Permits. Each of the Partnership Entities has, or at the Closing
Date and the Option Closing Date will have, such permits, consents (as
defined above), licenses,
15
franchises, concessions, certificates and authorizations ("Permits") of,
and has or will have made all declarations and filings with, all Federal,
provincial, state, local or foreign governmental or regulatory authorities,
all self-regulatory organizations and all courts and other tribunals, as
are necessary to own or lease its properties and to conduct its business in
the manner described in the Disclosure Package and the Prospectus, subject
to such qualifications as may be set forth in the Disclosure Package and
the Prospectus and except for such permits, declarations and filings that,
if not obtained, would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect; except as set forth in the
Disclosure Package and the Prospectus, each of the Partnership Entities
has, or at the Closing Date and the Option Closing Date will have,
fulfilled and performed all its material obligations with respect to such
permits which are or will be due to have been fulfilled and performed by
such date and no event has occurred that would prevent the permits from
being renewed or reissued or that allows, or after notice or lapse of time
would allow, revocation or termination thereof or results or would result
in any impairment of the rights of the holder of any such permit, except
for such non-renewals, non-issues, revocations, terminations and
impairments that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, and none of such permits
contains any restriction that is materially burdensome to the Partnership
Entities, taken as a whole.
(hh) Insurance. Except as set forth in the Disclosure Package and the
Prospectus with respect to off hire insurance, the Partnership Entities are
insured by insurers of recognized financial responsibility covering against
such losses and risks and in such amounts as are prudent and customary in
the businesses in which they are engaged; all policies of insurance
insuring the Partnership Entities or their respective businesses, assets,
employees, officers and directors are in full force and effect; the
Partnership Entities are in compliance with the terms of such policies and
instruments in all material respects; and there are no claims by any of the
Partnership Entities under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause; none of the Partnership Entities has been refused any
insurance coverage sought or applied for; and TSC and the General Partner
believe that each of the Partnership Entities will be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not reasonably be expected to have a Material
Adverse Effect.
(ii) Contracts to be Described or Filed. To the best knowledge of the
Teekay Entities, there is no agreement, franchise, contract, indenture,
lease or other document or instrument of a character required to be
described in the Registration Statement, the Disclosure Package or
Prospectus, or to be filed as an exhibit thereto, which is not described or
filed as required.
(jj) Litigation. There is (i) no action, suit or proceeding before or
by any court, arbitrator or governmental agency, body or official, domestic
or foreign, now pending or, to the knowledge of the Teekay Entities,
threatened, to which any of the Teekay Entities is or could reasonably be
expected to be made a party or to which the business or property of any of
the Teekay Entities is or could reasonably be expected to be made
16
subject or that would be required to be disclosed in the Registration
Statement which is not adequately disclosed in the Disclosure Package and
the Prospectus as required, (ii) no statute, rule, regulation or order that
has been enacted, adopted or issued by any governmental agency or, to the
knowledge of the Teekay Entities, that has been proposed by any
governmental agency, and (iii) no injunction, restraining order or order of
any nature issued by a Federal or state court or foreign court of competent
jurisdiction to which any of the Teekay Entities is or may be subject,
that, in the case of clauses (i), (ii) and (iii) above,(A) could reasonably
be expected to (1) individually or in the aggregate have a Material Adverse
Effect, or (2) prevent or result in the suspension of the offering and
issuance of the Units, or (B) questions the validity of this Agreement, any
Operative Agreement or any Other Agreement.
(kk) Certain Relationships and Related Transactions. No relationship,
direct or indirect, exists between or among any Teekay Entity, on the one
hand, and the directors, officers, members, partners, stockholders,
customers or suppliers of any Teekay Entity on the other hand that is
required to be described in the Disclosure Package and the Prospectus that
is not so described. There are no outstanding loans, advances (except
normal advances for business expenses in the ordinary course of business)
or guarantees of indebtedness by any Teekay Entity to or for the benefit of
any of the officers, directors or managers of any Partnership Entity or
their respective family members, except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus. No Teekay Entity has,
in violation of the Xxxxxxxx-Xxxxx Act of 2002, directly or indirectly,
extended or maintained credit, arranged for the extension of credit, or
renewed an extension of credit, in the form of a personal loan to or for
any director or executive officer of any Partnership Entity.
(ll) Xxxxxxxx-Xxxxx Act of 2002. The Partnership is in compliance in
all material respects with all applicable provisions of the Xxxxxxxx-Xxxxx
Act of 2002 and the rules and regulations of the Commission, the NYSE (as
defined in Section 1(qq) hereof) that are effective and applicable to the
Partnership.
(mm) No Labor Dispute. No labor problem or dispute with the employees
of the Teekay Entities exists or is threatened or imminent, and none of the
Teekay Entities is aware of any existing or imminent labor disturbance by
the employees of any of its principal suppliers, contractors or customers,
that, in each case, could reasonably be expected to have a Material Adverse
Effect.
(nn) Tax Returns. Each of the Teekay Entities has filed all foreign,
federal, state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure so to
file could not reasonably be expected to have a Material Adverse Effect)
and has paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the foregoing
is due and payable, except for any such assessment, fine or penalty that is
currently being contested in good faith or as could not reasonably be
expected to have a Material Adverse Effect.
17
(oo) Books and Records. Each Partnership Entity maintains systems of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with U.S.
generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(pp) Environmental Compliance. Each Partnership Entity (i) is in
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety,
the environment or Hazardous Materials (as defined below) ("Environmental
Laws"), (ii) has received and is in compliance with all permits, licenses
or other approvals required of it under applicable Environmental Laws to
conduct its business, (iii) has not received notice of any actual or
potential liability under any environmental law, and (iv) is not a party to
or affected by any pending or, to the knowledge of the Teekay Entities,
threatened action, suit or proceeding, is not bound by any judgment, decree
or order, and has not entered into any agreement, in each case relating to
any alleged violation of any Environmental Law or any actual or alleged
release or threatened release or cleanup at any location of any Hazardous
Materials, except where such noncompliance or deviation from that described
in (i) - (iv) above could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. None of the Teekay Entities
has been named as a "potentially responsible party" under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"). The term "Hazardous Materials" means (A) any "hazardous
substance" as defined in CERCLA, (B) any "hazardous waste" as defined in
the Resource Conservation and Recovery Act, as amended, (C) any petroleum
or petroleum product, (D) any polychlorinated biphenyl and (E) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of any
other Environmental Law.
(qq) Effect of Environmental Laws. In the ordinary course of its
business, each Partnership Entity periodically reviews the effect of
Environmental Laws on its business, operations and properties, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with Environmental Laws or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, each Partnership Entity has
reasonably concluded that such associated costs and liabilities would not,
individually or in the aggregate, have a Material Adverse Effect.
(rr) Intellectual Property. The Partnership Entities own or possess,
or as of the Closing Date will own or possess, after giving effect to the
Transactions, rights to use all patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service xxxx
registrations, copyrights, technology, know-how and other intellectual
property necessary for the conduct of their respective businesses, except
18
where the failure to possess such rights could not reasonably be expected
to have a Material Adverse Effect, and the Partnership Entities believe
that the conduct of their respective businesses will not conflict with, and
the Partnership Entities have not received any notice of any claim of
conflict with, any such rights of others.
(ss) Private Placement. The offer, sale and issuance of the Sponsor
Units to TSC and the Incentive Distribution Rights to the General Partner
are exempt from the registration requirements of the Act, the rules
thereunder and the securities laws of any state having jurisdiction with
respect thereto, and none of the Teekay Entities has taken or will take any
action that would cause the loss of such exemption.
(tt) No Distribution of Other Offering Materials. None of the Teekay
Entities has distributed and, prior to the later to occur of (i) the
Closing Date and (ii) completion of the distribution of the Units, will not
distribute, any prospectus (as defined under the Act) in connection with
the offering and sale of the Units other than the Registration Statement,
any Preliminary Prospectus, the Prospectus or other materials, if any,
permitted by the Act, including Rule 134 under the Act.
(uu) NYSE Listing. The Units have been approved for listing on the New
York Stock Exchange ("NYSE"), subject only to official notice of issuance.
(vv) Investment Company. None of the Partnership Entities is now, and
after the sale of the Units to be sold by the Partnership hereunder and
application of the net proceeds from such sale as described in the
Prospectus under the caption "Use of Proceeds" and after giving effect to
the Transactions will be, an "investment company" or a company "controlled
by" an "investment company" within the meaning of the Investment Company
Act of 1940, as amended, and the rules and regulations thereunder (the
"1940 Act").
(ww) Passive Foreign Investment Company. To the best knowledge of the
Teekay Entities, the Partnership is not a Passive Foreign Investment
Company ("PFIC") within the meaning of Section 1296 of the Code.
(xx) Tax Status. None of the Partnership Entities, other than the
Partnership, has elected to be classified as an association taxable as a
corporation for United States federal income tax purposes. Each of the
Partnership Entities, other than the Partnership, has properly elected to
be classified as a disregarded entity if it has one owner or as a
partnership if it has more than one owner for United States federal income
tax purposes (other than any Partnership Entity that is classified other
than as a corporation without regard to whether it makes an election).
(yy) Foreign Corrupt Practices Act. No Teekay Entity nor any director,
officer, agent, employee or affiliate of any Teekay Entity, is aware of or
has taken any action, directly or indirectly, that would result in a
violation by such persons of the FCPA, including, without limitation,
making use of the mails or any means or instrumentality of interstate
commerce corruptly in furtherance of an offer, payment, promise to pay or
authorization of the payment of any money, or other property, gift, promise
to give, or
19
authorization of the giving of anything of value to any "foreign official"
(as such term is defined in the FCPA) or any foreign political party or
official thereof or any candidate for foreign political office, in
contravention of the FCPA and each of the Teekay Entities and its
affiliates have conducted their businesses in compliance with the FCPA and
have instituted and maintain policies and procedures designed to ensure,
and which are reasonably expected to continue to ensure, continued
compliance therewith.
(zz) Sanctions Laws and Regulations. Neither the sale of the Units by
the Partnership hereunder nor the use of the proceeds thereof will cause
any U.S. person participating in the offering, either as underwriter and/or
purchasers of the Units, to violate the Trading With the Enemy Act, as
amended, the International Emergency Economic Powers Act, as amended, or
any foreign asset control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) (all such laws and
regulations collectively referred to as the "Sanctions Laws and
Regulations") or any enabling legislation or executive order relating
thereto.
(aaa) OFAC. None of the Teekay Entities is, and, to the knowledge of
the Teekay Parties, no director, officer, agent, employee or affiliate of
any of the Teekay Entities is, currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department ("OFAC"); and the Partnership Entities will not directly or
indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the
activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(bbb) Money Laundering Laws. The operations of the Teekay Entities are
and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency (collectively,
the "Money Laundering Laws") and no action, suit or proceeding by or before
any court or governmental agency, authority or body or any arbitrator
involving any of the Teekay Entities with respect to the Money Laundering
Laws is pending or, to the best knowledge of the Teekay Parties,
threatened.
(ccc) Brokers. Except as described in the Disclosure Package and the
Prospectus, there are no contracts, agreements or understandings between
any Partnership Entity and any person that would give rise to a valid claim
against any Partnership Entity or any Underwriter for a brokerage
commission, finder's fee or other like payment in connection with this
offering of the Units.
(ddd) Market Stabilization. None of the Teekay Entities has taken,
directly or indirectly, any action designed to or that would constitute or
that might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Partnership to facilitate the sale or resale of the Units.
20
(eee) Prohibition on Dividends. Except as provided in the Credit
Agreements and by Section 40 of the Xxxxxxxx Islands Limited Liability
Company Act of 1996, neither the Operating Company nor any Operating
Subsidiary is prohibited, directly or indirectly, from paying any dividends
to the Partnership or the Operating Company, as the case may be, from
making any other distribution on such subsidiary's equity securities, from
repaying to the Partnership or the Operating Company any loans or advances
to such subsidiary from the Partnership or the Operating Company or from
transferring any of such subsidiary's property or assets to the
Partnership, the Operating Company or any other subsidiary of the
Partnership.
(fff) Statistical and Market Data. The statistical and market-related
data included in the Disclosure Package, the Prospectus and the
Registration Statement are based on or derived from sources which the
Teekay Entities believe to be reliable and accurate.
Furthermore, the Teekay Parties represent and warrant to the
Representatives that (i) the Registration Statement, the Disclosure Package, the
Prospectus and any preliminary prospectus comply, and any further amendments or
supplements thereto are exempt from or will comply, with any applicable laws or
regulations of foreign jurisdictions in which the Prospectus, the Disclosure
Package or any preliminary prospectus, as amended or supplemented, if
applicable, are distributed in connection with the Directed Unit Program, and
(ii) no authorization, approval, consent, license, order, registration or
qualification of or with any government, governmental instrumentality or court,
other than such as have been obtained, is necessary under the securities laws
and regulations of foreign jurisdictions in which the Directed Units are offered
outside the United States. None of the Teekay Entities has offered, or caused
the Underwriters to offer, Units to any person pursuant to the Directed Unit
Program with the specific intent to unlawfully influence (i) a customer or
supplier of the Teekay Entities to alter the customer's or supplier's level or
type of business with the Teekay Entities, or (ii) a trade journalist or
publication to write or publish favorable information about the Teekay Entities
or its products.
Any certificate signed by any officer of any Teekay Entity and
delivered to the Representatives or to counsel for the Underwriters in
connection with the closing of the Offering shall be deemed a representation and
warranty by such Teekay Entity, as to matters covered thereby, to each
Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the
Partnership agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Partnership, at a purchase price
of $ per Unit, the amount of the Firm Units set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Partnership hereby
grants an option to the several Underwriters to purchase, severally and not
jointly, up to 1,050,000 Option Units at the same purchase price per Unit
as the Underwriters shall pay for the Firm Units. Said option may be
exercised only to cover over-allotments in the sale of the Firm
21
Units by the Underwriters. Said option may be exercised in whole or in part
at any time and from time to time on or before the 30th day after the date
of the Prospectus upon written or telegraphic notice by the Representatives
to the Partnership setting forth the number of Option Units as to which the
several Underwriters are exercising the option and the Option Closing Date.
The number of Option Units to be purchased by each Underwriter shall be the
same percentage of the total number of Option Units to be purchased by the
several Underwriters as such Underwriter is purchasing of the Firm Units,
subject to such adjustments as you in your absolute discretion shall make
to eliminate any fractional Units.
3. Delivery and Payment. Delivery of and payment for the Firm Units
and the Option Units (if the option provided for in Section 2(b) hereof shall
have been exercised on or before the third Business Day immediately preceding
the Closing Date) shall be made at 10:00 AM, ____________ time, on December __,
2006, at the offices of Xxxxxxx Coie LLP, Portland, Oregon, or at such time on
such later date not more than three Business Days after the foregoing date as
the Representatives shall designate, which date and time may be postponed by
agreement between the Representatives and the Partnership or as provided in
Section 9 hereof (such date and time of delivery and payment for the Units being
herein called the "Closing Date"). Delivery of the Units shall be made to the
Representatives for the respective accounts of the several Underwriters against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Partnership by wire transfer payable
in same-day funds to an account specified by the Partnership. Delivery of the
Units shall be made through the facilities of The Depository Trust Company
unless the Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised after
the third Business Day immediately preceding the Closing Date, the Partnership
will deliver the Option Units (at the expense of the Partnership) to the
Representatives, at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx the date
specified by the Representatives (which shall be within three Business Days
after exercise of said option) for the respective accounts of the several
Underwriters, against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Partnership by wire transfer payable in same-day funds to an account specified
by the Partnership. If settlement for the Option Units occurs after the Closing
Date, the Partnership will deliver to the Representatives on the Option Closing
Date for the Option Units, and the obligation of the Underwriters to purchase
the Option Units shall be conditioned upon receipt of, supplemental opinions,
certificates and letters confirming as of such date the opinions, certificates
and letters delivered on the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Units for sale to the public as set forth in
the Prospectus.
5. Agreements. Each of the Teekay Parties, jointly and severally,
agrees with the several Underwriters that:
(a) Preparation of the Prospectus and Registration Statement. Prior to
the termination of the offering of the Units, the Partnership will not file
any amendment of
22
the Registration Statement or supplement to the Prospectus or any Rule
462(b) Registration Statement unless the Partnership has furnished you a
copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. The Partnership
will cause the Prospectus, properly completed, and any supplement thereto
to be filed in a form approved by the Representatives with the Commission
pursuant to the applicable paragraph of Rule 424(b) within the time period
prescribed and will provide evidence satisfactory to the Representatives of
such timely filing. The Partnership will promptly advise the
Representatives (i) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule 424(b)
or when any Rule 462(b) Registration Statement shall have been filed with
the Commission, (ii) when, prior to termination of the offering of the
Units, any amendment to the Registration Statement shall have been filed or
become effective, (iii) of any request by the Commission or its staff for
any amendment of the Registration Statement, or any Rule 462(b)
Registration Statement, or for any supplement to the Prospectus or for any
additional information, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any
notice objecting to its use or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Partnership of
any notification with respect to the suspension of the qualification of the
Units for sale in any jurisdiction or the institution or threatening of any
proceeding for such purpose. The Partnership will use its best efforts to
prevent the issuance of any such stop order or the occurrence of any such
suspension or objection to the use of the Registration Statement and, upon
such issuance, occurrence or notice of objection, to obtain as soon as
possible the withdrawal of such stop order or relief from such occurrence
or objection, including, if necessary, by filing an amendment to the
Registration Statement or a new registration statement and using its best
efforts to have such amendment or new registration statement declared
effective as soon as practicable.
(b) Notification Regarding Disclosure Package. If, at any time prior
to the filing of the Prospectus pursuant to Rule 424(b), any event occurs
as a result of which the Disclosure Package would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made at such time not misleading, the Partnership will: (i)
notify promptly the Representatives so that any use of the Disclosure
Package may cease until it is amended or supplemented; (ii) amend or
supplement the Disclosure Package to correct such statement or omission;
and (iii) supply any amendment or supplement to you in such quantities as
you may reasonably request.
(c) Filing of Amendment or Supplement. If, at any time when a
prospectus relating to the Units is required to be delivered under the Act
(including in circumstances where such requirement may be satisfied
pursuant to Rule 172), any event occurs as a result of which the Prospectus
as then supplemented would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein
in the light of the circumstances under which they were made or the
circumstances then prevailing not misleading, or if it shall be necessary
to amend the Registration Statement or supplement the Prospectus to comply
with the Act or the rules thereunder, the Partnership promptly will: (i)
notify the Representatives of any such
23
event; (ii) prepare and file with the Commission, subject to the first
sentence of paragraph (a) of this Section 5, an amendment or supplement
which will correct such statement or omission or effect such compliance;
and (iii) supply any supplemented Prospectus to you in such quantities as
you may reasonably request.
(d) Reports to Unitholders. As soon as practicable, but in any event
not later than 90 days after the close of the period covered thereby, the
Partnership will make generally available to its unitholders and to the
Representatives an earnings statement or statements of the Partnership
Entities which will satisfy the provisions of Section 11(a) of the Act and
Rule 158.
(e) Copies of Reports. The Partnership will furnish or make available
via the Commission's Electronic Data Gathering Analysis and Retrieval
(XXXXX) System to its unitholders annual reports containing financial
statements audited by independent public accountants and quarterly reports
containing financial statements and financial information which may be
unaudited. The Partnership will, for a period of two years from the Closing
Date, furnish or make available via the Commission's Electronic Data
Gathering Analysis and Retrieval (XXXXX) System, to the Underwriters a copy
of each annual report, quarterly report, current report and all other
documents, reports and information furnished by the Partnership to holders
of Units (excluding any periodic income tax reporting materials) or filed
with any securities exchange or market pursuant to the requirements of such
exchange or market or with the Commission pursuant to the Act or the
Exchange Act (other than any annual CEO certification and annual written
affirmations to the NYSE).
(f) Signed Copies of the Registration Statement. The Partnership will
furnish to the Representatives and counsel for the Underwriters photocopies
of signed copies of the Registration Statement (including exhibits thereto)
and to each other Underwriter a copy of the Registration Statement (without
exhibits thereto) and, so long as delivery of a prospectus by an
Underwriter or dealer may be required by the Act (including in
circumstances where such requirement may be satisfied pursuant to Rule
172), as many copies of each Preliminary Prospectus, the Prospectus and
each Issuer Free Writing Prospectus and any supplement thereto as the
Representatives may reasonably request.
(g) Qualification of Securities. The Partnership will arrange, if
necessary, for the qualification of the Units for sale under the laws of
such jurisdictions as the Representatives may reasonably designate and will
maintain such qualifications in effect so long as reasonably required for
the distribution of the Units; provided that in no event shall the
Partnership be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would subject
it to service of process in suits, other than those arising out of the
offering or sale of the Units, in any jurisdiction where it is not now so
subject. The Partnership will, from time to time, prepare and file such
statements and reports as are or may be reasonably required of it to
continue such qualifications in effect for so long a period as the
Underwriters may reasonably request for the distribution of the Units.
24
(h) Lock-up Period; Lock-up Letters. The Teekay Entities will not,
without the prior written consent of Citigroup Global Markets Inc. and
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, offer, sell, contract
to sell, pledge, or otherwise dispose of, (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Teekay Entities, or
any affiliated company of the Teekay Entities), directly or indirectly,
including the filing (or participation in the filing) of a registration
statement with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act and the rules and
regulations of the Commission promulgated thereunder with respect to, any
Common Units or any securities convertible into, or exercisable, or
exchangeable for, Common Units; or publicly announce an intention to effect
any such transaction, for a period of 180 days after the date of this
Agreement, provided, however, that the Partnership may grant restricted
units or options to purchase Common Units under the Partnership's 2006
Long-Term Incentive Plan. Notwithstanding the foregoing, if (x) during the
last 17 days of the 180-day restricted period the Partnership issues an
earnings release or announces material news or a material event relating to
the Partnership occurs, or (y) prior to the expiration of the 180-day
restricted period, the Partnership announces that it will release earnings
results during the 16-day period beginning on the last day of the 180-day
period, the restrictions imposed in this clause shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the announcement of the material news or the occurrence
of the material event. The Partnership will provide the Representatives and
any co-managers and each individual subject to the restricted period
pursuant to the lockup letters described in Section 6(o) with prior notice
of any such announcement that gives rise to an extension of the restricted
period.
(i) Compliance with Xxxxxxxx-Xxxxx Act. Each of the Partnership
Entities will comply in all material respects with all applicable
provisions of the Xxxxxxxx-Xxxxx Act of 2002.
(j) Price Manipulation. The Teekay Entities will not take, directly or
indirectly, any action designed to or that would constitute or that could
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of
the Partnership to facilitate the sale or resale of the Units.
(k) Expenses. The Partnership agrees to pay the costs and expenses
relating to the following matters: (i) the preparation, printing or
reproduction and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), each Preliminary
Prospectus, the Prospectus and each Issuer Free Writing Prospectus, and
each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Registration
Statement, each Preliminary Prospectus, the Prospectus and each Issuer Free
Writing Prospectus, and all amendments or supplements to any of them, as
may, in each case, be reasonably requested for use in connection with the
offering and sale of the Units; (iii) the preparation, printing,
25
authentication, issuance and delivery of certificates for the Units,
including any stamp or transfer taxes in connection with the original
issuance and sale of the Units; (iv) the printing (or reproduction) and
delivery of this Agreement, any blue sky memorandum and all other
agreements or documents printed (or reproduced) and delivered in connection
with the offering of the Units; (v) the registration of the Units under the
Exchange Act and the listing of the Units on the NYSE; (vi) any
registration or qualification of the Units for offer and sale under the
securities or blue sky laws of the several states (including filing fees
and the reasonable fees and expenses of counsel for the Underwriters
relating to such filings); (vii) any filings required to be made with the
National Association of Securities Dealers, Inc.; (viii) the transportation
and other expenses incurred by or on behalf of Partnership representatives
in connection with presentations to prospective purchasers of the Units;
(ix) the fees and expenses of the Partnership's accountants and the fees
and expenses of counsel (including local and special counsel) for the
Partnership; and (x) all other costs and expenses of the Partnership or the
Teekay Entities incident to the performance by them of their obligations
hereunder. The Underwriters will reimburse the Partnership for expenses
that are incurred in connection with the Offering up to a maximum of
$300,000. Such reimbursement may be made by wire transfer of immediately
available funds to such account or accounts designated by the Partnership
or such other method as agreed to by the parties following delivery of
reasonably satisfactory documentation of the expenses to the Underwriters.
Notwithstanding the foregoing, it is understood that, except as expressly
provided in this subsection (k), Sections 5(q), 7 and 8 hereof, the
Underwriters will pay all of their own costs and expenses, including
without limitation, fees and disbursements of their counsel, transfer taxes
on the resale by them of any of the Common Units, the transportation and
other expenses incurred by or on their behalf in connection with
presentations to potential purchasers of Units and any advertising expenses
relating to the offers of Units they may make.
(l) The Teekay Entities agree that, unless they have or shall have
obtained the prior written consent of the Representatives, and each
Underwriter, severally and not jointly, agrees with the Teekay Entities
that, unless it has or shall have obtained, as the case may be, the prior
written consent of the Partnership, it has not made and will not make any
offer relating to the Units that would constitute an Issuer Free Writing
Prospectus or that would otherwise constitute a "free writing prospectus"
(as defined in Rule 405) required to be filed by the Partnership with the
Commission or retained by the Partnership under Rule 433; provided that the
prior written consent of the parties hereto shall be deemed to have been
given in respect of any Free Writing Prospectuses included in Schedule II
hereto and any electronic road show. Any such free writing prospectus
consented to by the Representatives or the Partnership, as applicable, is
hereinafter referred to as a "Permitted Free Writing Prospectus." The
Partnership agrees that (x) it has treated and will treat, as the case may
be, each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus and (y) it has complied and will comply, as the case may be,
with the requirements of Rules 164 and 433 applicable to any Permitted Free
Writing Prospectus, including in respect of timely filing with the
Commission, legending and record keeping.
26
(m) Use of Proceeds. The Partnership Entities will use the net
proceeds received by them from the sale of the Units in the manner
specified in the Disclosure Package and the Prospectus under "Use of
Proceeds."
(n) Rule 463. The Partnership will file with the Commission such
information in Form 20-F as may be required by Rule 463 under the Act.
(o) Investment Company; PFIC. For a period of five years after the
Closing Date or, if later, the Option Closing Date, the Partnership will
use its best reasonable efforts to ensure that (i) no Partnership Entity,
nor any subsidiary thereof, shall become an "investment company" as defined
in the 1940 Act, and (2) the Partnership shall not become a PFIC.
(p) Sanctions Laws and Regulations. The Partnership will not take, and
will cause each subsidiary not to take, directly or indirectly, any action
that could reasonably be expected to result in a violation by any U.S.
person participating in the offering of the Sanctions Laws and Regulations
with respect to the sale of the Units hereunder. Further, the Partnership
will not use, and will cause each subsidiary not to use, the proceeds from
the sale of the Units, directly or indirectly, for any purpose or activity
that would cause the Underwriters or any purchaser of the Units to be in
violation of the Sanctions Laws and Regulations or any agent or "Specially
Designated National" of any country the subject of the Sanctions Laws and
Regulations, or any person or entity of any country the subject of the
Sanctions Laws and Regulations.
(q) Directed Units.
(1) The Partnership agrees to pay (i) all fees and disbursements
reasonably incurred by the Underwriters (but excluding all fees and
expenses of counsel in connection with the Directed Unit Program, (ii)
all costs and expenses incurred by the Underwriters in connection with
the printing (or reproduction) and delivery (including postage, air
freight charges and other charges for counting and packaging) of such
copies of the Directed Unit Program materials, and (iii) all stamp
duties, similar taxes or duties or other taxes, if any, incurred by
the Underwriters in connection with the Directed Unit Program.
(2) Furthermore, the Partnership covenants with Citigroup Global
Markets Inc. that the Partnership Entities will comply with all
applicable securities and other applicable laws, rules and regulations
in each foreign jurisdiction in which the Directed Units are offered
in connection with the Directed Unit Program.
(r) Appointment of Qualified Independent Underwriter. The Teekay
Parties hereby confirm their engagement of Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated as, and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated hereby confirms its agreement with the Teekay Parties to
render services as, a "qualified independent underwriter" within the
meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. with respect to the offering and sale of the
Units.
27
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, solely in its capacity
as qualified independent underwriter and not otherwise, is referred to
herein as the "Independent Underwriter."
6. Conditions to the Obligations of the Underwriters. The obligations
of the Underwriters to purchase the Firm Units and the Option Units, as the case
may be, shall be subject to the accuracy of the representations and warranties
on the part of the Teekay Parties contained herein as of the Execution Time, the
Closing Date and any Option Closing Date pursuant to Section 3 hereof, to the
accuracy of the statements of the Teekay Parties made in any certificates
delivered pursuant to the provisions hereof, to the performance by the Teekay
Parties of their obligations hereunder and to the following additional
conditions:
(a) The Prospectus, and any supplement thereto, have been filed in the
manner and within the time period required by Rule 424(b); any other
material required to be filed by the Partnership pursuant to Rule 433(d)
under the Act shall have been filed with the Commission within the
applicable time periods prescribed for such filings by Rule 433; and no
stop order suspending the effectiveness of the Registration Statement or
any notice objecting to its use shall have been issued and no proceedings
for that purpose shall have been instituted or threatened.
(b) All corporate, partnership and limited liability company
proceedings and other legal matters incident to the authorization, form and
validity of this Agreement, the Operative Agreements, the Common Units, the
Subordinated Units, the Incentive Distribution Rights, the Registration
Statement and the Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby (including the
Transactions) shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Partnership shall have furnished to
such counsel all documents and information that they may reasonably request
to enable them to pass upon such matters.
(c) The Partnership shall have requested and caused Xxxxxx, Xxxxxx &
Xxxxxxxx (New York) LLP, special Xxxxxxxx Islands counsel for the
Partnership, to have furnished to the Representatives their written
opinion, dated the Closing Date and addressed to the Representatives, in
form and substance reasonably satisfactory to the Representatives, to the
effect that:
(1) Formation of the Partnership and the Operating Company. Each
of the Partnership and the Operating Company has been duly formed and
is validly existing in good standing as a limited partnership under
the law of the Republic of The Xxxxxxxx Islands, and has the limited
partnership power and authority to own or lease its properties, to
assume the liabilities being assumed by it pursuant to the
Contribution Documents and to conduct its business, in each case in
all material respects as described in the Registration Statement, the
Disclosure Package and the Prospectus.
(2) Formation of the General Partner and the OLP GP. Each of the
General Partner, the OLP GP and, if formed prior to the Closing Date,
MLP
28
Holdco has been duly formed and is validly existing in good standing
as a limited liability company under the law of the Republic of The
Xxxxxxxx Islands, and each has the limited liability company power and
authority to own or lease its properties, to assume the liabilities
being assumed by it pursuant to the Contribution Documents and to
conduct its business, in each case in all material respects as
described in the Registration Statement, the Disclosure Package and
the Prospectus.
(3) Formation of Operating Subsidiaries. Each of the entities
listed on Schedule V (the "Xxxxxxxx Islands Subsidiaries") is validly
existing in good standing as a limited liability company, corporation
or trust, as applicable, under the law of the Republic of The Xxxxxxxx
Islands, and each has the limited liability company, corporate, or
trust, as applicable, power and authority to own or lease its
properties, to assume the liabilities being assumed by it pursuant to
the Contribution Documents and to conduct its business, in each case
in all material respects as described in the Registration Statement,
the Disclosure Package and the Prospectus.
(4) Ownership of the General Partner Interest in the Partnership.
The General Partner is the sole general partner of the Partnership
with a 2% general partner interest in the Partnership; such general
partner interest has been duly authorized and validly issued in
accordance with the Partnership Agreement; and, to our knowledge the
General Partner owns its general partner interest free and clear of
all Liens (except for restrictions on transferability contained in the
Partnership Agreement, as described in the Disclosure Package and the
Prospectus or under applicable securities laws).
(5) Ownership of the Sponsor Units and the Incentive Distribution
Rights. TSC or, if formed prior to the Closing Date, MLP Holdco owns
the Sponsor Units and the General Partner owns all of the Incentive
Distribution Rights; all of such Sponsor Units, the Incentive
Distribution Rights and the limited partner interests represented
thereby have been duly authorized and validly issued in accordance
with the Partnership Agreement, and are fully paid (to the extent
required under the Partnership Agreement) and nonassessable; and to
our knowledge, TSC owns the Sponsor Units and the General Partner owns
the Incentive Distribution Rights, in each case free and clear of all
Liens (except (a) as described in the Contribution Documents specified
on Schedule ______ to such counsel's opinion and (b) with respect to
the Incentive Distribution Rights, restrictions on transferability as
described in the Disclosure Package and the Prospectus or under
applicable law).
(6) Ownership of MLP Holdco. If MLP Holdco is formed prior to the
Closing Date, TSC directly owns a 100% membership interest in MLP
Holdco; such membership interest has been duly authorized and validly
issued in accordance with the limited liability company agreement of
MLP Holdco and is fully paid (to the extent required under such
limited liability company agreement) and nonassessable (except as such
nonassessability may be affected by Section 31
29
of the Xxxxxxxx Islands Limited Liability Company Act); and, to our
knowledge, MLP Holdco directly owns such membership interest free and
clear of all Liens.
(7) Valid Issuance of the Firm Units. The Common Units to be
issued and sold to the Underwriters by the Partnership pursuant to
this Agreement and the limited partner interests represented by such
Common Units have been duly authorized by the Partnership Agreement
and, when issued and delivered to the Underwriters against payment
therefor in accordance with the terms of this Agreement, will be
validly issued, fully paid (to the extent required under the
Partnership Agreement) and nonassessable; and other than the Sponsor
Units and the Incentive Distribution Rights, the Common Units will be
the only limited partner interests of the Partnership issued and
outstanding at the Closing Date other than any awards made under the
Partnership's 2006 Long-Term Incentive Plan.
(8) Ownership of the General Partner. TSC owns directly (or
indirectly through MLP Holdco) a 100% membership interest in the
General Partner; such membership interest has been duly authorized and
validly issued in accordance with the General Partner LLC Agreement
and is fully paid (to the extent required under the General Partner
LLC Agreement) and nonassessable (except as such nonassessability may
be affected by Section 31 of the Xxxxxxxx Islands Limited Liability
Company Act); and to our knowledge, TSC directly owns such membership
interest free and clear of all Liens.
(9) Ownership of the OLP GP. The Partnership owns a 100%
membership interest in the OLP GP; such membership interest has been
duly authorized and validly issued in accordance with the OLP GP LLC
Agreement and is fully paid (to the extent required under the OLP GP
LLC Agreement) and nonassessable (except as such nonassessability may
be affected by Section 31 of the Xxxxxxxx Islands Limited Liability
Company Act); and to our knowledge, the Partnership owns such
membership interest free and clear of all Liens other than Liens
listed on Schedule IV hereto.
(10) Ownership of the Operating Company. (A) The Partnership owns
a 25.99% limited partner interest in the Operating Company; (B) the
OLP GP owns a 0.01% general partner interest in the Operating Company;
and (C) TSC owns a 74.0% limited partner interest in the Operating
Company; each such partner interest has been duly authorized and
validly issued in accordance with the Operating Company Partnership
Agreement and is fully paid (to the extent required under the
Operating Company Partnership Agreement) and, with respect to the
limited partner interests, nonassessable; and to our knowledge, the
Partnership, the OLP GP and MLP Holdco each owns their respective
partnership interests free and clear of all Liens other than Liens
listed on Schedule IV hereto.
(11) Ownership of the Xxxxxxxx Islands Subsidiaries. The
Operating Company owns 100% of the equity interests in each Xxxxxxxx
Islands Subsidiary; such equity interests have been duly authorized
and validly issued in accordance
30
with the organizational documents of each Xxxxxxxx Islands Subsidiary
and are fully paid (to the extent required under the organizational
documents of each Xxxxxxxx Islands Subsidiary) and nonassessable; and
to our knowledge, the Operating Company owns such equity interests
free and clear of all Liens other than Liens pursuant to the credit
agreements and related security agreements disclosed or referred to in
the Disclosure Package and the Prospectus.
(12) No Preemptive Rights or Options. Except as described in the
Disclosure Package and the Prospectus, there are no preemptive rights
or other rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, (i) any limited partner interests in
the Partnership or the Operating Company, (ii) any membership
interests in the General Partner or the OLP GP or (iii) any equity
interests in any Xxxxxxxx Islands Subsidiary, in each case pursuant to
the limited partnership agreement, limited liability company agreement
or other organizational documents of such entity. To the knowledge of
such counsel and except as described in the Disclosure Package and the
Prospectus, there are no outstanding options or warrants to purchase
(A) any Common Units, Subordinated Units, Incentive Distribution
Rights or other interests in the Partnership, (B) any partnership
interests in the Operating Company, (C) any membership interests in
the General Partner or the OLP GP, or (D) any equity interests in any
Xxxxxxxx Islands Subsidiary.
(13) No Registration Rights. To the knowledge of such counsel,
neither the filing of the Registration Statement nor the offering or
sale of the Common Units as contemplated by this Agreement gives rise
to any rights for or relating to the registration of any securities of
any of the General Partner, the Partnership, the OLP GP, the Operating
Company or the Xxxxxxxx Islands Subsidiaries.
(14) Authority and Authorization. The Partnership has all
requisite limited partnership power and authority to issue, sell and
deliver (i) the Common Units, in accordance with and upon the terms
and conditions set forth in this Agreement, the Partnership Agreement,
the Registration Statement and the Prospectus and (ii) the Sponsor
Units and Incentive Distribution Rights, in accordance with and upon
the terms and conditions set forth in the Partnership Agreement and
the Contribution Documents. All corporate, limited partnership and
limited liability company action, as the case may be, required to be
taken by the Xxxxxxxx Islands Entities or any of their respective
stockholders, partners or members pursuant to the law of the Republic
of The Xxxxxxxx Islands for the authorization, issuance, sale and
delivery of the Common Units, the Sponsor Units and the Incentive
Distribution Rights, the execution and delivery of the Operative
Agreements to which any of the Xxxxxxxx Islands Entities is a party
and the consummation of the transactions (including the Transactions)
contemplated by this Agreement and such Operative Agreements, has been
validly taken.
(15) Due Execution and Delivery of the Underwriting Agreement and
the Operative
31
Agreements to which any of the Xxxxxxxx Islands Entities is a party
has been duly authorized and validly executed and delivered by each
such entity, as applicable.
(16) Enforceability of Operative Agreements. Assuming due
authorization, execution and delivery by each party to the Operative
Agreements (other than the Xxxxxxxx Islands Entities), each of the
Operative Agreements governed by the law of the Republic of The
Xxxxxxxx Islands constitutes a valid and legally binding obligation of
each of the Teekay Entities parties thereto, enforceable against each
such Teekay Entity in accordance with its respective terms, except
that (i) the enforceability thereof may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law)
and (ii) the indemnity, contribution and exoneration provisions
contained in any of such agreements may be limited by applicable laws
and public policy.
(17) Sufficiency of Contribution Documents. Each of the
Contribution Documents that is governed by the law of the Republic of
The Xxxxxxxx Islands is in a form legally sufficient under the law of
the Republic of The Xxxxxxxx Islands to transfer or convey to, or vest
in, the Partnership, the OLP GP, the Operating Company and the
Operating Subsidiaries, as the case may be, the properties identified
in such Contribution Documents, subject to the conditions,
reservations and limitations contained in such Contribution Documents.
The Partnership, the OLP GP, the Operating Company and the Operating
Subsidiaries, upon execution and delivery of the Contribution
Documents governed by the law of the Republic of The Xxxxxxxx Islands,
succeeded or will succeed in all material respects under the law of
the Republic of The Xxxxxxxx Islands to the business, assets,
properties, liabilities and operations of the Contributed Business to
the extent provided by such Contribution Documents governed by
Xxxxxxxx Islands law.
(18) No Conflicts. None of the offering, issuance and sale by the
Partnership of the Common Units, the execution, delivery and
performance of this Agreement or the Operative Agreements governed by
the law of the Republic of The Xxxxxxxx Islands by the Teekay
Entities, as applicable, or the consummation of the transactions
contemplated hereby and thereby (including the Transactions) (i)
conflicts or will conflict with or constitutes or will constitute a
violation of any limited partnership agreement, limited liability
company agreement or other organizational documents of any Xxxxxxxx
Islands Entity, (ii) conflicts or will conflict with or constitutes or
will constitute a breach or violation of, or a default under (or an
event which, with notice or lapse of time or both, would constitute
such a default) any Operative Agreement governed by the law of the
Republic of The Xxxxxxxx Islands, or any other agreement governed by
the law of the Republic of The Xxxxxxxx Islands filed as an exhibit to
the Registration Statement, (iii) violates or will violate any
statute, law, rule, regulation, judgment, order or decree known to
such counsel of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority situated in, the
Republic
32
of The Xxxxxxxx Islands, or (iv) to our knowledge results or will
result in the creation or imposition of any Lien upon any property or
assets of any of the Partnership Entities.
(19) No Consents. No consent (as such terms is defined in Section
1(x) hereof) under the law of the Republic of The Xxxxxxxx Islands is
required for the offering, issuance and sale by the Partnership of the
Common Units, the execution, delivery and performance of this
Agreement and the Operative Agreements governed by the law of the
Republic of The Xxxxxxxx Islands by the Teekay Entities party thereto
or the consummation of the transactions contemplated by this Agreement
or the Operative Agreements governed by the law of the Republic of The
Xxxxxxxx Islands (including the Transactions).
(20) Permits. To the knowledge of such counsel, no permits (as
such term is defined in Section1(gg) hereof) of, or declarations or
filings with, any governmental or regulatory authorities of the
Republic of The Xxxxxxxx Islands are required for any of the
Partnership Entities to own or lease its properties and to conduct its
business in the manner described in the Disclosure Package and the
Prospectus.
(21) Accuracy of Statements. The statements in the Disclosure
Package and Prospectus under the captions "Our Cash Distribution
Policy and Restrictions on Distributions," "How We Make Cash
Distributions," "Business--Regulation--International Maritime
Organization (or IMO)," "Business--Regulation--Environmental
Regulations--The United States Oil Pollution Act of 1990 (or OPA 90),"
"Business--Regulation--Environmental Regulations--Other Environmental
Initiatives," "Business--Taxation of the Partnership--Xxxxxxxx Islands
Taxation," "Conflicts of Interest and Fiduciary Duties," "The
Partnership Agreement--Limited Liability" and "Service of Process and
Enforcement of Civil Liabilities," insofar as they constitute
descriptions of agreements, fairly describe in all material respects
the portions of the agreements addressed thereby, and insofar as they
purport to constitute summaries of law or legal conclusions, fairly
describe in all material respects the portions of the statutes and
regulations addressed thereby.
(22) Negative Assurance. Although we have not independently
verified, are not passing on, and are not assuming any responsibility
for the accuracy, completeness or fairness of the statements contained
in the Registration Statement, the Disclosure Package and the
Prospectus under the captions "Business--Regulation--International
Maritime Organization (or IMO)," "Business-Regulation-Environmental
Regulations--The United States Oil Pollution Act of 1990 (or OPA 90),"
"Business--Regulation--Environmental Regulations--Other Environmental
Initiatives," "Business--Taxation of the Partnership--Xxxxxxxx Islands
Taxation," "Conflicts of Interest and Fiduciary Duties," "The
Partnership Agreement-Limited Liability" and "Service of Process and
Enforcement of Civil Liabilities," (except to the extent specified in
the foregoing opinion), no facts have come to such counsel's attention
that lead such
33
counsel to believe that the above-referenced sections of the
Registration Statement, as of its effective date, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, that the above-referenced sections of the
Prospectus, as of its issue date and the Closing Date, contains or
contained an untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading
or that the above-referenced sections of the Disclosure Package, as of
the Execution Time, contained an untrue statement of a material fact
or omitted to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(23) No Additional Liability. Upon the consummation of the
Transactions, the Partnership will not be liable under the law of the
Republic of The Xxxxxxxx Islands for the liabilities of the Operating
Company or the Operating Subsidiaries and the limited partners of the
Partnership will not be liable under the law of the Republic of The
Xxxxxxxx Islands for the liabilities of the Partnership, the Operating
Company or the Operating Subsidiaries.
(24) Choice of Law. The choice of New York law to govern this
Agreement constitutes a valid choice of law under the law of the
Republic of The Xxxxxxxx Islands.
(25) Non-Exclusive Jurisdiction. The submission by the
Partnership to the non-exclusive jurisdiction of any Federal or state
court in the Borough of Manhattan, The City of New York, is a valid
submission under the law of the Republic of The Xxxxxxxx Islands.
(26) Enforcement of Judgments. A judgment granted by a foreign
court against the Partnership may be enforced in the Republic of The
Xxxxxxxx Islands without a retrial on the merits of the matter
provided that: (i) the judgment is for a sum of money and is final in
the jurisdiction granting the judgment; (ii) the court granting the
judgment had jurisdiction under the laws of the place where it sat and
the judgment does not offend principles of the Republic of The
Xxxxxxxx Islands as to due process, propriety or public order, and
(iii) the defendant was actually present in person or by a duly
appointed representative and the judgment does not constitute in
effect a default judgment.
In rendering such opinion, such counsel may (A) rely in respect of matters
of fact upon certificates of officers and employees of the Teekay Entities and
upon information obtained from public officials, (B) assume that all documents
submitted to them as originals are authentic, that all copies submitted to them
conform to the originals thereof, and that the signatures on all documents
examined by them are genuine, (C) state that their opinion is limited to Federal
laws, the laws of the State of New York and the laws of The Republic of the
Xxxxxxxx Islands, (D) state that they express no opinion with respect to the
title of any of the Teekay Entities to any
34
of their respective real or personal property purported to be transferred by the
Contribution Documents nor with respect to the accuracy or descriptions of real
or personal property.
Such counsel will state that their opinion filed as Exhibit 8.2 to the
Registration Statement is confirmed and the Underwriters may rely upon such
opinion as if it were addressed to them.
(d) The Partnership shall have requested and caused Xxxxxxx Coie LLP,
counsel for the Partnership, to have furnished to you their written
opinion, dated the Closing Date and addressed to you, in form and substance
reasonably satisfactory to the Underwriters, to the effect that:
(1) Enforceability. The Omnibus Agreement has been duly
authorized, validly executed and delivered by each of the parties
thereto and constitutes a valid and legally binding obligation of the
parties thereto, enforceable against each of them in accordance with
its respective terms, except that (i) the enforceability thereof may
be limited by applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws relating to or affecting
creditors' rights generally and by general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) and (ii) the indemnity, contribution
and exoneration provisions contained in any of such agreement may be
limited by applicable laws and public policy.
(2) Tax Opinion. The opinion of Xxxxxxx Coie LLP that is filed as
Exhibit 8.1 to the Registration Statement is confirmed and the
Underwriters may rely upon such opinion as if it were addressed to
them.
(3) No Options. To the knowledge of such counsel and except as
described in the Disclosure Package and the Prospectus, there are no
outstanding options or warrants to purchase (A) any Common Units,
Subordinated Units, Incentive Distribution Rights or other interests
in the Partnership, or (B) any membership interests in the General
Partner, the Operating Company, or the Operating Subsidiaries.
(4) No Registration Rights. To the knowledge of such counsel,
there are no contracts, agreements or understandings between any of
the Teekay Entities and any person granting such person the right to
require any of the Teekay Entities to file a registration statement
under the Act with respect to any securities of any of the Partnership
Entities owned or to be owned by such person or to require any of the
Teekay Entities to include such securities in the securities
registered pursuant to the Registration Statement or in any securities
being registered pursuant to any other registration statement filed by
any Partnership Entity under the Act.
(5) Accuracy of Statements. The statements in the Disclosure
Package and the Prospectus under the captions "Our Cash Distribution
Policy and
35
Restrictions on Distributions--General," "How We Make Cash
Distributions," "Conflicts of Interest and Fiduciary Duties,"
"Description of the Common Units," "The Partnership Agreement,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources--Credit
Facilities," "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital
Resources--Covenants and Other Restrictions in Our Financing
Arrangements," "Business--Vessel Contracts," and "Certain
Relationships and Related Party Transactions--Omnibus Agreement,"
"Certain Relationships and Related Party Transactions--Advisory and
Administrative Services Agreements," "Certain Relationships and
Related Party Transactions--Aframax Tanker Time-Charter Contracts With
Teekay Shipping Corporation," and "Certain Relationships and Related
Party Transactions--Joint Venture with Petrojarl ASA," insofar as they
constitute descriptions of agreements, fairly describe in all material
respects the portions of the agreements addressed thereby, and the
Common Units, the Subordinated Units and the Incentive Distribution
Rights conform in all material respects to the descriptions thereof
contained in the Registration Statement, the Disclosure Package and
the Prospectus under the captions "Summary--The Offering," "Our Cash
Distribution Policy and Restrictions on Distributions--General," "How
We Make Cash Distributions," "Description of the Common Units" and
"The Partnership Agreement"; provided, however, that such counsel need
not express any opinion with respect to Xxxxxxxx Islands law.
(6) Description of Investment by Employee Benefit Plans. The
statements in the Registration Statement, the Disclosure Package and
the Prospectus under the caption "Investment in Teekay Offshore
Partners L.P. by Employee Benefit Plans," insofar as it purports to
constitute a summary of law or legal conclusions, fairly describes in
all material respects the portions of the statutes and regulations
addressed thereby.
(7) Effectiveness of Registration Statement. The Registration
Statement was declared effective under the Act as of _________, 2006;
a Rule 462(b) Registration Statement was filed on _______, 2006 and
was immediately effective upon filing; the Prospectus was filed with
the Commission pursuant to Rule 424(b) on _________, 2006 in a manner
and within the time period required by Rule 424(b); and, to the
knowledge of such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued under the Act and no
proceedings for that purpose have been instituted or threatened
(8) Compliance as to Form. The Registration Statement and the
Prospectus (other than the financial statements and other financial
and statistical information contained therein, as to which such
counsel need not express any opinion) comply as to form in all
material respects with the applicable requirements of the Act and the
rules thereunder.
(9) Legal Proceedings or Contracts to be Described or Filed. To
the knowledge of such counsel, (i) there is no pending or threatened
action, suit or
36
proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving any Teekay Entity or its property of
a character required to be disclosed in the Registration Statement
which is not disclosed in the Disclosure Package and the Prospectus as
required and (ii) there is no agreement, franchise, contract,
indenture, lease or other document or instrument of a character that
are required to be described in the Registration Statement or the
Prospectus by the Act or to be filed by the Act as exhibits to the
Registration Statement that are not described or filed as required.
(10) Investment Company. No Partnership Entity is an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended.
(11) Private Placement. The offer, sale and issuance of the
Sponsor Units to TSC and of the Incentive Distribution Rights to the
General Partner pursuant to the Partnership Agreement are exempt from
the registration requirements of the Act.
In addition, such counsel shall state that, in the course of such
counsel's participation, as counsel to the Partnership, in the preparation
of the Registration Statement, the Disclosure Package and the Prospectus,
such counsel has examined information available to it, including legal
records, documents and proceedings, and has attended conferences with,
among others, representatives of the Underwriters, officers and other
representatives of the Teekay Entities and the independent public
accountants for the Partnership, at which conferences the contents of the
Registration Statement, the Disclosure Package and the Prospectus were
discussed. Such counsel shall also state that, without undertaking to
determine independently or assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus, such counsel has no reason to believe that:
(i) the Registration Statement, as of its effective date, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading; or (ii) the Disclosure Package, as of the Execution Time,
contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading; or
(iii) the Prospectus, as of its issue date or as of the Closing Date,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (except that such counsel need not express any statement or
belief with respect to (x) any financial statements, including the notes
and schedules thereto and the auditor's reports, if any thereon or (y)
other financial or statistical data included in the Registration Statement,
Disclosure Package or the Prospectus).
(e) The Partnership shall have requested and caused Xxxxxx Xxxxxxx,
Executive Vice President and General Counsel for TSC, to have furnished to
you a letter, dated the Closing Date and addressed to you, in form and
substance reasonably
37
satisfactory to the Underwriters, which shall state that such counsel has
participated in conferences with officers and other representatives of the
Teekay Entities and the independent public accountants of the Partnership
and your representatives, at which the contents of the Registration
Statement, the Disclosure Package and the Prospectus and related matters
were discussed, and although such counsel has not independently verified,
is not passing on, and is not assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in, the Registration
Statement, the Disclosure Package and the Prospectus, no facts have come to
such counsel's attention that lead such counsel to believe that: (i) the
Registration Statement (other than (x) the financial statements included
therein, including the notes and schedules thereto and the auditors'
reports thereon, and (y) the other financial and statistical information
included therein, as to which such counsel need not comment), as of its
effective date contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) the Disclosure Package (other
than (x) the financial statements included therein, including the notes and
schedules thereto and the auditors' reports thereon, and (y) the other
financial and statistical information included therein, as to which such
counsel need not comment), as of the Execution Time contained an untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or (iii) the Prospectus (other than
(x) the financial statements included therein, including the notes and
schedules thereto and the auditors' reports thereon, and (y) the other
financial and statistical information included therein, as to which such
counsel need not comment), as of its issue date and the Closing Date
contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
(f) The Partnership shall have requested and caused:
(1) ____________, special Norwegian tax counsel for the
Partnership, to have furnished to you their written letter, dated the
Closing Date and addressed to you, in form and substance reasonably
satisfactory to the Underwriters, to the effect set forth in Exhibit
B-1 hereto;
(2) ____________, special Luxembourg tax counsel for the
Partnership, to have furnished to you their written letter, dated the
Closing Date and addressed to you, in form and substance reasonably
satisfactory to the Underwriters, to the effect set forth in Exhibit
B-2 hereto;
(3) ____________, special Netherlands tax counsel for the
Partnership, to have furnished to you their written letter, dated the
Closing Date and addressed to you, in form and substance reasonably
satisfactory to the Underwriters, to the effect set forth in Exhibit
B-3 hereto;
(4) ____________, special Singapore tax counsel for the
Partnership, to have furnished to you their written letter, dated the
Closing Date and addressed
38
to you, in form and substance reasonably satisfactory to the
Underwriters, to the effect set forth in Exhibit B-4 hereto;
(5) ____________, special Australian tax counsel for the
Partnership, to have furnished to you their written letter, dated the
Closing Date and addressed to you, in form and substance reasonably
satisfactory to the Underwriters, to the effect set forth in Exhibit
B-5 hereto;
(6) ____________, special Canadian tax counsel for the
Partnership, to have furnished to you their written letter, dated the
Closing Date and addressed to you, in form and substance reasonably
satisfactory to the Underwriters, to the effect set forth in Exhibit
B-6 hereto;
(g) The Partnership shall have requested and caused:
(1) Thommessen Xxxxxxxx Xxxxx Xxxx AS, Norwegian counsel for the
Partnership, to have furnished to you their written opinion, dated the
Closing Date and addressed to you, in form and substance reasonably
satisfactory to the Underwriters, to the effect set forth in Exhibit
C-1 hereto;
(2) ____________, Bahamas counsel for the Partnership, to have
furnished to you their written opinion, dated the Closing Date and
addressed to you, in form and substance reasonably satisfactory to the
Underwriters, to the effect set forth in Exhibit C-2 hereto;
(3) ____________, Luxembourg counsel for the Partnership, to have
furnished to you their written opinion, dated the Closing Date and
addressed to you, in form and substance reasonably satisfactory to the
Underwriters, to the effect set forth in Exhibit C-3 hereto;
(4) ____________, Netherlands counsel for the Partnership, to
have furnished to you their written opinion, dated the Closing Date
and addressed to you, in form and substance reasonably satisfactory to
the Underwriters, to the effect set forth in Exhibit C-4 hereto;
(5) ____________, Singapore counsel for the Partnership, to have
furnished to you their letter, dated the Closing Date and addressed to
you, in form and substance reasonably satisfactory to the
Underwriters, to the effect set forth in Exhibit C-5 hereto; and
(6) ____________, Australian counsel for the Partnership, to have
furnished to you their written opinion, dated the Closing Date and
addressed to you, in form and substance reasonably satisfactory to the
Underwriters, to the effect set forth in Exhibit C-6 hereto.
(h) The Representatives shall have received from Xxxxxx & Xxxxxx
L.L.P., counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Units, the
39
Registration Statement, the Disclosure Package, the Prospectus (together
with any supplement thereto) and other related matters as the
Representatives may reasonably require, and the Partnership shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(i) Each of TSC and the General Partner shall have furnished to the
Underwriters a certificate signed by the principal executive officer and
the principal financial officer of each such entity dated the Closing Date
and addressed to the Underwriters, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the
Disclosure Package, the Prospectus and any Issuer Free Writing Prospectus
and any amendment or supplement thereto, as well as each electronic road
show used in connection with the offering of the Units, and this Agreement
and that:
(i) the representations and warranties of the Teekay Parties
in this Agreement are true and correct on and as of the Closing
Date with the same effect as if made on the Closing Date and each
Teekay Party has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use has
been issued and no proceedings for that purpose have been
instituted or, to such entity's knowledge, threatened;
(iii) since the date of the most recent financial statements
included in the Disclosure Package and the Prospectus (exclusive
of any supplement thereto), there has been no material adverse
effect on the general affairs, condition (financial or
otherwise), results of operations, business, properties, assets
or prospects of the Partnership Entities, taken as a whole,
whether or not arising from transactions in the ordinary course
of business, except as set forth in or contemplated in the
Disclosure Package and the Prospectus (exclusive of any
supplement thereto); and
(iv) such other matters as you may reasonably request.
(j) The Partnership shall have requested and caused Ernst & Young LLP
to have furnished to the Representatives, at the Execution Time and at the
Closing Date, letters, dated respectively as of the Execution Time and as
of the Closing Date, in form and substance reasonably satisfactory to the
Representatives, confirming that they are independent accountants with
respect to the Teekay Entities within the meaning of the Act and the
Exchange Act and the applicable rules and regulations adopted by the
Commission thereunder and the Public Company Accounting Oversight Board
(United States) (the "PCAOB") and that they have performed a review of the
unaudited interim financial information of Teekay Offshore Partnership
Predecessor for the six-month periods ended June 30, 2006 and 2005 and as
at June 30, 2006, in accordance with standards of the PCAOB as described in
Statement on Auditing Standards No.100 and stating in effect that:
40
(1) in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement
and the Prospectus and reported on by them comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related rules and regulations adopted by the Commission;
(2) on the basis of a reading of the latest unaudited financial
statements made available by the Partnership and its subsidiaries;
their review, in accordance with standards of the PCAOB as described
in Statement on Auditing Standards No. 100, of the unaudited interim
financial information for the six-month periods ended June 30, 2006
and 2005 and as at June 30, 2006; carrying out certain specified
procedures (but not an examination in accordance with generally
accepted auditing standards) which would not necessarily reveal
matters of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the members,
partners, stockholders, directors, managers and committees of the
Teekay Entities; and inquiries of certain officials of the Partnership
who have responsibility for financial and accounting matters of the
Partnership and its subsidiaries as to transactions and events
subsequent to December 31, 2005, nothing came to their attention which
caused them to believe that:
(i) the unaudited interim financial statements for the
six-month periods ended June 30, 2006 and 2005 and as of June 30,
2006 included in the Registration Statement, Preliminary
Prospectus and the Prospectus do not comply as to form in all
material respects with applicable accounting requirements of the
Act and with the related rules and regulations adopted by the
Commission with respect to registration statements on Form F-1;
and any material modifications should be made to said unaudited
financial statements for them to be in conformity with generally
accepted accounting principles applied on a basis substantially
consistent with that of the audited financial statements included
in the Registration Statement, Preliminary Prospectus and the
Prospectus;
(ii) with respect to the period subsequent to June 30, 2006,
there were any changes, at a specified date not more than five
days prior to the date of the letter, in the long-term debt of
Teekay Offshore Partners Predecessor or decreases in the
consolidated net current assets (working capital) or
stockholders' equity of Teekay Offshore Partners Predecessor as
compared with the amounts shown on the June 30, 2006 consolidated
balance sheet included in the Registration Statement, the
Preliminary Prospectus and the Prospectus, or for the period from
July 1, 2006 to such specified date there were any decreases, as
compared with the corresponding period during the preceding year
in consolidated net revenues or net income of Teekay Offshore
Partners Predecessor, except in all instances for changes or
decreases set forth in such letter, in which case the letter
shall be accompanied by an explanation by the Partnership
41
as to the significance thereof unless said explanation is not
deemed necessary by the Representatives; or
(iii) the information included in the Registration
Statement, the Preliminary Prospectus and Prospectus in response
to Form 20-F, Item 3A (Selected Financial Data) and Form 20-F,
Item 6B (Compensation) is not in conformity in all material
respects with the applicable disclosure requirements of Form F-1
and Form 20-F;
(3) they have performed certain other specified procedures as a
result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Partnership and Teekay Offshore
Partners Predecessor) set forth in the Registration Statement,
Preliminary Prospectus and the Prospectus, including the information
set forth under the captions "Summary--Summary Historical and Pro
Forma Financial and Operating Data," "Capitalization," "Dilution,"
"Selected Historical and Pro Forma Financial and Operating Data," and
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Prospectus, agrees with the accounting
records of the Partnership and Teekay Offshore Partners Predecessor,
excluding any questions of legal interpretation; and
(4) on the basis of a reading of the unaudited pro forma
financial statements included in the Registration Statement,
Preliminary Prospectus and the Prospectus (the "pro forma financial
statements"); carrying out certain specified procedures; inquiries of
certain officials of the Teekay Entities who have responsibility for
financial and accounting matters; and proving the arithmetic accuracy
of the application of the pro forma adjustments to the historical
amounts in the pro forma financial statements, nothing came to their
attention which caused them to believe that the pro forma financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of Rule 11-02 of Regulation S-X or
that the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of such statements.
References to the Prospectus in this paragraph 6(j) include any
supplement thereto at the date of the letter.
(k) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any amendment or
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (j) of this
Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the general affairs, management, condition
(financial or otherwise), stockholders' equity, partners' equity, members'
equity, results of operations, business, properties, assets or prospects of
the Partnership Entities taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Disclosure Package and the Prospectus (exclusive of
42
any supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Representatives,
so material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Units as contemplated by the
Registration Statement (exclusive of any amendment thereof), the Disclosure
Package and the Prospectus (exclusive of any amendment or supplement
thereto).
(l) Prior to the Closing Date, the Teekay Entities shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
(m) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the debt securities of any of the
Partnership Entities, if applicable, by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act) or any notice given of any intended or potential decrease in
any such rating or of a possible change in any such rating that does not
indicate the direction of the possible change.
(n) The Units shall have been listed and admitted and authorized for
trading on the NYSE, and satisfactory evidence of such actions shall have
been provided to the Representatives.
(o) At the Execution Time, the Partnership shall have furnished to the
Representatives a letter substantially in the form of Exhibit A hereto from
the executive officers and directors of the General Partner addressed to
the Representatives.
If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Representatives and counsel
for the Underwriters, this Agreement and all obligations of the Underwriters
hereunder may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Partnership
in writing or by telephone or facsimile confirmed in writing.
7. Reimbursement of Underwriters' Expenses. If the sale of the Units
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Teekay Parties to perform any agreement
herein or comply with any provision hereof other than by reason of a default by
any of the Underwriters, the Teekay Parties will reimburse the Underwriters
severally through Citigroup Global Markets Inc. on demand for all out of pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been reasonably incurred by them in connection with the proposed purchase
and sale of the Units.
8. Indemnification and Contribution. (a) The Teekay Parties, jointly
and severally, agree to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls any
43
Underwriter within the meaning of either the Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Units
as originally filed or in any amendment thereof, or in any Preliminary
Prospectus, the Prospectus or any Issuer Free Writing Prospectus or in any
amendment thereof or supplement thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and agrees to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Teekay Parties will not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Teekay Parties by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Teekay Parties may
otherwise have.
(b) The Teekay Parties, jointly and severally, agree to indemnify and
hold harmless Citigroup Global Markets Inc. and the directors, officers,
employees and agents of Citigroup Global Markets Inc. and each person, who
controls Citigroup Global Markets Inc. within the meaning of either the Act
or the Exchange Act (the "Citigroup Entities"), from and against any and
all losses, claims, damages and liabilities to which they may become
subject under the Act, the Exchange Act or other Federal or state statutory
law or regulation, at common law or otherwise (including, without
limitation, any legal or other expenses reasonably incurred in connection
with defending or investigating any such action or claim), insofar as such
losses, claims damages or liabilities (or actions in respect thereof) (i)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the prospectus wrapper material
prepared by or with the consent of the Teekay Parties for distribution in
foreign jurisdictions in connection with the Directed Unit Program attached
to the Prospectus or any preliminary prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statement in
such wrapper material, when considered in conjunction with the Prospectus
or to any applicable preliminary prospectus, not misleading; (ii) caused by
the failure of any Participant to pay for and accept delivery of the
securities which immediately following the Effective Date of the
Registration Statement, were subject to a properly confirmed agreement to
purchase; or (iii) related to, arising out of, or in connection with the
Directed Unit Program, except that this clause (iii) shall not apply to the
extent that such loss, claim, damage or liability is finally judicially
determined to have resulted primarily from the gross negligence or willful
misconduct of any of the Citigroup Entities.
44
(c) [Reserved]
(d) Each Underwriter severally and not jointly agrees to indemnify and
hold harmless the Teekay Parties, each of their respective directors, each
of their respective officers who signs the Registration Statement, and each
person who controls the Teekay Parties within the meaning of either the Act
or the Exchange Act, to the same extent as the indemnity in Section 8(a)
from the Teekay Parties to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the Teekay
Parties by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have. The Teekay Parties acknowledge
that (i) the statements set forth in the last paragraph of the cover page
regarding delivery of the Units and, under the heading "Underwriting", (ii)
the list of Underwriters and their respective participation in the sale of
the Units, (iii) the sentences related to concessions and reallowances and
(iv) the paragraphs related to stabilization, syndicate covering
transactions and penalty bids and electronic online distribution in the
Preliminary Prospectus, the Prospectus and any Issuer Free Writing
Prospectus constitute the only information furnished in writing by or on
behalf of the several Underwriters for inclusion in the Preliminary
Prospectus, the Prospectus and any Issuer Free Writing Prospectus.
(e) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a), (b), (c) or (d)
above unless and to the extent it did not otherwise learn of such action
and such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party other
than the indemnification obligation provided in paragraph (a), (b), (c) or
(d) above. The indemnifying party shall be entitled to appoint counsel of
the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and
45
expenses of any separate counsel retained by the indemnified party or
parties except as set forth below); provided, however, that such counsel
shall be reasonably satisfactory to the indemnified party. Notwithstanding
the indemnifying party's election to appoint counsel to represent the
indemnified party in an action, the indemnified party shall have the right
to employ one separate counsel (in addition to local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably
concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those
available to the indemnifying party, (iii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties (which consent shall not
be unreasonably withheld, conditioned or delayed), settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding. Notwithstanding anything
contained herein to the contrary, if indemnity may be sought pursuant to
Section 8(b) hereof in respect of such action or proceeding, then in
addition to such separate firm for the indemnified parties, the
indemnifying party shall be liable for the reasonable fees and expenses of
not more than one separate firm (in addition to any local counsel) for
Citigroup Global Markets Inc., the directors, officers, employees and
agents of Citigroup Global Markets Inc., and all persons, if any, who
control Citigroup Global Markets Inc. within the meaning of either the Act
or the Exchange Act for the defense of any losses, claims, damages and
liabilities arising out of the Directed Unit Program.
46
(f) In the event that the indemnity provided in paragraph (a), (b),
(c) or (d) of this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party for any reason, the Teekay Parties, severally
and jointly, and the Underwriters, severally, agree to contribute to the
aggregate losses, claims, damages and liabilities (including legal or other
expenses reasonably incurred in connection with investigating or defending
the same) (collectively "Losses") to which one or more of the Teekay
Parties and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received by
the Teekay Parties on the one hand and by the Underwriters on the other
from the Offering; provided, however, that in no case shall any Underwriter
(except as may be provided in any agreement among underwriters relating to
the offering of the Units) be responsible for any amount in excess of the
underwriting discount or commission applicable to the Units purchased by
such Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Teekay Parties and
the Underwriters severally shall contribute in such proportion as is
appropriate to reflect not only such relative benefits but also the
relative fault of the Teekay Parties on the one hand and of the
Underwriters on the other in connection with the statements or omissions
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Teekay Parties shall be deemed to
be equal to the total net proceeds from the Offering (before deducting
expenses) received by it, and benefits received by the Underwriters shall
be deemed to be equal to the total underwriting discounts and commissions,
in each case as set forth on the cover page of the Prospectus. Relative
fault shall be determined by reference to, among other things, whether any
untrue or any alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information
provided by the Teekay Parties on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Teekay Parties and the Underwriters agree that Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated will not receive any additional
benefits from the Teekay Parties hereunder or otherwise for serving as the
Independent Underwriter in connection with the offering and sale of the
Units. The Teekay Parties and the Underwriters agree that it would not be
just and equitable if contribution were determined by pro rata allocation
or any other method of allocation which does not take account of the
equitable considerations referred to above. Notwithstanding the provisions
of this paragraph (f), no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who controls
an Underwriter within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who
controls any of the Teekay Parties within the meaning of either the Act or
the Exchange Act, each officer of the Teekay Parties who shall have signed
the Registration Statement and each director of the Teekay Parties shall
have the same rights to contribution as the Teekay Parties, subject in each
case to the applicable terms and conditions of this paragraph (f).
9. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Units agreed to be purchased by such
Underwriter or
47
Underwriters hereunder and such failure to purchase shall constitute a default
in the performance of its or their obligations under this Agreement, the
remaining Underwriters shall be obligated severally to take up and pay for (in
the respective proportions which the amount of Units set forth opposite their
names in Schedule I hereto bears to the aggregate amount of Units set forth
opposite the names of all the remaining Underwriters) the Units which the
defaulting Underwriter or Underwriters agreed but failed to purchase; provided,
however, that in the event that the aggregate amount of Units which the
defaulting Underwriter or Underwriters agreed but failed to purchase shall
exceed 10% of the aggregate amount of Units set forth in Schedule I hereto, the
remaining Underwriters shall have the right to purchase all, but shall not be
under any obligation to purchase any, of the Units, and if such nondefaulting
Underwriters do not purchase all the Units, this Agreement will terminate
without liability to any nondefaulting Underwriter or the Teekay Parties. In the
event of a default by any Underwriter as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall determine in order that the required changes
in the Registration Statement and the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Teekay Parties and
any nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Partnership
prior to delivery of and payment for the Units, if at any time prior to such
delivery and payment (i) trading in the Partnership's Common Units shall have
been suspended by the Commission or the NYSE or trading in securities generally
on the NYSE shall have been suspended or limited or minimum prices shall have
been established on such exchange, (ii) a banking moratorium shall have been
declared either by Federal or New York State authorities or (iii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war, or other calamity or crisis the
effect of which on financial markets is such as to make it, in the sole judgment
of the Representatives, impractical or inadvisable to proceed with the offering
or delivery of the Units as contemplated by the Preliminary Prospectus or the
Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Teekay Parties or their officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter or the Teekay Parties
or any of the officers, directors, employees, agents or controlling persons
referred to in Section 8 hereof, and will survive delivery of and payment for
the Units. The provisions of Sections 7, 8 and 9 hereof shall survive the
termination or cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Citigroup Global
Markets Inc., at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention:
General Counsel and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, 0 Xxxxx
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000, Attn: Xxxx
48
Xxxxxxxx; or, if sent to the Partnership, will be mailed, delivered or telefaxed
to Teekay Offshore Partners L.P., Bayside House, Bayside Executive Park, West
Bay Street and Xxxxx Xxxx, X.X. Xxx XX-00000, Xxxxxx, Xxxxxxxxxxxx of the
Bahamas, Attn. Corporate Secretary (fax no. 000-000-0000) with a copy to Xxxxxxx
Coie LLP, 0000 X.X. Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxx 00000-0000, Attn:
Xxxxx Xxxxxxxx, (fax no. 000-000-0000).
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. No fiduciary duty. The Partnership hereby acknowledges that (a)
the purchase and sale of the Units pursuant to this Agreement is an arm's-length
commercial transaction between the Partnership, on the one hand, and the
Underwriters and any affiliate through which it may be acting, on the other, (b)
the Underwriters are acting as principal and not as an agent or fiduciary of the
Partnership and (c) the Partnership's engagement of the Underwriters in
connection with the offering and the process leading up to the offering is as
independent contractors and not in any other capacity. Furthermore, the
Partnership agrees that it is solely responsible for making its own judgments in
connection with the offering (irrespective of whether any of the Underwriters
has advised or is currently advising the Partnership on related or other
matters). The Partnership agrees that it will not claim that the Underwriters
have rendered advisory services of any nature or respect, other than financial
advisory services pursuant to a letter agreement of even date herewith, or owe
an agency, fiduciary or similar duty to the Partnership, in connection with such
transaction or the process leading thereto.
15. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Partnership and the
Underwriters, or any of them, with respect to the subject matter hereof.
16. Judicial Proceedings.
(a) The Teekay Parties irrevocably (i) agree that any legal suit,
action or proceeding against the Teekay Parties arising out of or based upon
this Agreement, the transactions contemplated hereby or alleged violations of
the securities laws of the United States or any state in the United States may
be instituted in any New York court, (ii) waive, to the fullest extent it may
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any such proceeding in any New York court and (iii) submits
to the exclusive jurisdiction of such courts in any such suit, action or
proceeding. Each of the Teekay Parties has appointed Xxxxxx, Xxxxxx & Xxxxxxxx,
New York, New York, as its authorized agent (the "Authorized Agent"), upon whom
process may be served in any such action arising out of or based on this
Agreement, the transactions contemplated hereby or any alleged violation of the
securities laws of the United States or any state in the United States which may
be instituted in any New York court, expressly consents to the jurisdiction of
any such court in respect of any such action, and waives any other requirements
of or objections to personal jurisdiction with respect thereto. Such appointment
shall be irrevocable. The Teekay Parties represent and warrant that the
Authorized Agent has agreed to act as such agent for service of process and
agrees to take any and all action, including the filing of any and all documents
and instruments, that may
49
be necessary to continue such appointment in full force and effect as aforesaid.
Service of process upon the Authorized Agent and written notice of such service
to the Teekay Parties shall be deemed, in every respect, effective service of
process upon the Teekay Parties.
(b) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder into any currency other than United
States dollars, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Underwriters could purchase United
States dollars with such other currency in the City of New York on the business
day proceeding that on which final judgment is given. The obligations of the
Teekay Parties in respect of any sum due from it to the Underwriters shall,
notwithstanding any judgment in a currency other than United States dollars, not
be discharged until the first business day, following receipt by the
Underwriters of any sum adjudged to be so due in such other currency, on which
(and only to the extent that) the Underwriters may in accordance with normal
banking procedures purchase United States dollars with such other currency; if
the United States dollars so purchased are less than the sum originally due to
the Underwriters hereunder, the Teekay Parties agree, as a separate obligation
and notwithstanding any such judgment, that the party responsible for such
judgment shall indemnify the Underwriters against such loss. If the United
States dollars so purchased are greater than the sum originally due to the
Underwriters hereunder, the Underwriters agree to pay to the Teekay Parties an
amount equal to the excess of the dollars so purchased over the sum originally
due to the Underwriters hereunder.
17. Applicable Law. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
18. Waiver of Jury Trial. The Partnership hereby irrevocably waives,
to the fullest extent permitted by applicable law, any and all right to trial by
jury in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
19. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
20. Headings. The section headings used herein are for convenience
only and shall not affect the construction hereof.
21. Definitions. The terms that follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
50
"Disclosure Package" shall mean (i) the Statutory Prospectus, (ii) the
Issuer Free Writing Prospectuses, if any, identified in Schedule II hereto and
(iii) any other Free Writing Prospectus that the parties hereto shall hereafter
expressly agree in writing to treat as part of the Disclosure Package.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or becomes effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"FCPA" means the Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder.
"Free Writing Prospectus" shall mean a free writing prospectus, as
defined in Rule 405.
"Issuer Free Writing Prospectus" shall mean an issuer free writing
prospectus, as defined in Rule 433.
"Preliminary Prospectus" shall mean any preliminary prospectus
referred to in Section 1(a) above and any preliminary prospectus included in the
Registration Statement at the Effective Date that omits Rule 430A Information.
"Prospectus" shall mean the prospectus relating to the Units that is
first filed pursuant to Rule 424(b) after the Execution Time.
"Registration Statement" shall mean the registration statement
referred to in Section 1(a) above, including exhibits and financial statements
and any prospectus supplement relating to the Units that is filed with the
Commission pursuant to Rule 424(b) and deemed part of such registration
statement pursuant to Rule 430A, as amended at the Execution Time and, in the
event any post-effective amendment thereto or any Rule 462(b) Registration
Statement becomes effective prior to the Closing Date, shall also mean such
registration statement as so amended or such Rule 462(b) Registration Statement,
as the case may be.
"Rule 158", "Rule 163", "Rule 164", "Rule 172", "Rule 405", "Rule
415", "Rule 424", "Rule 430A", "Rule 433" and "Rule 462" refer to such rules
under the Act.
"Rule 430A Information" shall mean information with respect to the
Units and the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A.
51
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating to
the offering covered by the registration statement referred to in Section 1(a)
hereof.
"Statutory Prospectus" shall mean the preliminary prospectus relating
to the Units that is included in the Registration Statement relating to the
Units immediately prior to the Execution Time, including any document that is
incorporated by reference therein.
52
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Teekay Parties and the several Underwriters.
53
Very truly yours,
TEEKAY SHIPPING CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TEEKAY OFFSHORE PARTNERS L.P.
By: Teekay Offshore GP L.L.C., its
general partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TEEKAY OFFSHORE GP L.L.C.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TEEKAY OFFSHORE OPERATING GP L.L.C.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
TEEKAY OFFSHORE OPERATING L.P.
54
By: Teekay Offshore Operating GP L.L.C.,
its general partner
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
55
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
Citigroup Global Markets Inc.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By: Citigroup Global Markets Inc.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By: Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
For themselves and the other several
Underwriters named in Schedule I to
the foregoing Agreement.
56
