EXHIBIT 10(a)
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TRANSFER AGREEMENT
AGREEMENT, dated October 30, 1998, between Overseas
Shipholding Group, Inc., a Delaware corporation ("OSG"), OSG Ship
Management, Inc., a Delaware corporation ("OSGM"), and Maritime
Overseas Corporation, a New York corporation ("MOC").
WHEREAS, MOC, under various agreements with the OSG and
various shipowning subsidiaries of OSG (the "OSG Subsidiaries"
and, collectively with OSG and OSGM, the "OSG Companies"), acts
as agent in respect of the operation of ships owned by certain
OSG Subsidiaries and provides general and administrative services
required by the OSG Companies;
WHEREAS, MOC also acts as exclusive chartering broker and as
exclusive broker in connection with sales, purchases and
construction of ships owned by certain OSG Subsidiaries;
WHEREAS, OSG has determined that it is in its best interest
to assume direct management and operation of its bulk shipping
fleet, terminating its arrangements with MOC by mutual consent,
but obtaining for itself MOC's valuable staff and infrastructure,
thereby ensuring that the high quality of operations and customer
satisfaction historically enjoyed by OSG will be maintained;
WHEREAS, MOC and OSG have determined to terminate by mutual
consent the arrangements between MOC and the OSG Companies,
effective at the close of business on October 30, 1998 (the
"Effective Time"), and have agreed upon the other matters set
forth herein.
NOW, THEREFORE, it is agreed that:
1. TERMINATION OF AGENCY AGREEMENTS. All of the Agency
Agreements between MOC and the OSG Subsidiaries (the "Agency
Agreements") are hereby terminated effective at the Effective
Time, provided that the provisions set forth in Section 10 of the
respective Agency Agreements (relating, among other things, to
rights of indemnification and exculpation) shall remain in full
force and effect notwithstanding such termination. The OSG
Companies hereby agree to take over as of the Effective Time all
outstanding matters with respect to the Vessels (as such term is
defined in the respective Agency Agreements). MOC shall
cooperate with the OSG Companies and with any successor agent
whom the OSG Companies may appoint, to effect the prompt and
effective transfer of all records, funds and duties and
thereafter MOC shall be permitted to inspect all such records at
reasonable times during normal business hours.
2. TERMINATION OF GENERAL SERVICES AGREEMENT. That
certain General Services Agreement, dated December 31, 1969, as
amended, between OSG and MOC (the "General Services Agreement")
is hereby terminated effective at the Effective Time, provided
that the provisions set forth in Section 7 of the General
Services Agreement (relating, among other things, to rights of
indemnification and exculpation) shall remain in full force and
effect notwithstanding such termination. The Accounting provided
under Section 5(f) of the General Services Agreement shall be
prepared as promptly as practicable following the Effective Time
for the period January 1, 1998 through the Effective Time, with
(i) any over-payment or underpayment of fees to be refunded or
paid, as the case may be, pursuant to Section 6 of the General
Services Agreement and (ii) any refund of excess fees under
Section 5(e) of the General Services Agreement to be made, in
each case not later than 30 days following the presentation of
the Accounting. The agreed maximum MOC consolidated net income
from shipping operations shall be calculated for the period
January 1, 1998 through the Effective Time by multiplying the
agreed maximum for 1998 by a fraction the numerator is the number
of days elapsed during 1998 through the Effective Time and the
denominator of which is 365. In the event that after the
Effective Time MOC incurs a cost which relates to a period prior
to the Effective Time, which was not reflected as a liability on
MOC's balance sheet as of the Effective Time, and which would
have been a cost of shipping operations for which MOC would have
been compensated under the General Services Agreement had it been
so reflected, MOC shall, notwithstanding the termination of the
General Services Agreement, receive compensation for such cost in
accordance with the provisions of the General Services Agreement
as though such cost had been so reflected on such balance sheet.
3. ALLOCATION OF COMMISSIONS. Brokerage commissions shall
be allocated between MOC and OSGM as follows: Brokerage
commissions for voyage charters fixed on or prior to the
Effective Time shall be allocated to MOC; brokerage commissions
for voyage charters fixed thereafter shall be allocated to OSGM.
Brokerage commissions for time charters in effect at the
Effective Time shall be allocated between MOC and OSGM based on
the relative the periods of time covered by such charters before
and after the Effective Time. To the extent necessary to
effectuate the foregoing, or otherwise as the parties shall agree
to be appropriate, MOC shall assign (or shall, if applicable,
cause its subsidiaries to assign) to OSGM as of the Effective
Time the brokerage and other commissions which are due and
payable to MOC or such subsidiaries after the Effective Time in
accordance with the terms of the General Services Agreement or
the Agency Agreements, as the case may be.
4. MOC SUBSIDIARIES.
(a) PURCHASE OF SUBSIDIARIES. Effective at the
Effective Time, or, in the case of Xxxxxx Shipping (Bermuda)
Ltd., a Bermuda corporation ("Xxxxxx"), at December 31, 1998 (the
"Xxxxxx Effective Time"), OSGM shall purchase from MOC, and MOC
shall sell to OSGM, all of the outstanding shares (the "MOC
Subsidiary Shares") of capital stock of Maritime Overseas Company
Limited, an English corporation ("MOCL"), Maritime Overseas
Company Asia-Pacific Pte. Ltd., a Singapore corporation
("MOCAP"), and Xxxxxx (Xxxxxx, MOCL and MOCAP being sometimes
herein collectively referred to as the "Purchased MOC
Subsidiaries") for a cash purchase price (the "Subsidiary
Purchase Price") payable at the Closing (as hereinafter defined),
or, in the case of Xxxxxx, at the Xxxxxx Closing (as hereinafter
defined), equal to the respective book values of such shares. At
the Closing or the Xxxxxx Closing, as the case may be, the
parties shall agree on a good faith estimate of such respective
book values and make payment based on such estimate. Promptly
after the completion of MOC's audited financial statements as of
October 30, 1998 and for the period then ended (or, in the case
of Xxxxxx, as of December 31, 1998 and for the year then ended),
the parties shall finalize their calculation of such respective
book values and make such payments as may be necessary to adjust
the estimated payments made at the Closing or the Xxxxxx Closing,
as the case may be. At the Closing or the Xxxxxx Closing, as the
case may be, MOC shall deliver to OSGM certificates representing
all of the MOC Subsidiary Shares, accompanied by stock powers
duly executed in blank, with payment of all applicable transfer
taxes, free and clear of all liabilities, options, contractual or
other restrictions or obligations, liens, claims, security
interests, mortgages and encumbrances (collectively, "Liens").
(b) CHANGE OF NAME OF SUBSIDIARIES. OSGM shall
reasonably promptly after the Effective Time cause MOCL to change
its name to Overseas Shipholding Group Limited, and MOCAP to
change its name to Overseas Shipholding Group Asia Pacific Pte.
Ltd.
5. ASSUMPTION OF LEASE OBLIGATIONS. Effective at the
Effective Time, MOC shall assign to OSG and OSG shall assume the
obligations and liabilities of MOC accruing after the Effective
Time under those certain leases identified on Schedule 5 hereto
(the "Assigned Leases"), pursuant to instruments of assignment
and assumption of lease mutually agreed upon by MOC and OSG and
their respective landlords and to be executed and delivered prior
to or at the Closing.
6. PURCHASE OF FIXED AND OTHER ASSETS. Effective at the
Effective Time, MOC shall sell, assign, convey and deliver to
OSGM, and OSGM shall purchase from MOC, for an aggregate
estimated cash purchase price of $4,000,000 payable at the
Closing (representing the estimated book value of the Fixed
Assets, as such term is defined below), all of MOC's right, title
and interest in (i) all of the tangible assets owned by MOC and
held by MOC at the Effective Time, including without limitation
all of MOC's computer, telephone and other equipment, fixtures,
leasehold improvements, furniture and other tangible personal
property, excluding, however, such items as may be mutually
agreed upon (the "Fixed Assets"); (ii) all rights under the
contracts, agreements, licenses, leases and instruments agreed
upon by MOC and OSGM (the "Assigned Contracts"); and (iii) all
registrations, permits, authorizations, files, records,
trademarks, trade names, service marks, copyrights, applications
or agreements for any of the foregoing, goodwill, know-how,
software, computer programs, other electronic systems and
databases, all proprietary processes, operating procedures, other
documents and information, and other intellectual property agreed
upon by MOC and OSGM (the "Intangible Assets", and collectively
with the Fixed Assets and Assigned Contracts, the "Assets"), all
of the Assets to be free and clear of all Liens, except as
expressly assumed by the OSG Companies pursuant to this
Agreement. Promptly after the completion of MOC's audited
financial statements as of October 30, 1998 and for the period
then ended (the "Audited Statements"), the parties shall finalize
the purchase price referred to in the immediately preceding
sentence and make such payment as shall be necessary to adjust
such estimated payment to the actual amount reflected in MOC's
Audited Statements (such purchase price as so adjusted is
sometimes collectively herein referred to with the Subsidiary
Purchase Price as the "Purchase Price"). MOC shall deliver to
OSGM at the Closing such bills of sale, and other instruments of
assignment and conveyance as shall be reasonably satisfactory to
OSGM to convey to OSGM good and marketable title to the Assets
free and clear of all Liens, except as permitted herein.
7. CERTAIN ASSUMED LIABILITIES.
(a) ASSUMPTION OF LIABILITIES. Effective at the
Effective Time, OSGM shall assume, and hereby agrees to pay,
perform, satisfy or discharge all unperformed and unfulfilled
obligations and liabilities which are required to be performed
and fulfilled by MOC after the Effective Time under the terms of
all Assigned Contracts and for which MOC was not compensated
under the General Services Agreement (collectively, the "Assumed
Liabilities").
(b) INSTRUMENTS OF ASSUMPTION. OSGM shall deliver to
MOC at the Closing such agreements and instruments of assumption
as shall be reasonably satisfactory to MOC to provide for the
assumption and performance by OSGM of the Assumed Liabilities.
(c) NO OTHER ASSUMPTIONS. Except as expressly
provided in this Agreement, no OSG Company shall assume, agree to
perform or discharge, indemnify MOC against, or otherwise have
any responsibility for any other liabilities or obligations of
MOC or any direct or indirect subsidiary or other affiliate
thereof, fixed or contingent, known or unknown, matured or
unmatured, liquidated or unliquidated, secured or unsecured, and
whether arising prior to, on or after the Effective Time.
8. REPRESENTATIONS AND WARRANTIES OF MOC. MOC hereby
represents and warrants to the OSG Companies:
(a) ORGANIZATION, STANDING AND POWER. Each of MOC,
the Purchased MOC Subsidiaries and Xxxxxx Shipping Limited, an
English corporation, East Coast Gaugings Limited, an English
corporation, and Union Shipping Corporation, a Japanese
corporation (collectively the "Xxxxxx Subsidiaries"; MOC, the
Purchased MOC Subsidiaries and the Xxxxxx Subsidiaries being
sometimes herein collectively referred to as the "MOC Companies")
is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and
has the power and authority to own, lease and operate its
properties and to conduct its business as now being conducted.
Each of the MOC Companies is duly qualified or licensed to do
business and is in good standing as a foreign corporation in each
jurisdiction in which the failure to so qualify would have a
material adverse impact on the consummation by the MOC Companies
of the transactions contemplated hereunder or, in the case of the
Purchased MOC Subsidiaries and Xxxxxx Subsidiaries (collectively,
the "MOC Subsidiaries") on the business, condition or properties
of the MOC Subsidiaries taken as a whole.
(b) LEGAL AUTHORITY, BINDING EFFECT. Each MOC Company
has, and shall at the Effective Time or the Xxxxxx Effective
Time, as applicable, have, the right, power and authority to
execute, deliver and perform this Agreement and the other
documents, certificates and instruments relating hereto
(collectively, the "MOC Transfer Documents") to be executed and
delivered by such MOC Company in connection herewith and to
consummate the transactions contemplated hereunder and
thereunder. This Agreement does, and when executed by the
applicable MOC Company, the other MOC Transfer Documents shall,
constitute legal, valid and binding obligations of the applicable
MOC Company, enforceable against such MOC Company in accordance
with their respective terms. MOC and each other applicable MOC
Company has duly authorized by all necessary corporate action the
execution, delivery and performance of this Agreement and the
transactions contemplated hereby.
(c) NO CONFLICTS, ETC. Neither the execution,
delivery or performance of this Agreement, nor any of the other
MOC Transfer Documents, nor the consummation by any of the MOC
Companies of the transactions contemplated hereby or thereby, nor
compliance with any of the provisions hereof or thereof, will:
(i) conflict with or result in a breach of the Certificate of
Incorporation or By-Laws or similar organizational document of
such MOC Company; (ii) violate any Law (as defined below) or any
order, writ, injunction or decree of any court or Government (as
defined below); (iii) violate or conflict with, result in any
breach of, constitute a default under, give rise to any right of
termination or acceleration of, or require any consent, approval
or other action of any third party, under any Assigned Contract,
Assigned Lease or Subsidiary Lease (as such term is defined
below) (the Assigned Contracts, Assigned Leases and Subsidiary
Leases being sometimes herein collectively referred to as the
"MOC Contracts"). Other than such approvals as shall have been
obtained and such notifications as shall have been given in a
timely fashion, no approval of or notification to any Government
is required in connection with the execution, delivery or
performance by any MOC Company of this Agreement or any MOC
Transfer Document or the consummation of the transactions
contemplated hereby or thereby.
(d) TITLE TO PROPERTY AND RELATED MATTERS. MOC has
good and marketable title to all the Assets, and OSGM shall have
good and marketable title to all the Assets at the Effective
Time, free and clear of all material Liens except as created by
OSGM. The Fixed Assets are in adequate working order to permit
the operation thereof consistent with MOC's historical practices.
(e) SUBSIDIARIES. The MOC Subsidiary Shares are all
of the issued and outstanding shares of capital stock of the
Purchased MOC Subsidiaries. MOC has good and marketable title to
all the MOC Subsidiary Shares, and OSGM shall have good and
marketable title to all the MOC Subsidiary Shares at the
Effective Time or the Xxxxxx Effective Time, as applicable, free
and clear of all Liens except as created by OSGM. Xxxxxx has
good and marketable title, and shall have good and marketable
title at the Xxxxxx Effective Time, to all of the shares of
capital stock of Xxxxxx Shipping Limited and East Coast Gaugings
Limited, and 50% of the shares of capital stock of Union Shipping
Corporation (the shares of which are held subject to contractual
provisions heretofore disclosed by MOC to OSG), free and clear of
all Liens except as created by OSGM (the shares of capital stock
of the Xxxxxx Subsidiaries held by Xxxxxx being sometimes herein
referred to as the "Xxxxxx Subsidiary Shares"). There are no
options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued
capital stock of any MOC Subsidiary or obligating any MOC
Subsidiary to issue or sell any shares of capital stock of, or
other equity interests in, any MOC Subsidiary. There are no
outstanding contractual obligations of any MOC Subsidiary to
repurchase, redeem or otherwise acquire any shares of its capital
stock or make any material investment (in the form of a loan,
capital contribution or otherwise) in any other person or entity.
All of the MOC Subsidiary Shares and Xxxxxx Subsidiary Shares
have been duly authorized and validly issued and are fully paid
and nonassessable and not subject to preemptive rights. The
financial statements for the MOC Subsidiaries made available to
OSG fairly present, in all material respects, the consolidated
assets and liabilities of the MOC Subsidiaries as at the dates
indicated therein; changes in such assets and liabilities since
such dates have not been material and such changes have been in
the ordinary course of business of the MOC Subsidiaries.
(f) LEASES. Each of the Assigned Leases, and each of
the leases for real property under which an MOC subsidiary is a
lessee (collectively, the "Subsidiary Leases" and with the
Assigned Leases, the "MOC Leases"), is legal, valid and binding
as between MOC or other lessee thereunder (each, an "MOC
Lessee"), and the other party or parties thereto, and the
applicable MOC Lessee is a tenant or possessor in good standing
thereunder, free of any material default or breach and quietly
enjoys the premises provided for therein. Each rental and other
payment due thereunder has been duly made; each material act
required to be performed has to the best of the knowledge of the
applicable MOC Lessee, been duly performed; and, to the best of
the knowledge of the applicable MOC Lessee, no material act
forbidden to be performed has been performed thereunder. The
applicable MOC Lessee has the legal right (without the consent or
other approval of any other party) to possess and quietly enjoy
each of such premises and properties under MOC Lease to which it
is a party.
(g) LITIGATION, ETC. Other than actions, suits,
claims, proceedings and investigations (collectively,
"Proceedings") (i) heretofore disclosed by MOC to OSG or (ii)
arising in the ordinary course of business of MOC and covered by
appropriate insurance, there are no Proceedings pending or, to
the best knowledge of any MOC Company, threatened against or
directly affecting the business or affairs of any MOC Company
(insofar as they relate to the services rendered to the OSG
Companies), the employees of MOC (including any Proceedings by
such employees), the Assets, the MOC Leases or the MOC
Subsidiaries, at law or in equity, before or by any court,
commission, board, bureau, agency, instrumentalities or other
foreign, federal, state, local or other governmental authority
("Government"), which if adversely determined would have a
material adverse effect on the business or affairs of MOC and its
subsidiaries taken as a whole. There is no outstanding order,
injunction or decree of any court or Government against or
directly affecting any MOC Company, the employees thereof, or the
Assets, the MOC Leases or the MOC Subsidiaries.
(h) CONTRACTS, ETC. All MOC Contracts are in full
force and effect and constitute legal, valid and binding
obligations of the respective parties thereto; the applicable MOC
Company has performed all material obligations required to be
performed by it under the MOC Contracts and no material default,
or event which with notice or lapse of time or both would
constitute a material default, exists in respect thereof on the
part of the applicable MOC Company or, to the best of the
knowledge of the applicable MOC Company, the other parties
thereto; and the continuation, validity and effectiveness of all
MOC Contracts under the current material terms thereof (including
without limitation the current rentals or royalties under any
leases or licenses) will not be adversely affected in any
material respect by the consummation of the transactions
contemplated by this Agreement or, if any would be affected
without a consent or waiver, MOC shall cause an appropriate
consent or waiver respecting such transfer to be delivered to
OSGM prior to the Effective Time.
(i) COMPLIANCE; GOVERNMENTAL AUTHORIZATIONS. Except
as previously disclosed to OSG, no MOC Company has during the
past three years has received any notice asserting or charging
that it is not in material compliance with any foreign, federal,
state or local laws, statutes, ordinances, rules, regulations and
orders ("Laws") applicable to the operation, conduct or ownership
of its business insofar as it relates to the OSG Companies, MOC's
employees, the Assets, the MOC Leases and/or the MOC
Subsidiaries, including without limitation matters relating to
the environment, anti-competitive practices, improper payments,
discrimination, employment, health and safety (including but not
limited to the Occupational Safety and Health Act ("OSHA"), the
Clean Water Act, the Clean Air Act, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the Comprehensive
Environmental Response, Compensation and Liability Act, the Oil
Pollution Act of 1990, the Equal Employment Opportunity Act
("EEOC") or any amendments thereto). The MOC Companies have, to
the best of their knowledge, all material foreign, federal, state
and local Government licenses, permits, approvals, authorizations
and consents ("Permits") necessary in the conduct of their
business insofar as it relates to the OSG Companies, and such
Permits are in full force and effect, and no notices of violation
have been received by an MOC Company in respect of any thereof,
and no Proceeding (other than any Proceeding heretofore disclosed
by MOC to OSG) is pending or, to the best of the knowledge of any
MOC Company, threatened to revoke or limit any thereof. MOC has
heretofore provided to OSG an accurate list of: (1) all such
Permits (none of which will be adversely affected in any material
respect by the consummation of the transactions contemplated
hereby unless otherwise indicated on said Schedule) and (2) all
consents, orders, decrees and other compliance agreements under
which any MOC Company is operating or bound, copies of all of
which have been furnished to OSG. Within the past three years,
no MOC Company has entered into any agreement with, or had any
material dispute with, any Government or other third party that
could reasonably be expected to restrict the operation of its
business insofar as it relates to the OSG Companies.
(j) LABOR RELATIONS: EMPLOYEES.
(i) MOC has heretofore provided to OSGM an
accurate list of the names and base compensation rates of the
employees of MOC and the Purchased MOC Subsidiaries as of
September 30, 1998.
(ii) No strike or labor dispute involving the MOC
Companies has occurred during the last three years or, to the
knowledge of the MOC Companies, is threatened. None of the
employees of the MOC Companies are represented by a union, and
none of the MOC Companies are a party to any collective
bargaining agreement.
(iii) To the knowledge of the MOC Companies, there
are no: (A) unfair labor practices charges or complaints against
any of the MOC Companies pending or threatened before the
National Labor Relations Board or any similar state or foreign
agency; (B) charges with respect to or relating to any of the MOC
Companies pending or threatened before the Equal Employment
Opportunity Commission or any other similar agency; or (C)
Proceedings relating to any of the MOC Companies pending or
threatened in connection with the enforcement of labor or
employment laws.
(k) ERISA.
(i) MOC has heretofore provided to OSGM an
accurate list of all "employee benefit plans," within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and any other bonus, severance,
change of control, deferred compensation, supplemental executive
retirement, insurance, health or welfare benefit, post-retirement
health or welfare benefit, stock option, fringe benefit or other
plan or agreement or payroll practice, currently maintained,
sponsored, or contributed to by any of the MOC Companies on
behalf of any employee of MOC or the Purchased MOC Subsidiaries
or such employees' beneficiaries (each a "Plan" and,
collectively, the "Plans"), including, without limitation, any
single employer pension plan (within the meaning of Section
4001(a)(15) of ERISA) which is subject to Sections 4063 and 4064
of ERISA ("Multiple Employer Plan"). With respect to each Plan,
a copy of the document embodying the Plan has been delivered or
made available to OSG and OSGM.
(ii) Each Plan intended to be qualified under Section 401(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), has
received a favorable determination letter from the Internal
Revenue Service (the "IRS") that the Plan is qualified and that
its related trust has been determined to be exempt from taxation
under Section 501(a) of the Code. Neither MOC nor any of the
Purchased MOC Subsidiaries has withdrawn from or terminated
participation in any Multiple Employer Plan within the past three
years.
(iii) None of the MOC Companies maintains,
sponsors or contributes to or has maintained, sponsored or
contributed to any multiemployer plan within the meaning of
Section 3(37) of ERISA.
(iv) To the knowledge of the MOC Companies, each
MOC Company has, performed all material obligations required to
be performed under, and is in material compliance with, the terms
of each Plan and the requirements applicable to each Plan
prescribed by ERISA and the Code. All contributions required or
payments due and owing under each Plan, trust or otherwise
required by law with respect to all periods through the Effective
Time will be timely made.
(v) Neither MOC nor any of the MOC Companies, is
aware of any lawsuit or claim (other than routine claims for
benefits, and appeals of such claims) that in the last three
years has been asserted or instituted against any Plan or its
fiduciaries with regard to any such Plan.
(vi) To the knowledge of MOC and the other MOC
Companies, no Plan is under audit by the Internal Revenue Service
or the Department of Labor.
(vii) The consummation of the transactions
contemplated by the Agreement will not accelerate the time of
payment or vesting or increase the amount of compensation or
benefits due to any officer, director or employee of any of the
MOC Companies.
9. REPRESENTATIONS AND WARRANTIES OF OSG. OSG hereby
represents and warrants:
(a) ORGANIZATION. The OSG Companies are each
corporations duly organized, validly existing and in good
standing under the laws of their respective jurisdictions of
incorporation.
(b) ORGANIZATION, STANDING AND POWER. Each of the OSG
Companies is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of
incorporation. OSG is duly qualified or licensed to do business
and is in good standing as a foreign corporation in each
jurisdiction in which the failure to so qualify would have a
material adverse impact on the consummation by the OSG Companies
of the transactions contemplated hereunder.
(c) LEGAL AUTHORITY, BINDING EFFECT. Each OSG Company
has and shall have at the Effective Time or the Xxxxxx Effective
Time, as the case may be, the right, power and authority to
execute, deliver and perform this Agreement and the other
documents, certificates and instruments relating hereto
(collectively the "OSG Transfer Documents") to be executed and
delivered by such OSG Company in connection herewith and to
consummate the transactions contemplated hereunder and
thereunder. This Agreement does, and when executed by the
applicable OSG Company, the other OSG Transfer Documents shall,
constitute legal, valid and binding obligations of the applicable
OSG Company, enforceable against such OSG Company in accordance
with their respective terms. OSG and each other applicable OSG
Company has duly authorized by all necessary corporate action the
execution, delivery and performance of this Agreement and the
transactions contemplated hereby.
(d) NO CONFLICTS, ETC. Neither the execution,
delivery or performance of this Agreement, nor any of the other
OSG Transfer Documents, nor the consummation by any of the OSG
Companies of the transactions contemplated hereby or thereby, nor
compliance with any of the provisions hereof or thereof, will:
(i) conflict with or result in a breach of the Certificate of
Incorporation or By-Laws or similar organizational document of
such OSG Company; (ii) violate any Law or any order, writ,
injunction or decree of any court or Government; (iii) violate or
conflict with, result in any breach of, constitute a default
under, give rise to any right of termination or acceleration of,
or require any consent, approval or other action of any third
party, under any material agreement of such OSG Company. Other
than such approvals as shall have been obtained and such
notifications as shall have been given in a timely fashion, no
approval of or notification to any Government is required in
connection with the execution, delivery or performance by any OSG
Company of this Agreement or any OSG Transfer Document or the
consummation of the transactions contemplated hereby or thereof.
(e) LITIGATION. There are no Proceedings pending, or,
to the best of the knowledge of any OSG Company, threatened
against or affecting the business or affairs of any OSG Company,
at law, or in equity, before or by any court or Government,
wherein an unfavorable judgment, decree or order would restrain,
prohibit, invalidate, set aside, rescind, prevent or make
unlawful this Agreement or the carrying out of this Agreement or
the transactions contemplated by this Agreement.
10. COVENANTS OF MOC.
(a) CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME.
MOC agrees that from the date hereof until the Effective Time
(or, insofar as such matters pertain to Xxxxxx or the Xxxxxx
Subsidiaries, until the Xxxxxx Effective Time), except as
required or contemplated by this Agreement or as otherwise
consented to or approved by OSG, such consent not to be
unreasonably withheld:
(i) The business of the MOC Companies shall be
operated in the ordinary course of business consistent with
present practices.
(ii) The MOC Companies shall not enter into any
contract relating to employment, compensation or benefits or
enter into or amend any employee benefit plan.
(iii) The MOC Companies shall maintain in effect
all insurance policies with respect to their business and
properties of the type and in amounts consistent with present
practice.
(iv) The MOC Companies shall maintain and
preserve the Assets (and the assets of the MOC Subsidiaries)
consistent with prior practice and shall not dispose of or
subject to any Liens any Assets (or assets of the MOC
Subsidiaries) other than in the ordinary course of business,
shall not dispose of or subject to any Liens any MOC Subsidiary
Shares, and shall not permit the issuance of nor any agreement to
issue any shares of capital stock of any MOC Subsidiary.
(v) The MOC Companies shall comply in all
material respects with provisions of Law and the MOC Contracts.
(vi) The MOC Companies shall not knowingly take
any action which would make materially untrue any of the
representations or warranties of MOC pursuant to this Agreement.
(b) CHANGE OF INFORMATION. MOC shall give OSG
reasonably prompt notice of any material change in any of the
information contained in the representations and warranties of
MOC hereunder or the Schedules hereto which occurs prior to the
Effective Time or, insofar as such information pertains to Xxxxxx
or the Xxxxxx Subsidiaries, prior to the Xxxxxx Effective Time.
11. REASONABLE EFFORTS; APPROVALS. Upon the terms and
subject to the conditions hereof, each of the parties hereto
agrees to use all reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws and the MOC
Contracts to consummate and make effective the transactions
contemplated by this Agreement, including using its reasonable
efforts to obtain all necessary waivers, consents and approvals
and affecting all necessary registrations and filings.
12. EMPLOYEES AND EMPLOYEE BENEFITS.
(a) At such time prior to the Effective Time as
mutually agreed by MOC and OSGM, OSGM shall make an offer of
employment, effective as of the Effective Time, to all employees
of MOC and the Purchased MOC Subsidiaries. All such employees
who accept or do not affirmatively decline OSGM's offer of
employment within ten business days after the Effective Time will
become employees of OSGM as of the Effective Time. The employees
to be employed by OSGM are referred to collectively as the
"Transferred Employees".
(b) As of the Effective Time, unless otherwise agreed
by the parties hereto, OSGM shall assume and/or become the
sponsor of each of the Plans. With respect to the stock option
plan maintained by MOC and previously disclosed by MOC to OSG, as
of the Effective Time, OSG shall assume all outstanding option
grants thereunder. Nothing described herein shall limit the
ability of OSGM or OSG, as the case may be, to amend or terminate
the Plans at any time on or after the Effective Time. To the
extent that OSGM provides employee benefits to the Transferred
Employees under plans sponsored or maintained by OSGM, nothing
contained in this Section 12 shall cause or result in the
Transferred Employees receiving, or being eligible to receive,
duplicate benefits.
(c) As of the Effective Time, OSGM shall adopt a basic
supplemental executive retirement plan (the "OSGM Basic SERP")
and a supplemental executive retirement plan plus (the "OSGM SERP
Plus") substantially in the forms of the respective supplemental
executive retirement plans maintained by MOC (the "MOC Basic
SERP" and the "MOC SERP Plus", as applicable). Except as
provided in the following sentence, the OSGM Basic SERP and the
OSGM SERP Plus shall recognize all compensation from and service
with MOC or its affiliates recognized by MOC or its affiliates
under the MOC Basic SERP and the MOC SERP Plus, as applicable.
Notwithstanding the foregoing, to the extent any participant
under the MOC Basic SERP does not waive his or her rights to
benefits under the MOC Basic SERP, OSGM shall assume the MOC
Basic SERP and the obligations thereunder and shall not recognize
compensation for and service with MOC or its affiliates under the
OSGM Basic SERP.
(d) Except as provided in (c) above, OSGM shall ensure
that any employee benefit plan or compensation arrangement
established, maintained or contributed to by OSGM or any of its
affiliates, will grant full credit for all service or employment
with MOC and any of its affiliates recognized by MOC or its
affiliates under a similar employee benefit plan sponsored by MOC
or its affiliates prior to the Effective Time, to the extent
applicable, for purposes of eligibility, vesting and benefit
accrual. OSGM shall ensure that any Plan which it assumes or
becomes the replacement sponsor of, including, without
limitation, any qualified defined benefit plan, qualified defined
contribution plan or supplemental executive retirement plan
sponsored by MOC, shall recognize service for purposes of
eligibility, vesting and benefit accrual to the same extent such
service had been recognized prior to the Effective Time under the
applicable Plan.
(e) As of the Effective Time, OSGM shall cause any
employee welfare benefit plan, as defined in Section 3(1) of
ERISA, which it establishes or maintains ("OSGM Welfare Plan"),
to the extent such OSGM Welfare Plan is a plan under which the
Transferred Employees were not eligible prior to the Effective
Time, but under which the Transferred Employees will participate
as of the Effective Time, to waive any pre-existing condition
exclusions, evidence of insurability provisions, waiting periods
(except to the extent that such exclusions would have then
applied or such waiting periods were not satisfied under MOC's
health plans) or any similar provisions with respect to
Transferred Employees (and their dependents or other
beneficiaries) after the Effective Time. For purposes of
computing deductible amounts, co-pays or other maximums under any
OSGM Welfare Plan, expenses and claims recognized prior to the
Effective Time for similar purposes under the applicable welfare
plan of MOC or any MOC Company shall be credited or recognized
under OSGM's Welfare Plan.
(f) None of OSG, OSGM nor the MOC Companies intend
this Section 12 to create any rights or interest except as
between OSGM and the MOC Companies and no present or future
employees of either party (or any dependents of such employees)
will be treated as third party beneficiaries in or under this
Section.
(g) OSGM shall be responsible for satisfying any and
all obligations under the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA") to provide COBRA
continuation coverage to current and former employees of MOC and
the Purchased MOC Subsidiaries and their beneficiaries
(regardless of whether the employee or beneficiary experiences a
"qualifying event" (as defined in COBRA) prior to, on or after
the Effective Time).
13 CONDITIONS PRECEDENT TO OSG AND OSGM'S OBLIGATIONS. All
obligations of OSG and OSGM under this Agreement are subject to
the fulfillment and satisfaction, prior to or at the Effective
Time (or, in the case of the purchase and sale of the shares of
Xxxxxx, the Xxxxxx Effective Time), of each of the following
conditions, any one or more of which may be waived by OSG:
(a) CONVEYANCE OF ASSETS, ETC. All of the Assets, MOC
Subsidiary Shares and Assigned Leases shall have been conveyed,
transferred and assigned to the applicable OSG Company, in
accordance with this Agreement, which conveyances, transfers and
assignments shall have been effected by bills of sale,
endorsements, assignments and other instruments of transfer and
conveyance, reasonably satisfactory to OSG, and the MOC Contracts
and Intangible Assets shall be unimpaired by the consummation of
the transactions contemplated hereby.
(b) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties of MOC contained in this Agreement
shall be deemed to have been made again at and as of the
Effective Time or the Xxxxxx Effective Time, as applicable, and
shall then be true and correct in all material respects, and at
the Closing and the Xxxxxx Closing MOC shall have delivered to
OSG a certificate to such effect signed by an executive officer
of MOC.
(c) MOC'S PERFORMANCE. Each of the obligations of
each MOC Company to be performed by each of them at or before the
Effective Time or the Xxxxxx Effective Time, as applicable,
pursuant to the terms of this Agreement shall have been performed
in all material respects at or before the Effective Time or the
Xxxxxx Effective Time, as applicable, and at the Closing and the
Xxxxxx Closing MOC shall have delivered to OSG a certificate to
such effect signed by an executive officer thereof.
(d) AUTHORITY. All action required to be taken by or
on the part of any MOC Company to authorize the execution,
delivery and performance of this Agreement and all other MOC
Transfer Documents by the MOC Companies, and the consummation of
the transactions contemplated hereby and thereby, shall have been
duly and validly taken by the Board of Directors and shareholders
of the respective MOC Companies, and at the Closing and the
Xxxxxx Closing MOC shall have delivered to OSG a certificate to
such effect signed by an executive officer thereof.
(e) CONSENTS. MOC shall have obtained, in form and
substance reasonably satisfactory to OSG, any written consents
necessary to transfer any of the Assets, MOC Subsidiary Shares
and Assigned Leases or to maintain unimpaired notwithstanding the
consummation of the transactions contemplated hereby the MOC
Contracts and the Intangible Assets.
(f) LITIGATION. There shall not be any Proceeding by
or before any Government (i) which shall seek to restrain,
enjoin, prohibit or invalidate this Agreement or the transactions
contemplated hereby or which might affect the right of OSGM to
own, operate or control the Assets or the MOC Subsidiary Shares
or the Xxxxxx Subsidiary Shares, or impair the MOC Contracts or
Intangible Assets; or (ii) which seeks to subject any OSG Company
or MOC Subsidiary to any material liability, fine, forfeiture or
penalty on the grounds that any MOC Company either has or will
breach any Law or has otherwise acted improperly in connection
with this Agreement or the transactions contemplated hereby.
(g) ABSENCE OF CERTAIN MATERIAL ADVERSE CHANGES.
There shall not have occurred since the date hereof any material
adverse change in the Assets, or the Assumed Liabilities, or the
assets or liabilities of any MOC Subsidiary.
14 CONDITIONS PRECEDENT TO MOC'S OBLIGATIONS. All obligations
of MOC under this Agreement are subject to the fulfillment and
satisfaction, prior to or at the Effective Time or the Xxxxxx
Effective Time, as applicable, of each of the following
conditions, any one or more of which may be waived by MOC
(a) PAYMENT OF PURCHASE PRICE. OSGM shall have paid
the Purchase Price to MOC.
(b) ASSUMPTION OF OBLIGATIONS. The applicable OSG
Company shall have assumed the Assumed Liabilities and the
obligations accruing after the Effective Time under the Assigned
Leases, in accordance with this Agreement, under agreements and
instruments of assumption reasonably satisfactory to MOC.
(c) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties of OSG contained in this Agreement
shall be deemed to have been made again at and as of the
Effective Time and the Xxxxxx Effective time, as applicable, and
shall then be true and correct in all material respects, and at
the Closing and the Xxxxxx Closing OSG shall have delivered to
MOC a certificate to such effect signed by an executive officer
of OSG.
(d) OSG COMPANIES' PERFORMANCE. Each of the
obligations of the OSG Companies to be performed by the OSG
Companies at or before the Effective Time or the Xxxxxx Effective
Time, as applicable, pursuant to the terms of this Agreement
shall have been performed in all material respects at or before
the Effective Time or the Xxxxxx Effective Time, as applicable,
and at the Closing and the Xxxxxx Closing OSG shall have
delivered to MOC a certificate to such effect signed by an
executive officer thereof.
(e) AUTHORITY. All action required to be taken by or
on the part of any OSG Company to authorize the execution,
delivery and performance of this Agreement and all other OSG
Transfer Documents by the OSG Companies, and the consummation of
the transactions contemplated hereby and thereby, shall have been
duly and validly taken by the Boards of Directors of the
respective OSG Companies, and at the Closing and the Xxxxxx
Closing OSG shall have delivered to MOC a certificate to such
effect signed by an executive officer thereof.
(f) LITIGATION. There shall not be any Proceeding by
or before any Government (i) which shall seek to restrain,
enjoin, prohibit or invalidate this Agreement or the transactions
contemplated hereby, or (ii) which seeks to subject any MOC
Company to any material liability, fine, forfeiture or penalty on
the grounds that any OSG Company either has or will breach any
Law or has otherwise acted improperly in connection with this
Agreement or the transactions contemplated hereby.
15 CLOSING; XXXXXX CLOSING. The closing hereunder (the
"Closing") shall take place at 10:00 o'clock A.M. on the 30th day
of October, 1998 at the offices of MOC, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, xx at such other time and place as may be agreed
by OSG and MOC. The closing of the purchase and sale of the
shares of Xxxxxx hereunder shall take place at 10:00 o'clock A.M.
on the 31st day of December, 1998 at the offices of OSGM,
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, xx at such other time and
place as may be agreed upon by OSG and MOC.
16 INDEMNIFICATION BY MOC. Subsequent to the Effective
Time, MOC shall indemnify, defend and save the OSG Companies and
their respective affiliates, subsidiaries, officers, directors
and shareholders, harmless from, against, for and in respect of
any and all damages, losses, settlement payments, obligations,
liabilities, claims, actions or causes of action, encumbrances
and reasonable costs and expenses (including, without limitation,
reasonable costs of any necessary investigation of any claims and
reasonable attorney's and accounting fees) (collectively,
"Losses") suffered, sustained, incurred or required to be paid by
an OSG Company or any such other indemnified party (or any entity
in control of, controlled by or in common control with an OSG
Company or other indemnified party) because of the material
untruth or inaccuracy or material breach of any representation,
warranty, agreement or covenant of any MOC Company contained in
or made in connection with this Agreement or any Schedule or any
MOC Transfer Document.
17 INDEMNIFICATION BY OSG. Subsequent to the Effective
Time, OSG shall indemnify, defend, and save the MOC Companies and
their respective affiliates, subsidiaries, officers, directors
and shareholders harmless from, against, for and in respect of
any and all Losses suffered, sustained, incurred or required to
be paid by an MOC Company or any such other indemnified party (or
any entity in control of, controlled by or in common control with
an MOC Company) (any of the foregoing, an "MOC Indemnified
Party") because of (i) the material untruth or inaccuracy or
material breach of any representation, warranty, agreement or
covenant of an OSG Company contained in or made in connection
with this Agreement or any OSG Transfer Document; (ii) all
liabilities and obligations originally incurred by an MOC Company
which an OSG Company expressly assumes under or pursuant to this
Agreement provided that this clause (ii) shall apply with respect
to Xxxxxx and the Xxxxxx Subsidiaries only from and after the
Xxxxxx Effective Time; (iii) unless such liability or obligation
arises primarily out of a matter required to be disclosed by MOC
in this Agreement or a Schedule hereto or otherwise and which
matter has not been so disclosed, any and all liabilities and
obligations of any nature whatsoever, whether fixed or
contingent, known or unknown, matured or unmatured, liquidated or
unliquidated, of MOC to any officer, director or employee or
former officer, director or employee of MOC or any trust or other
plan for the benefit of any such employee or former employee; and
(iv) any Proceeding brought by a stockholder of OSG (including
any Proceeding brought by any such stockholder in the right of
OSG, but excluding any Proceeding where such indemnification
would not be permitted by law) alleging that any MOC Indemnified
Party acted improperly in connection with the transactions
contemplated by this Agreement.
18 RULES REGARDING INDEMNIFICATION.
(a) The rights and obligations of each party claiming
a right to indemnification hereunder ("Indemnitee") from the
other party ("Indemnitor") shall be governed by the following
rules:
(i) The Indemnitee shall give prompt written
notice to the Indemnitor of any state of facts which Indemnitee
believes will give rise to a claim by the Indemnitee against the
Indemnitor based on the indemnity agreements contained in
Sections 16 and 17 hereof, reasonably stating the nature and
basis of said claims and the amount thereof, to the extent known.
No failure to give such notice shall affect the indemnification
obligations of Indemnitor hereunder except to the extent such
failure materially prejudiced such Indemnitor's ability to
successfully defend the matter giving rise to the indemnification
claim.
(ii) In the event any Proceeding is brought
against the Indemnitee, with respect to which the Indemnitor may
have liability under the indemnity agreements contained in
Section 16 or Section 17 hereof, then such Proceeding may be
defended by the Indemnitor at Indemnitor's expense with counsel
selected by Indemnitor (subject to Indemnitee's reasonable
consent). In the event that representation of Indemnitee by
Indemnitor's counsel would present such counsel with a conflict
of interest, or if Indemnitor shall fail to assume the defense of
the Proceeding in a timely manner, then such Indemnitee may
employ separate counsel reasonably satisfactory to the Indemnitor
to represent or defend the Indemnitee in the Proceeding and the
Indemnitor will promptly pay from time to time the reasonable
fees and expenses of such counsel; provided, however, that the
Indemnitor will not be required to pay the fees and expenses of
more than one separate counsel for all Indemnitees in any
jurisdiction in any single Proceeding or in separate but similar
Proceedings. In any Proceeding in which the Indemnitee does not
have the right to employ its own counsel at Indemnitor's expense
as permitted by the immediately preceding sentence, the
Indemnitee shall have the right to employ counsel to participate
in such Proceeding, but the fees and expenses of such counsel
employed by Indemnitee to participate in such Proceeding shall be
at the Indemnitee's own expense.
(iii) The Indemnitee shall be kept reasonably in
formed by the Indemnitor of such Proceeding. Each party shall,
at its own expense, make available to the other parties and their
respective attorneys and accountants all books and records of
such party relating to such Proceeding, and the parties hereto
agree to render to each other such assistance as they may
reasonably require of each other in order to ensure the proper
and adequate defense of any such Proceeding.
(b) The Indemnitor shall make no settlement of any
claims which Indemnitor has undertaken to defend, without
Indemnitee's consent, such consent not to be unreasonably
withheld, and the Indemnitee shall make no settlement of any
claims covered by the indemnities hereunder without the
Indemnitor's consent, such consent not to be unreasonably
withheld.
19 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; PERIOD FOR
CLAIMS. All representations and warranties made hereunder shall
survive the Effective Time for a period of one year; no claim
(other than a claim under Section 17(ii) or (iii) hereof, which
shall survive without limitation as to time) for indemnification
hereunder may be made more than one year after the Effective
Time.
20 FURTHER ACTIONS. At any time and from time to time
after the Effective Time, at OSG's request and without further
consideration, MOC shall, and shall cause the other MOC Companies
to, execute and deliver such other instruments of sale,
conveyance, transfer, assignment and confirmation and take such
further action as OSG may reasonably deem necessary or desirable
in order to more effectively convey, transfer and assign to the
applicable OSG Company, to confirm the applicable OSG Company's
title to, and to preserve unimpaired, all of the Assets and the
MOC Leases, to put the applicable OSG Company in actual
possession and operating control thereof and to assist the
applicable OSG Company in exercising all rights with respect
thereto. At or after the Effective Time, the parties shall make
such payments and take such other actions as they may agree to be
necessary or appropriate to equitably carry out the transactions
contemplated by this Agreement. After the Effective Time, at
reasonable times and on reasonable notice, MOC shall have access
to the books and records conveyed to the OSG Companies hereunder,
and OSG shall have access to any books and records retained by
the MOC Companies.
21 NOTICES. Any and all notices or other communications
or deliveries required or permitted to be given under any of the
provisions of this Agreement shall be in writing and shall be
deemed to have been duly given (i) three days after the mailing
thereof by registered mail, return receipt requested, (ii) on the
day following mailing when sent by overnight express mail or
courier and (iii) at the actual time of receipt when delivered
personally, addressed to MOC or OSGM at 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, or to OSG at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other address as any
such party may designate by notice duly given hereunder.
22. MISCELLANEOUS.
(a) This writing, including all Schedules hereto,
constitutes the entire agreement of the parties with respect to
the subject matter hereof and may not be modified, amended or
terminated except by a written agreement specifically referring
to this Agreement signed by OSG and MOC.
(b) No waiver of any breach or default hereunder shall
be considered valid unless in writing and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver
of any subsequent breach or default of the same or similar
nature.
(c) This Agreement shall be binding upon and inure to
the benefit of each party hereto (and each OSG Subsidiary), its
successors and assigns, and shall not inure to the benefit of or
be enforceable by any other person or entity. OSG shall cause
the OSG Subsidiaries to comply with their obligations under this
Agreement. The benefits of this Agreement may be assigned by OSG
to an entity directly or indirectly owned or controlled by it or
under common control with it, provided that the OSG Companies
shall in any such event continue to be jointly and severally
liable with such new entity for all obligations and undertakings
contained in this Agreement.
(d) The section and subsection headings contained
herein are for the purposes of convenience only and are not
intended to define or limit the contents of such sections.
(e) Each party hereto shall cooperate, shall take such
further action and shall execute and deliver such further
documents as may be reasonably requested by any other party in
order to carry out the provisions and purposes of this Agreement.
(f) Whether or not the transactions contemplated
hereby are consummated, the parties hereto shall each pay its own
expenses in connection with this Agreement and the transactions
contemplated hereby.
(g) This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one
instrument.
(h) To the extent possible, each provision of this
Agreement shall be interpreted in a manner as to be valid, legal
and enforceable. Any determination that any provision of this
Agreement or any application thereof is invalid, illegal or
unenforceable in any respect or in any instance shall be
effective only to the extent of such invalidity, illegality or
unenforceability and shall not affect the validity, legality or
enforceability of any other provision of this Agreement.
(i) This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of New York,
without regard to its conflict of laws rules.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the date first set forth above.
OVERSEAS SHIPHOLDING GROUP, INC.
By:-----------------------------
Name:
Title:
OSG SHIP MANAGEMENT, INC.
By:-----------------------------
Name:
Title:
MARITIME OVERSEAS CORPORATION
By:-----------------------------
Name:
Title:
