As
filed with the Securities and Exchange Commission on October 29,
2007
Registration
No.
333-
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_____________________
FORM
F-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
_____________________
DOUBLE
HULL TANKERS, INC.
(Exact
name of registrant as specified in its charter)
_____________________
|
Republic
of the Marshall Islands
(State
or other jurisdiction of incorporation or organization)
|
26
New Street
St.
Helier, Jersey JE23RA
Channel
Islands
+44
(0) 1534 639759
(Address
and telephone number of
registrant’s
principal executive offices)
|
N/A
(I.R.S.
Employer
Identification
Number)
|
_____________________
CT
Corporation
111
Eighth Avenue
New
York, New York 10011
(212)
550-9100
(Name,
address and telephone
number
of
agent for service)
With
copies to:
|
John
T. Gaffney, Esq.
Cravath,
Swaine & Moore LLP
Worldwide
Plaza
825
Eighth Avenue
New
York, New York 10019
(212)
474-1000
|
Gary
L. Sellers, Esq.
Simpson
Thacher & Bartlett LLP
425
Lexington Avenue
New
York, New York 10017-3954
(212)
455-2000
|
_____________________
Approximate
date of commencement of proposed sale to the public: From time to
time after the effective date of this registration
statement.
_____________________
If
the
only securities being registered on this Form are being offered pursuant to
dividend or interest reinvestment plans, please check the following
box. o
If
any of
the securities being registered on this Form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, please
check the following box. x
If
this
Form is filed to register additional securities for an offering pursuant to
Rule
462(b) under the Securities Act, please check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. o
If
this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same
offering. o
If
this
Form is a registration statement pursuant to General Instruction I.C. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. o
If
this
Form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.C. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act,
check the following box. o
_____________________
CALCULATION
OF REGISTRATION FEE
|
Title
of Each Class of
Securities
to be Registered
|
Amount
to be
Registered(1) |
Proposed
Maximum
Offering Price per Unit(2) |
Proposed
Maximum
Aggregate Offering Price(1)(3) |
Amount
of
Registration Fee |
||||
| Common Stock, par value $.01 per share | ||||||||
|
Preferred
Stock, par value $.01 per share
|
||||||||
| Debt Securities | ||||||||
| Total |
100%
|
$200,000,000
|
$6,140
|
|
(1)
|
There are being registered hereunder
such
indeterminate number of shares of common stock, such indeterminate
number
of shares of preferred stock and such indeterminate principal amount
of
debt securities as will have an aggregate initial offering price
not to
exceed $200 million, or if any securities are issued in any foreign
currency units, the equivalent thereof in foreign currencies. This
registration statement shall also cover any additional securities
to be
offered or issued from stock splits, stock dividends, recapitalizations
or
similar transactions. If any debt securities are issued at an original
issue discount, then the offering price of such debt securities shall
be
in such greater principal amount as shall result in a maximum aggregate
offering price not to exceed $200 million, less the aggregate dollar
amount of all securities previously issued hereunder. The securities
being
registered also include such indeterminate principal amount of debt
securities and such indeterminate number of shares of preferred stock
and
common stock as may be issued upon conversion of or in exchange for
any
other debt securities or preferred shares that provide for conversion
or
exchange.
|
|
(2)
|
The
proposed maximum aggregate offering price for each class of securities
will be determined from time to time by the registrant in connection
with
the issuance by the registrant of the securities registered hereunder
and
is not specified as to each class of securities pursuant to General
Instruction II.C. of Form F-3 under the Securities Act of 1933, as
amended.
|
|
(3)
|
Estimated
solely for the purposes of calculating the registration fee pursuant
to
Rule 457(o) of Regulation C under the Securities Act of 1933, as
amended.
|
_____________________
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall
file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
The
information in this preliminary prospectus is not complete and may be changed.
We may not sell these securities until the registration statement filed with
the
Securities and Exchange Commission is effective. This preliminary prospectus
is
not an offer to sell these securities and is not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
Subject
to completion. Preliminary Prospectus dated October 29,
2007.
Prospectus
$200,000,000
___________________
Through
this prospectus, we may periodically offer:
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·
|
our
common stock;
|
|
·
|
our
preferred stock; and
|
|
·
|
our
debt securities.
|
We
may
from time to time offer and sell the securities directly or through agents,
underwriters or broker-dealers at prices and on terms to be determined at the
time of sale. These sales may be made on the New York Stock Exchange or other
national security exchanges on which our common stock is then traded, in the
over-the-counter market, or in negotiated transactions. See the section entitled
“Plan of Distribution” on page 11 of this prospectus. To the extent required,
the names of any agent, underwriter or broker-dealer and applicable commissions
or discounts and any other required information with respect to any particular
offer will be set forth in a prospectus supplement, which will accompany this
prospectus. The prices and other terms of the securities that we will offer
will
be determined at the time of their offering and will be described in a
prospectus supplement. A prospectus supplement may also add, update or change
information contained in this prospectus.
Our
common stock is listed on the New York Stock Exchange under the symbol
“DHT.”
Investing
in our securities involves risk. Before buying any securities you should
carefully read the section entitled “Risk Factors” on page 8 of this
prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a criminal
offense.
The
date of this prospectus is
, 2007.
______________________
You
should rely only on the information contained in this prospectus. We have not
authorized anyone to provide you with additional or different information.
We
are not making an offer of these securities in any jurisdiction or state where
the offer is not permitted. You should not assume that the information in this
prospectus is accurate as of any date other than the date on the cover of this
prospectus.
TABLE
OF CONTENTS
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ABOUT
THIS PROSPECTUS
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1
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PROSPECTUS
SUMMARY
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2
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|
RISK
FACTORS
|
8
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USE
OF PROCEEDS
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9
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RATIO
OF EARNINGS TO FIXED CHARGES
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9
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PRINCIPAL
STOCKHOLDERS
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10
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PLAN
OF DISTRIBUTION
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11
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DESCRIPTION
OF COMMON STOCK
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14
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DESCRIPTION
OF PREFERRED STOCK
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14
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DESCRIPTION
OF DEBT SECURITIES
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14
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EXPERTS
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24
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LEGAL
MATTERS
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24
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DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT
ISSUES
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24
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TAX
CONSIDERATIONS
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25
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WHERE
YOU CAN FIND ADDITIONAL INFORMATION
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34
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CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
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36
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i
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement we filed with the Securities
Exchange Commission, or the “Commission”, using a shelf registration process.
Under the shelf registration process, we may, from time to time, sell the
securities described in this prospectus in one or more offerings up to a total
dollar amount of $200 million. This prospectus provides you with a general
description of the securities that may be offered by us. Each time we sell
securities, we are required to provide you with this prospectus as well as
a
prospectus supplement containing specific information about the terms of the
securities being offered. That prospectus supplement may include additional
risk
factors or other special considerations applicable to those particular
securities. Any prospectus supplement may also add, update or change information
in this prospectus. If there is any inconsistency between the information
contained in this prospectus and any prospectus supplement, you should rely
on
the information contained in that particular prospectus supplement. You should
read both this prospectus and any prospectus supplement, together with all
additional information described in the section entitled “Where You Can Find
Additional Information” on page 34 of this prospectus.
This
prospectus does not contain all the information provided in the registration
statement we filed with the Commission. For further information about us or
the
securities offered hereby, you should refer to that registration statement,
which you can obtain from the Commission as described in the section entitled
“Where You Can Find Additional Information” on page 34 of this
prospectus.
1
PROSPECTUS
SUMMARY
Before
investing in our common stock you should read this entire prospectus carefully,
including the section entitled “Risk Factors” and our financial statements and
related notes for a more complete understanding of our business and this
offering. Unless we specify otherwise, all references and data in this
prospectus to our “business,” our “vessels” and our “fleet” refer to our initial
fleet of seven vessels that we acquired simultaneously with the closing of
our
initial public offering, or “IPO,” on October 18, 2005. Unless we specify
otherwise, all references in this prospectus to “we,” “our,” “us” and “our
company” refer to Double Hull Tankers, Inc. and its subsidiaries. The shipping
industry’s functional currency is the U.S. dollar. All of our revenues and most
of our operating costs are in U.S. dollars. All references in this prospectus
to
“$” and “dollars” refer to U.S. dollars.
Our
Company
We
operate a fleet of double hull tankers. Our fleet currently consists of three
very large crude carriers, or “VLCCs,” which are tankers ranging in size from
200,000 to 320,000 deadweight tons, or “dwt,” and four Aframax tankers, or
“Aframaxes,” which are tankers ranging in size from 80,000 to 120,000 dwt. In
addition, we have signed agreements to acquire a 2001 built 164,000 dwt Suezmax
tanker and a 2000 built 153,000 dwt Suezmax tanker, which are scheduled for
delivery during the period from November to December 2007 and December
2007 to February 2008, respectively, subject to customary closing
conditions. Our fleet principally operates on international routes and had
a
combined carrying capacity of 1,659,921 dwt and a weighted average age of 7.6
years as of September 30, 2007, compared with a weighted average age of 10.4
years for the world tanker fleet.
We
acquired the seven vessels making up our initial fleet from subsidiaries of
Overseas Shipholding Group, Inc., a Delaware corporation, or “OSG,” on October
18, 2005 in exchange for cash and shares of our common stock, and we have time
chartered these vessels back to certain subsidiaries of OSG. We have
agreed to acquire our two additional Suezmax tankers, the Overseas
Newcastle and the Overseas London, from certain subsidiaries of
OSG for $92.7 million and $90.3 million, respectively. OSG has agreed to
purchase each of these vessels from an unaffiliated seller at the same
respective purchase price and thereupon deliver the vessels to us. The two
additional Suezmax tankers will be bareboat chartered to subsidiaries of OSG.
As
one of the world’s largest bulk-shipping companies, OSG’s owned, operated and
newbuild fleet totals more than 140 vessels (including the seven vessels that
comprise our initial fleet) with a combined carrying capacity of nearly 14
million dwt as of June 30, 2007. OSG’s fleet consists of both internationally
flagged and U.S. flagged vessels that transport crude oil, refined petroleum
products and gas worldwide.
Our
strategy is to charter our fleet primarily pursuant to multi-year charters
so as
to take advantage of the stable cash flow associated with long-term charters.
In
addition, all but one of our charter arrangements include a profit sharing
component that gives us the opportunity to earn additional hire when vessel
earnings exceed the basic hire amounts set forth in the charters. Our initial
seven vessels are operated in the Tankers International Pool and the Aframax
International Pool, respectively. These pools are further described below.
In a
pooling arrangement, the net revenues generated by all of the vessels in a
pool
are aggregated and distributed to pool members pursuant to a pre-arranged
weighting system that recognizes each vessel’s earnings capacity based on its
cargo capacity, speed and consumption, and actual on-hire
performance.
With
effect from October 18, 2005, we time chartered our initial fleet of seven
vessels to subsidiaries of OSG for terms ranging from five to six and one-half
years. The two additional Suezmax tankers that we have agreed to acquire will
be
bareboat chartered to subsidiaries of OSG for terms of seven years and ten
years, respectively, commencing on the respective delivery dates of the
vessels. Under each of the time charters for our initial seven vessels,
the charters may be renewed by the charterer on one or more successive occasions
for periods of one, two or three years, up to an aggregate of five, six or
eight
years, depending on the vessel. If a time charter is renewed, the charter terms
providing for profit sharing will remain in effect and the charterer, at the
time of exercise, will have the option to select a basic charter rate that
is
equal to (i) 5% above the published one-, two- or three-year time charter rate
(corresponding to the length of the extension period) for the vessel’s class, as
decided by a shipbrokers panel, or (ii) the basic hire rate set forth in the
applicable charter. The shipbrokers panel, or “Broker Panel,” will be The
Association of Shipbrokers and Agents Tanker Broker Panel or another panel
of
brokers mutually acceptable to us and the charterer. The bareboat charter for
each of our two additional Suezmax tankers does not allow the charterer to
extend the charter period.
2
We
maintain our principal executive offices at 26 New Street, St. Helier, Jersey
JE23RA, Channel Islands. Our telephone number at that address is +44 (0) 1534
639759. Our website address is www.dhtankers.com. The information on our
website is not a part of this prospectus.
Our
Fleet
We
purchased three VLCCs and four Aframaxes from certain subsidiaries of OSG in
connection with our IPO. We have also agreed to acquire two additional Suezmax
tankers scheduled for delivery at the end of 2007 and the beginning of 2008,
respectively, subject to customary closing conditions. Our three VLCCs, due
to
their large size, principally operate on long-haul routes from the Middle East
or West Africa to the Far East, Northern Europe, the Caribbean and the U.S.
Gulf, trading through the Tankers International Pool. Although our four
Aframaxes are also designed for global trading, they typically trade through
the
Aframax International Pool in the Atlantic Basin on shorter-haul routes between
Northern Europe, the Caribbean, the United States and the Mediterranean Sea.
Once delivered, we expect our two Suezmax tankers to principally operate on
routes from West Africa to the U.S. Gulf, and in the Atlantic Basin on routes
between Northern Europe, the Caribbean, the United States and the
Mediterranean.
The
following table presents certain information concerning the vessels comprising
our initial fleet and their associated charters, each of which commenced on
October 18, 2005:
|
Vessel
|
Type
|
Dwt
|
Year
Built
|
Term
of
Initial
Charter
|
Year
2 Basic Charter
Rate(1)
|
Term
of Extension Periods
|
Maximum
Aggregate Extension
Term
|
|||||||
|
(years)
|
($/day)
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(years)
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(years)
|
|||||||||||
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Overseas
Ann
|
VLCC
|
|
309,327
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2001
|
6½
|
37,400
|
1,
2 or 3
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8
|
||||||
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Overseas
Chris
|
VLCC
|
|
309,285
|
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2001
|
6
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37,400
|
1,
2 or 3
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8
|
|||||
|
Overseas
Regal
|
VLCC
|
309,966
|
|
1997
|
5½
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37,400
|
1,
2 or 3
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6
|
||||||
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Overseas
Cathy
|
Aframax
|
112,028
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2004
|
6¼
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24,700
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1,
2 or 3
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8
|
|||||||
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Overseas
Sophie
|
Aframax
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112,045
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2003
|
5¾
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24,700
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1,
2 or 3
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8
|
|||||||
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Overseas
Rebecca
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Aframax
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94,873
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1994
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5
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18,700
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1,
2 or 3
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5
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|||||||
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Overseas
Ania
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Aframax
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94,848
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1994
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5
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18,700
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1,
2 or 3
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5
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________________
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(1)
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Amounts
represent basic hire charter rates, which increase annually by
amounts
that vary by vessel class and year.
|
3
The
following table presents certain information concerning the two additional
Suezmax tankers we have agreed to acquire and their associated charters, each
of
which will commence upon delivery of the vessel:
|
Vessel
|
Type
|
Dwt
|
Year
Built
|
Expected
Delivery
Date(1)
|
Term
of Bareboat
Charter
|
|
(years)
|
|||||
|
Overseas
Newcastle
|
Suezmax
|
164,626
|
2001
|
Nov
/ Dec 2007
|
7
|
|
Overseas
London
|
Suezmax
|
152,923
|
2000
|
Dec
2007 / Feb 2008
|
10
|
________________
|
(1)
|
Subject
to customary closing conditions.
|
With
respect to the Overseas Newcastle, the basic bareboat
charter rate is $26,300 per day for the first three years of the charter term,
and is reduced to $25,300 per day for the last four years of the charter term.
In addition to the bareboat charter rate, we will, through the profit sharing
element of the charter agreement, earn 33% of the vessel’s earnings above the
time charter equivalent rate of $35,000 per day for the first three years of
the
charter term and above $34,000 per day for the last four years of the charter
term, calculated on a four quarter rolling average. At the end of the seven
year
charter term, OSG has the right to acquire the vessel for $77
million.
With
respect to the Overseas London, the bareboat charter rate is $26,600
per day for the term of the charter. OSG has the right to acquire the vessel
at
the end of the eighth, ninth and tenth year of the charter term, respectively,
at a price of $71 million, $67 million and $60 million, respectively. If OSG
elects to exercise its purchase option, we will, in addition to the purchase
option price, receive an amount equal to 40% of the difference between the
market price of the vessel at the time the purchase option is exercised and
the
purchase option price.
Our
Competitive Strengths
We
believe that we have a number of strengths that provide us with a competitive
advantage in the tanker industry, including:
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·
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A
modern, high quality fleet. As of September 30, 2007, our
current fleet of three VLCCs and four Aframaxes had a weighted average
age
of 7.6 years, compared with a weighted average age for the world
tanker
fleet of 10.4 years. Following delivery of our two additional Suezmax
tankers, our fleet will have a weighted average age of 8.0 years
as of
March 31, 2008. All of our vessels are of double-hull construction.
We
believe that owning and maintaining a modern, high quality fleet
reduces
off hire time and operating costs, improves safety and environmental
performance and provides us with a competitive advantage in securing
employment for our vessels.
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·
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Participation
in OSG’s pooling arrangements. We believe that we benefit
from OSG’s membership in the Tankers International Pool in respect of our
three VLCCs and the Aframax International Pool in respect of our
four
Aframaxes, and we expect OSG’s subsidiaries to continue to operate our
VLCC and Aframax vessels in these pools. We believe that, over a
longer
period of time, our potential to earn additional hire will be enhanced
by
the higher utilization rates and lower overhead costs that a vessel
operating inside a pool can achieve compared with a vessel operating
independently outside of a pool.
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·
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An
experienced management team. Our management team is led by
Ole Jacob Diesen, our chief executive officer, who has over 30 years
of
experience in the shipping industry. Mr. Diesen has been an independent
corporate and financial management consultant since 1997 and has
extensive
experience in the shipping industry, including advising on a broad
range
of shipping transactions such as vessel sales and financings, vessel
charters, pooling and technical management
agreements.
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4
Our
Strategy
The
key
elements of our strategy are to:
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·
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Charter
a substantial portion of our fleet under multi-year, fixed-rate charters
that provide for profit sharing. Currently we have time
chartered all of our current seven vessels to subsidiaries of OSG,
one of
the world’s largest bulk-shipping companies, for remaining terms ranging
from three to four and one-half years under charters that provide
for
fixed monthly payments, plus the potential to earn additional profit
sharing payments. We have also agreed to bareboat charter our two
additional Suezmax tankers to subsidiaries of OSG for terms of seven
years
and ten years, respectively, upon delivery of the vessels in during
the
period from November to December 2007 and December 2007 to
February 2008, respectively. We believe that these long-term charters
will
generate stable and predictable cash flow and provide us with the
opportunity to earn significant additional hire as market rates exceed
our
basic hire rates for our initial seven vessels and the Overseas
Newcastle.
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·
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Fix
a substantial portion of our operating costs under our ship management
agreements. Currently, all of our vessels are managed by
Tanker Management Ltd., referred to herein as “Tanker Management” or our
“technical manager,” which is a wholly owned indirect subsidiary of OSG,
pursuant to ship management agreements that became effective at the
completion of our IPO. Under these ship management agreements, Tanker
Management has assumed all responsibilities for the technical management
of each of our vessels and for most of the operating costs, excluding
insurance premiums and vessel taxes. The fee payable to Tanker Management
under these ship management agreements is fixed through October 2008.
Following their delivery, our two additional Suezmax tankers will
be on
bareboat charters to subsidiaries of OSG. Under a bareboat charter
arrangement, the charterer is responsible for paying all operating
costs
associated with the vessel. Accordingly, we will not incur any operating
costs associated with these two additional
vessels.
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·
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Strategically
expand our current fleet. We intend to grow our fleet
through timely and selective acquisitions or chartering of additional
vessels. Although our fleet consists of our three VLCCs and four
Aframaxes
as at the date of this prospectus, we have agreed to acquire two
additional Suezmax tankers and intend to consider further potential
acquisitions of additional tankers, as well as vessels other than
tankers.
In connection with any such acquisitions, we may charter out such
vessels
either for multi-year or voyage-based
periods.
|
Our
Charters
We
have
time chartered our current fleet of three VLCCs and four Aframaxes to certain
subsidiaries of OSG for remaining terms ranging between three and four and
one-half years. We will bareboat charter each of our two additional Suezmax
tankers to subsidiaries of OSG for terms of seven years and ten years,
respectively, upon delivery of the vessels during the period from November
to December 2007 and December 2007 to February 2008, respectively. The
daily base charter rate for each of our vessels, which we refer to as basic
hire, is payable to us monthly in advance.
5
With
respect to the seven vessels comprising our initial fleet, the charterers and
OSG International, Inc., or “OIN,” the charterers’ parent company, have agreed
to pay us, in addition to the basic hire, an additional payment, quarterly
in
arrears, which we refer to as “additional hire.” The additional hire payable, if
any, in respect of any given quarter will be equal to 40% of the average revenue
that our vessels earn, or are deemed to earn, for the charterers during that
quarter (averaged on a rolling four quarter basis) in excess of the basic hire
paid by the charterers to us during that quarter. Revenue is calculated on
an
aggregate fleetwide basis, and depends on whether our vessels are operated
in a
pool:
|
·
|
if
a vessel is operated in a pool, revenue earned by that vessel equals
the
share of actual pool net earnings allocated to the charterer, as
determined by a formula administered by the pool
manager;
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·
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if
a vessel is operated outside of a
pool:
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·
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for
periods that the charterer subcontracts the vessel under a time charter,
revenue earned by that vessel equals the time charter hire earned
by the
charterer, net of specified fees incurred by the charterer;
and
|
|
·
|
for
periods that the charterer does not subcontract the vessel in the
time
charter market, revenue deemed to be earned by that vessel is based
on
average spot market rates, which are rates for the immediate chartering
of
a vessel (usually for a single voyage), determined by a shipbrokers’ panel
for a series of routes commonly served by vessels of the same
class.
|
A
pool
constitutes a collection of similar vessels under various ownerships that are
placed for operation under one administrator, which we refer to as the “pool
manager.” The pool manager markets the vessels as a single, cohesive fleet and
collects, or pools, their net earnings prior to distributing them to the
individual owners under a pre-arranged weighting system that recognizes each
vessel’s earnings capacity based on its cargo capacity, speed and consumption,
and actual on-hire performance. Pools offer their participants more
opportunities to enter into multi-legged charters and contracts of
affreightment, which can reduce non-earning days through scheduling
efficiencies.
The
three
VLCCs in our fleet currently participate in the Tankers International Pool,
in
which OSG and eight other tanker companies participate. As of September 30,
2007, the Tankers International Pool consists of 46 VLCCs and
V Pluses, making it one of the world’s largest VLCC fleets. The four
Aframaxes in our fleet currently participate in the Aframax International Pool,
the world’s second largest Aframax fleet, which, as of September 30, 2007,
operates 35 Aframaxes and has eight members, including OSG (which is one of
the pool managers).
With
respect to the Overseas Newcastle, one of our Suezmax tankers, the
charterer has agreed to pay us, in addition to the basic hire, additional hire
equal to 33% of the average revenue that the vessel earns for the charterer
(averaged on a rolling four quarter basis) in excess of the time charter
equivalent rate of $35,000 per day for the first three years of the charter
term
and above $34,000 per day for the last four years of the charter
term. We will not receive any additional hire in respect of the
Overseas London, our other Suezmax tanker.
Technical
Management of Our Fleet
In
connection with each of our vessels, we have entered into ship management
agreements with Tanker Management with effect from October 18, 2005, which
we
refer to as the “Ship Management Agreements.” Under the Ship Management
Agreements, Tanker Management is responsible for the technical management and
for most of the operating costs of our vessels, including crewing, maintenance,
ordinary repairs, scheduled drydockings, insurance deductibles (subject to
the
limits set forth in the Ship Management Agreements) and other vessel operating
expenses, excluding insurance premiums. In exchange for these services, we
pay
Tanker Management a daily fee, which we refer to as the “technical management
fee,” for each vessel under management. The technical management fee for each
vessel is payable monthly in advance based on the actual number of days in
the
month. The fee is fixed through October 18, 2007 and increases by 2.5% per
year
thereafter. Neither us nor Tanker Management is able to cancel any Ship
Management Agreement (as currently amended) prior to the third anniversary
of
the effective date of such agreement (eg. October 18, 2008), except for cause.
Beginning on the third anniversary, the Ship Management Agreements (as currently
amended) are cancelable by us or Tanker Management for any reason at any time
upon 90 days’ advance notice. Each charterer has the right to approve any
replacement manager that we may select. Following their delivery, our two
additional Suezmax tankers will be on bareboat charters to subsidiaries of
OSG.
We will not incur any operating costs associated with these vessels as under
a
bareboat charter arrangement the charterer is responsible for paying all costs
of operating the vessel, including voyage and vessel expenses.
6
Dividend
Policy
We
intend
to pay quarterly dividends to the holders of our common stock in March, June,
September and December of each year, in amounts substantially equal to the
available cash from our operations during the previous quarter, less cash
expenses and any reserves established by our board of directors. Our board
of
directors may review and amend our dividend policy from time to time in
accordance with any future growth of our fleet or for other
reasons.
Our
Credit Facility
On
October 18, 2005, we entered into a $401 million secured credit facility with
The Royal Bank of Scotland, or “RBS,”
that has a term
of ten years, with no principal amortization for the first five years. This
credit facility consists of a $236 million term loan, a $150 million vessel
acquisition facility and a $15 million working capital facility. The credit
facility is secured by mortgages on all of our vessels, assignments of earnings
and insurances and pledges over our bank accounts. We are the borrower under
the
credit facility, and each of our vessel owning subsidiaries has guaranteed
our
obligations under the credit facility.
We
borrowed the entire amount available under the term loan upon the completion
of
our IPO to fund a portion of the purchase price for the seven vessels that
we
acquired from certain subsidiaries of OSG. Subject to the satisfaction of a
number of conditions, we are permitted to borrow up to the full amount of the
vessel acquisition facility and up to the full amount of the working capital
facility for a period of five years from the closing of the credit facility.
The
acquisition of our two additional Suezmax tankers for an aggregate of $183
million is being funded by our vessel acquisition facility, which, subject
to the completion of definitive documentation, RBS has agreed to increase
by $19 million to accommodate the acquisition of these vessels.
Following
the above-mentioned increase, our credit facility will be repayable
with one installment of $75 million no later than December 31, 2008, and
commencing on January 18, 2011 our credit facility will be repayable
in 27 quarterly installments of $9,075,000. A final payment of $99,975,000
will
be payable in the last quarterly installment.
Borrowings
under the initial $236 million term loan bear interest at an annual rate of
LIBOR plus a margin of 0.70%. Borrowings under the vessel acquisition facility
and working capital facility will bear interest at an annual rate of LIBOR
plus
a margin of 0.85%. To reduce our exposure to fluctuations in interest rates,
we
entered an interest rate swap on October 18, 2005, pursuant to which we fixed
the interest rate for five years on the full amount of our $236 million term
loan at 5.60%. On October 16, 2007, we entered into an interest rate swap
pursuant to which we fixed the interest rate until January 18, 2013 on an amount
of $100 million at 5.94%. We were required to pay a $1.5 million fee in
connection with the arrangement of our credit facility in October 2005 and
a
commitment fee of 0.3% per annum, which will be payable quarterly in arrears,
on
the undrawn portion of the facility. We were required to pay an arrangement
fee
of $95,000 in October 2007 in connection with the increase in our credit
facility from $401 million to $420 million.
7
RISK
FACTORS
You
should carefully consider the following information about risks, together with
the other information contained in this prospectus, before making an investment
in our common stock.
Our
vessels call on ports located in countries that are subject to restrictions
imposed by the U.S. government, which could be viewed negatively by investors
and adversely affect the trading price of our common
stock.
From
time
to time, vessels in our fleet call on ports located in countries subject to
sanctions and embargoes imposed by the U.S. government and countries identified
by the U.S. government as state sponsors of terrorism. From January 1, 2006
through September 30, 2007, vessels in our fleet have, while operating in pools,
made seven calls to ports in Iran and three calls to ports in Libya out of
a
total of 573 calls on worldwide ports. On June 30, 2006, Libya was removed
from
the U.S. government’s list of state sponsors of terrorism and is not subject to
sanctions or embargoes, while Iran continues to be subject to sanctions and
embargoes imposed by the U.S. government and is identified by the U.S.
government as a state sponsor of terrorism. Although these sanctions and
embargoes do not prevent our vessels from making calls to ports in these
countries, potential investors could view such port calls negatively, which
could adversely affect our reputation and the market for our common stock.
Investor perception of the value of our common stock may be adversely affected
by the consequences of war, the effects of terrorism, civil unrest and
governmental actions in these and surrounding countries.
We
have
identified a number of other risk factors which you should consider before
buying the securities described in this prospectus. These risk factors are
incorporated by reference into this prospectus from our annual report on Form
20-F filed with the Commission on April 5, 2007. For further details, see the
section entitled “Where You Can Find Additional Information” on page 34 of this
prospectus. In addition, you should also consider carefully the risks set forth
under the heading “Risk Factors” in any prospectus supplement before investing
in the securities offered by this prospectus.
If
the
events discussed in the risk factors referred to above occur, our business,
financial condition, results of operations or cash flows could be materially
and
adversely affected. In such a case, the market price of our common stock could
decline. The risks described above, in our annual report on Form 20-F and any
prospectus supplement are not the only ones that may exist. Additional risks
not
currently known by us or that we deem immaterial may also impair our business
operations.
8
USE
OF PROCEEDS
Unless
we
specify otherwise in any prospectus supplement, we intend to use the net
proceeds from the sale of securities offered by this prospectus for general
corporate purposes, which may include, without limitation, vessel acquisitions,
business acquisitions or other strategic alliances, reduction of outstanding
borrowings, capital expenditures and working capital.
RATIO
OF EARNINGS TO FIXED
CHARGES
Our
consolidated ratio of earnings to fixed charges for each of the periods
indicated is set forth below. We have derived the ratios of earnings to fixed
charges from our historical consolidated financial statements. For the 290
days
from January 1, 2005 to October 17, 2005 and years ended December 31, 2004,
2003, and 2002 the consolidated financial statements represent the predecessor
combined carve-out financial statements of the seven subsidiaries of OSG that
owned the vessels comprising our initial fleet. The predecessor combined
carve-out financial statements are not indicative of the results we would have
achieved had we operated as an independent public company for any period
presented. The ratios should be read in conjunction with our consolidated
financial statements, including the notes thereto, and the other financial
information incorporated by reference herein.
|
For
the Year Ended December 31,
|
For
the Period
|
For
the Year Ended December 31,
|
|||||
|
Six
Months Ended
June
30,
2007
|
2006
|
Jan.
1 - Oct. 17, 2005
|
Oct.
18 - Dec. 31, 2005
|
2004
|
2003
|
2002
|
|
|
Ratio
of earnings to fixed charges
|
3.12
|
3.56
|
13.14
|
4.30
|
11.03
|
5.96
|
—(1)
|
________________
|
(1)
|
For
the year ended December 31, 2002, earnings were insufficient to cover
fixed charges by $4.8 million.
|
We
have
computed the ratios of earnings to fixed charges set forth above by dividing
earnings by fixed charges. For the purpose of determining the ratio of earnings
to fixed charges, earnings include pre-tax income from continuing operations
plus fixed charges. Fixed charges consist of interest on all
indebtedness.
As
of the
date of this prospectus, we have no preference shares outstanding and have
not
declared or paid any dividends on preference shares for the periods set forth
above.
9
PRINCIPAL
STOCKHOLDERS
The
following table sets forth certain information regarding (i) the owners of
more
than 5% of our common stock that we are aware of, and (ii) the total amount
of
common stock owned by all of our officers and directors, both individually
and
as a group, in each case immediately preceding and after giving effect to this
offering.
|
Shares
of
Common
Stock
Prior
to the Offering
|
Shares
of
Common
Stock
Offered
Hereby
|
Shares
of
Common
Stock
Following
the Offering
|
||||||||||||||||||
|
Name
|
Number
of Shares
|
Percent
|
Number
of Shares
|
Number
of Shares
|
Percent
|
|||||||||||||||
|
Persons
owning more than 5% of a class of our equity
securities
|
||||||||||||||||||||
|
FMR
Corp.(1)
|
3,767,700
|
12.55
|
0
|
3,767,700
|
12.55
|
|||||||||||||||
|
Scott
A. Bommer(2)
|
1,705,527
|
5.68
|
0
|
1,705,527
|
5.68
|
|||||||||||||||
|
Directors
|
||||||||||||||||||||
|
Erik
A. Lind(3)
|
7,976
|
*
|
0
|
7,976
|
*
|
|||||||||||||||
|
Randee
Day(3)
|
7,976
|
*
|
0
|
7,976
|
*
|
|||||||||||||||
|
Rolf
A. Wikborg(3)
|
7,976
|
*
|
0
|
7,976
|
*
|
|||||||||||||||
|
Executive
Officers
|
|
|
||||||||||||||||||
|
Ole
Jacob Diesen(4)
|
33,383
|
*
|
0
|
33,383
|
*
|
|||||||||||||||
|
Eirik
Ubøe(5)
|
24,663
|
*
|
0
|
24,663
|
*
|
|||||||||||||||
|
Tom
R. Kjeldsberg(6)
|
8,218
|
*
|
0
|
8,218
|
*
|
|||||||||||||||
|
Directors
and executive officers as a group (6 persons)(7)
|
90,192
|
*
|
0
|
90,192
|
*
|
|||||||||||||||
________________
|
*
|
Less
than 1%
|
|
(1)
|
Based
on a Schedule 13G
filed by FMR Corp. with the Commission on August 10,
2007.
|
|
(2)
|
Based
on a Schedule 13G filed with the Commission on February 26, 2007
by Scott
A. Bommer, individually and (a) as managing member of SAB Capital
Advisors, L.L.C., for itself and as the general partner of (i) SAB
Capital
Partners, L.P. and (ii) SAB Capital Partners II, L.P.; and (iii)
SAB
Overseas Master Fund, L.P.; and (b) as managing member of SAB Capital
Management, L.L.C., for itself and as the general partner of SAB
Capital
Management, L.P. The address of the principal business office of
each of
these reporting persons is 712 Fifth Avenue, 42nd Floor, New York,
NY
10019.
|
|
(3)
|
Includes
5,697 shares of restricted stock subject to vesting
conditions.
|
|
(4)
|
Does
not include 23,148 options with an exercise price of $12 per share
and
expiring on October 18, 2015 subject to vesting conditions. Includes
25,129 shares of restricted stock subject to vesting
conditions.
|
|
(5)
|
Does
not include 23,148 options with an exercise price of $12 per share
and
expiring on October 18, 2015 subject to vesting conditions. Includes
18,009 shares of restricted stock subject to vesting
conditions.
|
|
(6)
|
Consists
solely of 8,218 shares of restricted stock subject to vesting
conditions.
|
|
(7)
|
Includes
68,447 shares of restricted stock subject to vesting
conditions.
|
10
PLAN
OF
DISTRIBUTION
We
may
offer and sell, from time to time, some or all of the securities covered by
this
prospectus up to a total of $200 million. Registration of the securities covered
by this prospectus does not mean, however, that those securities necessarily
will be offered or sold.
We
may
sell the securities covered by this prospectus from time to time, in one or
more
transactions, at market prices prevailing at the time of sale, at prices related
to market prices, at a fixed price or prices subject to change, at varying
prices determined at the time of sale or at negotiated prices, by a variety
of
methods, including the following:
|
·
|
on
the New York Stock Exchange or any other national securities exchange
or
U.S. inter-dealer system of a registered national securities association
on which our common stock may be listed or quoted at the time of
sale;
|
|
·
|
in
the over-the-counter market;
|
|
·
|
in
privately negotiated transactions;
|
|
·
|
in
an exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
as
settlement of short sales entered into after the date of the
prospectus;
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
|
|
·
|
through
broker-dealers, who may act as agents or principals;
|
|
·
|
through
sales “at the market” to or through a market-maker;
|
|
·
|
in
a block trade, in which a broker-dealer will attempt to sell a
block as
agent, but may position and resell a portion of the block as principal
to
facilitate the transaction;
|
|
·
|
through
one or more underwriters on a firm commitment or best-efforts
basis;
|
|
·
|
directly
to one or more purchasers;
|
|
·
|
through
agents;
|
|
·
|
in
options transactions;
|
|
·
|
over
the internet;
|
|
·
|
any
other method permitted pursuant to applicable law; or
|
|
·
|
in
any combination of the above.
|
In
effecting sales, brokers or dealers engaged by us may arrange for other brokers
or dealers to participate. Broker-dealer transactions may include:
|
·
|
purchases
of the securities by a broker-dealer as principal and resales of
the
securities by the broker-dealer for its account pursuant to this
prospectus;
|
11
|
·
|
ordinary
brokerage transactions; or
|
|
·
|
transactions
in which the broker-dealer solicits
purchasers.
|
In
addition, we may sell any securities covered by this prospectus in private
transactions or under Rule 144 of the Securities Act of 1933, as amended, or
“Securities Act,” rather than pursuant to this prospectus.
In
connection with the sale of securities covered by this prospectus,
broker-dealers may receive commissions or other compensation from us in the
form
of commissions, discounts or concessions. Broker-dealers may also receive
compensation from purchasers of the securities for whom they act as agents
or to
whom they sell as principals or both. Compensation as to a particular
broker-dealer may be in excess of customary commissions or in amounts to be
negotiated. In connection with any underwritten offering, underwriters may
receive compensation in the form of discounts, concessions or commissions from
us or from purchasers of the securities for whom they act as agents.
Underwriters may sell the securities to or through dealers, and such dealers
may
receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act
as
agents. Any underwriters, broker-dealers agents or other persons acting on
our
behalf that participate in the distribution of the securities may be deemed
to
be “underwriters” within the meaning of the Securities Act, and any profit on
the sale of the securities by them and any discounts, commissions or concessions
received by any of those underwriters, broker-dealers agents or other persons
may be deemed to be underwriting discounts and commissions under the Securities
Act.
In
connection with the distribution of the securities covered by this prospectus
or
otherwise, we may enter into hedging transactions with broker-dealers or other
financial institutions. In connection with such transactions, broker-dealers
or
other financial institutions may engage in short sales of our securities in
the
course of hedging the positions they assume with us. We may also sell securities
short and deliver the securities offered by this prospectus to close out our
short positions. We may also enter into option or other transactions with
broker-dealers or other financial institutions, which require the delivery
to
such broker-dealer or other financial institution of securities offered by
this
prospectus, which securities such broker-dealer or other financial institution
may resell pursuant to this prospectus, as supplemented or amended to reflect
such transaction. We may also from time to time pledge our securities pursuant
to the margin provisions of our customer agreements with our brokers. Upon
our
default, the broker may offer and sell such pledged securities from time to
time
pursuant to this prospectus, as supplemented or amended to reflect such
transaction.
At
any
time a particular offer of the securities covered by this prospectus is made,
a
revised prospectus or prospectus supplement, if required, will be distributed
which will set forth the aggregate amount of securities covered by this
prospectus being offered and the terms of the offering, including the name
or
names of any underwriters, dealers, brokers or agents, any discounts,
commissions, concessions and other items constituting compensation from us
and
any discounts, commissions or concessions allowed or reallowed or paid to
dealers. Such prospectus supplement, and, if necessary, a post-effective
amendment to the registration statement of which this prospectus is a part,
will
be filed with the Commission to reflect the disclosure of additional information
with respect to the distribution of the securities covered by this prospectus.
In order to comply with the securities laws of certain states, if applicable,
the securities sold under this prospectus may only be sold through registered
or
licensed broker-dealers. In addition, in some states the securities may not
be
sold unless they have been registered or qualified for sale in the applicable
state or an exemption from registration or qualification requirements is
available and is complied with.
12
In
connection with an underwritten offering, we would execute an underwriting
agreement with an underwriter or underwriters. Unless otherwise indicated in
the
revised prospectus or applicable prospectus supplement, such underwriting
agreement would provide that the obligations of the underwriter or underwriters
are subject to certain conditions precedent, and that the underwriter or
underwriters with respect to a sale of the covered securities will be obligated
to purchase all of the covered securities, if any such securities are purchased.
We may grant to the underwriter or underwriters an option to purchase additional
securities at the public offering price, less any underwriting discount, as
may
be set forth in the revised prospectus or applicable prospectus supplement.
If
we grant any such option, the terms of that option will be set forth in the
revised prospectus or applicable prospectus supplement.
Pursuant
to a requirement by the Financial Industry Regulatory Authority, or “FINRA,” the
maximum commission or discount to be received by any FINRA member or independent
broker/dealer may not be greater than 8% of the gross proceeds received by
us
for the sale of any securities being registered pursuant to SEC Rule 415 under
the Securities Act.
Underwriters,
agents, brokers or dealers may be entitled, pursuant to relevant agreements
entered into with us, to indemnification by us against certain civil
liabilities, including liabilities under the Securities Act that may arise
from
any untrue statement or alleged untrue statement of a material fact, or any
omission or alleged omission to state a material fact in this prospectus, any
supplement or amendment hereto, or in the registration statement of which this
prospectus forms a part, or to contribution with respect to payments which
the
underwriters, agents, brokers or dealers may be required to make.
We
will
bear all costs relating to all of the securities being registered under the
registration statement of which this prospectus is a part.
13
DESCRIPTION
OF COMMON
STOCK
A
description of our common stock can be found in our Registration Statement
on
Form 8-A, filed with the Commission on October 7, 2005.
DESCRIPTION
OF PREFERRED
STOCK
The
material terms of any series of preferred stock that we offer, together with
any
material United States federal income tax considerations relating to such
preferred stock, will be described in a prospectus supplement.
Our
amended and restated articles of incorporation authorize our board of directors
to establish one or more series of preferred stock and to determine the terms
of
and rights attaching to such preferred stock, including with respect to, among
other things, dividends, conversion, voting, redemption, liquidation,
designation and the number of shares constituting any such series. The issuance
of shares of preferred stock may have the effect of discouraging, delaying
or
preventing a change of control of us or the removal of our management. The
issuance of shares of preferred stock with voting and conversion rights may
adversely affect the voting power of the holders of shares of our common
stock.
DESCRIPTION
OF DEBT
SECURITIES
We
may
offer unsecured general obligations or secured obligations, which may be senior
(the “senior debt securities”) or subordinated (the “subordinated debt
securities”). The senior debt securities and subordinated debt
securities are together referred to in this prospectus as the “debt
securities.” Any debt securities offered pursuant to this prospectus
may be convertible debt securities. The debt securities may be issued
from time to time in one or more series, under one or more indentures, the
form
of which is attached as an exhibit to the registration statement of which this
prospectus forms a part, each dated as of a date on or prior to the issuance
of
the debt securities to which it relates. If we issue subordinated debt
securities, the terms and provisions of those securities will be set forth
in a
supplemental indenture. When we refer to an “indenture” in this prospectus, we
are referring to the applicable indenture, as supplemented by any supplemental
indenture. The indentures will be filed either as exhibits to an amendment
to
the registration statement of which this prospectus forms a part or a prospectus
supplement, or as exhibits to reports filed under the Securities Exchange Act
of
1934, as amended, or “Exchange Act,” that will be incorporated by reference into
the registration statement of which this prospectus forms a part or a prospectus
supplement. Each indenture will be subject to and governed by the Trust
Indenture Act of 1939, or “Trust Indenture Act.” If we issue any subordinated
debt securities, the description of those securities and the subordinated
indenture will be set forth in the related prospectus supplement.
The
following description of the terms of the debt securities sets forth certain
general terms and provisions. The statements below are not complete and are
subject to, and are qualified in their entirety by reference to, all of the
provisions of the applicable indenture and any applicable U.S. federal income
tax consideration, as well as any applicable modifications of, or additions
to,
the general terms of the debt securities described below, which modifications
and additions may be contained in the applicable prospectus supplement or
supplemental indenture. Accordingly, for a complete description of the terms
of
a particular issue of debt securities, the general description of the debt
securities set forth below should be read in conjunction with the applicable
prospectus supplement and indenture, as amended or supplemented from time to
time.
14
General
The
indenture will not limit the aggregate principal amount of debt securities
which
may be issued. The debt securities may be issued in one or more series. Unless
otherwise provided in a prospectus supplement, the senior debt securities will
have the same rank as all our other unsubordinated indebtedness. Each series
of
subordinated debt securities may be senior or junior to, or rank pari passu
with, our other subordinated obligations and will be entitled to
payment
only after payment on our senior indebtedness.
If
we
decide to issue any debt securities pursuant to this prospectus, we will
describe in a prospectus supplement the terms of the debt securities being
offered, including the following:
|
·
|
the
title, aggregate principal amount and authorized
denominations;
|
|
·
|
the
issue price, expressed as a percentage of the aggregate principal
amount;
|
|
·
|
the
maturity date;
|
|
·
|
the
interest rate or the method for determining the interest rate, if
any;
|
|
·
|
if
the offered debt securities provide for interest payments, the date
from
which interest will accrue, the dates on which interest will be payable,
the date on which payment of interest will commence and the regular
record
dates for interest payment dates;
|
|
·
|
whether
or not the debt securities will be secured or unsecured, and the
terms of
any secured debt;
|
|
·
|
any
optional or mandatory sinking fund provisions or conversion or
exchangeability provisions;
|
|
·
|
the
date, if any, after which and the price or prices at which the offered
debt securities may be optionally redeemed or must be mandatorily
redeemed, and any other terms and provisions of optional or mandatory
redemptions;
|
|
·
|
the
denominations in which offered debt securities of the series will
be
issuable;
|
|
·
|
if
other than the full principal amount, the portion of the principal
amount
of offered debt securities of the series which will be payable upon
acceleration or provable in
bankruptcy;
|
|
·
|
any
events of default not set forth in this
prospectus;
|
|
·
|
the
currency or currencies, including composite currencies, in which
principal, premium and interest will be payable, if other than the
currency of the United States of
America;
|
|
·
|
if
principal, premium or interest is payable, at our election or at
the
election of any holder, in a currency other than that in which the
offered
debt securities of the series are stated to be payable, the period
or
periods within which, and the terms and conditions upon which, the
election may be made;
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whether
interest will be payable in cash or additional securities at our
or the
holder’s option and the terms and conditions upon which such election may
be made;
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15
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if
denominated in a currency or currencies other than the currency of
the
United States of America, the equivalent price in the currency of
the
United States of America for purposes of determining the voting rights
of
holders of those debt securities under the applicable
indenture;
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·
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if
the amount of payments of principal, premium or interest may be determined
with reference to an index, formula or other method based on a coin
or
currency other than that in which the offered debt securities of
the
series are stated to be payable, the manner in which the amounts
will be
determined;
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whether
the indenture will provide for any covenants, including covenants
restricting our ability to pay dividends or incur additional
indebtedness;
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whether
the offered debt securities will be issued in the form of global
securities or certificates in registered or bearer
form;
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the
identity of the depository for global
securities;
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the
terms of the subordination of any series of subordinated
debt;
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any
listing on any securities exchange or quotation
system;
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additional
provisions, if any, related to defeasance and discharge of the offered
debt securities;
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·
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whether
payments on the offered debt securities will be made without withholding
or deduction for any taxes or other governmental charges in effect
on the
date of issuance of the debt securities or imposed in the
future;
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the
amount of discount or premium, if any, with which such debt securities
will be issued;
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·
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a
discussion of any material United States federal income tax considerations
applicable to the debt securities;
and
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additional
terms, preferences, rights or limitations of, or restrictions on,
the debt
securities.
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Some
or
all of the debt securities may be issued as discounted debt securities, bearing
no interest or interest at a rate which at the time of issuance is below market
rates, to be sold at a substantial discount below the stated principal amount.
One or more series of debt securities may be variable rate debt securities
that
may be exchanged for fixed rate securities. United States federal income tax
consequences and other special considerations applicable to any such securities
will be described in the applicable prospectus supplement.
We
expect
most debt securities to be issued in fully registered form without coupons,
in
denominations of $1,000 and any integral multiple thereof. Subject to the
limitations provided in the indenture and in the prospectus supplement, the
debt
securities may be transferred or exchanged at the principal corporate trust
office of the applicable trustee. No service charge will be made for any
transfer or exchange of the debt securities, but we may require payment of
a sum
sufficient to cover any tax or other governmental charge payable in connection
with these debt securities.
16
Global
Securities
We
expect
that the following provisions will generally apply to depository arrangements
for any portion of a series of debt securities to be represented by a global
security. Any additional or different terms of the depository arrangement will
be described in the applicable prospectus supplement.
The
debt
securities of a series may be issued in whole or in part in the form of one
or
more global securities that will be deposited with, or on behalf of, a
depository identified in the applicable prospectus supplement and registered
in
the name of the depository or a nominee for the depository. In such a case,
one
or more global securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
outstanding debt securities of the series to be represented by the global
security or securities. Unless and until it is exchanged in whole or in part
for
the individual debt securities in definitive certificated form, a global
security may not be transferred except as a whole by the depository for such
global security to a nominee of such depository, or by a nominee of such
depository to such depository or another nominee of such depository, or by
such
depository or any such nominee to a successor of such depository or a nominee
of
such successor, and except in the circumstances described in the applicable
prospectus supplement.
Upon
the
issuance of any global security, and the deposit of such global security with
or
on behalf of the depository for such global security, the depository will
credit, on its book-entry registration and transfer system, the respective
principal amounts of the individual debt securities represented by such global
security to the accounts of institutions that have accounts with such depository
or its nominee. The accounts to be credited will be designated by the
underwriters or agents engaging in the distribution of the debt securities
or by
us if the debt securities are offered and sold directly by us. Ownership of
beneficial interests in a global security will be limited to participating
institutions or persons that may hold interests through such participating
institutions. Ownership of beneficial interests by participating institutions
in
a global security will be shown on, and the transfer of such beneficial
interests will be effected only through, records maintained by the depository
for such global security or by its nominee. Ownership of beneficial interests
in
a global security by persons that hold such interests through participating
institutions will be shown on, and the transfer of such beneficial interests
within the participating institutions will be effected only through, records
maintained by those participating institutions. The laws of some jurisdictions
may require that purchasers of securities take physical delivery of such
securities in certificated form. Such limitations and laws may impair the
ability to transfer beneficial interests in a global security.
So
long
as the depository for a global security, or its nominee, is the registered
owner
of such global security, such depository or its nominee, as the case may be,
will be considered the sole owner or holder of the debt securities represented
by such global security for all purposes under the applicable indenture. Except
as otherwise provided in the applicable indenture and prospectus supplement,
and
except as specified below, owners of beneficial interests in a global security
will not be entitled to have debt securities of the series represented by such
global security registered in their names, will not receive or be entitled
to
receive physical delivery of any debt securities of such series in certificated
form and will not be considered the owners or holders thereof for any purposes
under the indenture. Accordingly, each person owning a beneficial interest
in a
global security must rely on the procedures of the depository and, if such
person is not a participating institution, on the procedures of the
participating institution through which such person owns its interest, to
exercise any rights of a holder under the indenture.
The
depository may grant proxies and otherwise authorize participating institutions
to give or take any request, demand, authorization, direction, notice, consent,
waiver or other action which a holder is entitled to give or take under the
applicable indenture. We understand that, under existing industry practices,
if
we request any action of holders or any owner of a beneficial interest in a
global security desires to give any notice or take any action a holder is
entitled to give or take under the applicable indenture, the depository would
authorize the participating institutions to give the notice or take the action,
and participating institutions would authorize beneficial owners owning through
such participating institutions to give the notice or take the action or would
otherwise act upon the instructions of beneficial owners owning through
them.
17
Unless
otherwise provided in the applicable prospectus supplement, payments of
principal, premium and interest on individual debt securities represented by
a
global security registered in the name of a depository or its nominee will
be
made by us to such depository or its nominee, as the case may be, as the
registered owner of such global security.
We
expect
that the depository for any debt securities represented by a global security,
or
its nominee, upon receipt of any payment of principal, premium or interest,
will
credit participating institutions’ accounts with payments in amounts
proportionate to their respective beneficial interests in the principal amount
of such global security as shown on the records of the depository or its
nominee. We also expect that payments by participating institutions to owners
of
beneficial interests in a global security held through such participating
institutions will be governed by standing instructions and customary practices,
as is now the case with the securities held for the accounts of customers in
bearer form or registered in “street names.” Such payments will be the
responsibility of such participating institutions. None of us, the trustee
for
the debt securities or any agent of ours or the trustees will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial interests in a global security, or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.
Unless
otherwise specified in the applicable prospectus supplement or indenture, a
global security of any series will be exchangeable for certificated debt
securities of the same series only if:
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the
depository for such global securities notifies us that it is unwilling
or
unable to continue as depository or such depository ceases to be
a
clearing agency registered under the Exchange Act and, in either
case, a
successor depository is not appointed by us within 90 days of such
event;
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we
in our sole discretion determine that the global security shall be
exchangeable for certificated debt securities;
or
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·
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there
shall have occurred and be continuing an event of default under the
applicable indenture with respect to the debt securities of that
series.
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If
definitive debt securities are issued, an owner of a beneficial interest in
the
global security will be entitled to physical delivery of individual debt
securities in certificated form of the series represented by that global
security equal in principal amount to their beneficial interest, and to have
the
debt securities in certificated form registered in their name.
Covenants
The
covenants, if any, that will apply to a particular series of debt securities
will be set forth in the indenture relating to such series of debt securities
and described in a prospectus supplement. These covenants may limit or restrict,
among other things:
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the
ability of us or our subsidiaries to incur either secured or unsecured
debt, or both;
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·
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the
ability to make certain payments, dividends, redemptions or
repurchases;
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18
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·
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our
ability to create dividend and other payment restrictions affecting
our
subsidiaries;
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our
ability to make investments;
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·
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mergers
and consolidations by us or our
subsidiaries;
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sales
of assets by us;
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our
ability to enter into transactions with
affiliates;
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our
ability to incur liens; and
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sale
and leaseback transactions.
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You
should carefully read the applicable prospectus supplement and indenture for
a
description of the specific covenants applicable to the series of debt
securities being offered.
Modification
of the Indentures
Modifications and amendments of the indenture as it applies to a series of
debt
securities may be made without notice to any holder but with the written consent
of the holders of a majority in principal amount of the then outstanding debt
securities of such series.
However,
no such modification or amendment may, without the consent of the holder of
each
outstanding debt security affected thereby:
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reduce
the principal amount of debt securities whose holders must consent
to an
amendment, modification, supplement or
waiver;
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·
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reduce
the rate of or extend the time of payment for interest on any debt
security;
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·
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reduce
the principal amount or extend the stated maturity of any debt
security;
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·
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reduce
the amount payable upon the redemption of any debt security or add
redemption provisions to any debt
security;
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·
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make
any debt security payable in money other than that stated in the
indenture
or the debt security; or
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·
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impair
the right to institute suit for the enforcement of any payment with
respect to the debt securities.
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Without
the consent of any holder, we and the trustee may amend or supplement the
indenture to surrender any right or power conferred upon us by the indenture,
to
add further covenants, restrictions, conditions or provisions for the protection
of holders, to cure any ambiguity, omission, defect or inconsistency, to provide
for the assumption by a successor of our obligations under the indenture as
permitted thereunder, to provide for the issuance of additional debt securities
in accordance with the limitations set forth in the indenture or to make any
other change that does not adversely affect the rights of any
holder.
19
Events
of Default
Each
of
the following constitutes an event of default with respect to a series of debt
securities:
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our
failure to pay interest (including additional interest, if applicable)
on
any debt securities within 30 days of when such amount becomes due
and
payable;
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default
in any payment of principal amount or redemption price with respect
to any
debt security when such amount becomes due and
payable;
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default
in the performance of any applicable covenant or agreement with respect
to
the debt securities or the applicable indenture which continues for
60
days after we receive notice of such
default;
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default
under any debt for money borrowed by us or any subsidiary that results
in
acceleration of the maturity of such debt, or failure to pay any
such debt
at maturity, in an aggregate amount in excess of a minimum amount
set
forth in the applicable indenture, without such debt having been
discharged or acceleration having been rescinded or annulled within
10
days after we receive notice of such
default;
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any
judgment or judgments for the payment of money (to the extent not
insured
by a reputable and creditworthy insurer that has not contested coverage
with respect to the underlying claim) in an aggregate amount in excess
of
a minimum amount set forth in the applicable indenture that shall
be
rendered against us or any subsidiary and that shall not be waived,
satisfied or discharged for any period of 60 consecutive days during
which
a stay of enforcement shall not be in effect;
and
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certain
events of bankruptcy, insolvency or reorganization affecting us or
any of
our significant subsidiaries.
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There
may
be such other or different events of default as described in the applicable
prospectus supplement and indenture with respect to any class or series of
offered debt securities.
A
default
under the third bullet point above is not an event of default until the trustee
or the holders of not less than 25% in aggregate principal amount of the debt
securities of such series then outstanding notify us of the default and we
do
not cure such default within the time specified after receipt of such notice.
Such notice must specify the default, demand that it be remedied and state
that
such notice is a “Notice of Default.”
We
will
deliver to the trustee, within 30 days after the occurrence thereof,
written notice in the form of an officers’ certificate of any event that with
the giving of notice or the lapse of time or both would become an event of
default, its status and what action we are taking or propose to take with
respect thereto.
If
an event of default (other than an event of default resulting from certain
events involving bankruptcy, insolvency or reorganization with respect to us)
shall have occurred and be continuing, the trustee or the registered holders
of
not less than 25% in aggregate principal amount of the debt securities of such
series then outstanding may declare, by notice to us in writing (and to the
trustee, if given by holders of such debt securities) specifying the event
of
default, to be immediately due and payable the principal amount of all the
debt
securities in such series then outstanding, plus accrued but unpaid interest
to
the date of acceleration. In case an event of default resulting from certain
events of bankruptcy, insolvency or reorganization with respect to us shall
occur, such amount with respect to all the debt securities shall be due and
payable immediately without any declaration or other act on the part of the
trustee or the holders of the debt securities. After any such acceleration,
but
before a judgment or decree based on acceleration is obtained by the trustee,
the registered holders of a majority in aggregate principal amount of the debt
securities of such series then outstanding may, under certain circumstances,
rescind and annul such acceleration and waive such event of default if all
events of default, other than the nonpayment of accelerated principal, premium
or interest, have been cured or waived as provided in the
indenture.
20
In
addition, the holders of at least a majority in principal amount of the then
outstanding debt securities of a series may waive an existing default and its
consequences under the indenture, except a default in the payment of principal
or interest and in respect of certain covenants and provisions of the indenture
which cannot be amended without the consent of the holder of each outstanding
debt security in a series.
Subject
to the provisions of the indenture relating to the duties of the trustee, in
case an event of default shall occur and be continuing, the trustee will be
under no obligation to exercise any of its rights or powers under the indenture
at the request or direction of any of the holders of the debt securities, unless
such holders shall have offered to the trustee indemnity or security reasonably
satisfactory to it against any loss, liability or expense. Subject to such
provisions for the indemnification of the trustee, the holders of a majority
in
aggregate principal amount of the debt securities then outstanding will have
the
right to direct the time, method and place of conducting any proceeding for
any
remedy available to the trustee or exercising any trust or power conferred
on
the trustee with respect to the debt securities.
No
holder
of debt securities will have any right to institute any proceeding with respect
to the indenture, or for the appointment of a receiver or trustee, or for any
remedy thereunder, unless:
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such
holder has previously given to the trustee written notice of a continuing
event of default;
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the
registered holders of at least 25% in aggregate principal amount
of the
debt securities of such series then outstanding have made a written
request and offered indemnity to the trustee reasonably satisfactory
to it
to institute such proceeding as trustee;
and
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·
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the
trustee shall not have received from the registered holders of a
majority
in aggregate principal amount of the debt securities of such series
then
outstanding a direction inconsistent with such request and shall
have
failed to institute such proceeding within 60
days.
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However,
such limitations do not apply to a suit instituted by a holder of any debt
security for enforcement of payment of the principal of, and premium, if any,
or
interest on, such debt security on or after the respective due dates expressed
in such debt security.
If
a default with respect to the debt securities occurs and is continuing and
is
known to the trustee, the trustee must mail to each holder notice of the default
within 90 days after it occurs. The trustee may withhold the notice if and
so long as a committee of its trust officers in good faith determines that
withholding notice is in the interest of the holders of the debt
securities.
We
are required to furnish to the trustee, within 120 days after the end of
each fiscal year, a statement of an officer regarding compliance with the
indenture. Within 30 days after the occurrence of any default or event of
default, we are required to deliver to the trustee written notice in the form
of
an officer’s certificate a statement specifying our status and what actions we
are taking or propose to take with respect thereto.
21
Defeasance
and Discharge
We
may terminate at any time all our obligations with respect to any series of
debt
securities and the applicable indenture, which we refer to in this prospectus
as
“legal defeasance,” except for certain obligations, including those respecting
the defeasance trust, to replace mutilated, destroyed, lost or stolen debt
securities and to maintain a registrar and paying agent in respect of the debt
securities. In addition, we may also terminate at any time our obligations
with
respect to any series of debt securities with respect to certain covenants
that
are described in the applicable indenture, which we refer to in this prospectus
as “covenant defeasance,” except for certain covenants, including the covenant
to make payments in respect of the principal, premium, if any, and interest
on
the debt securities. In the event covenant defeasance occurs, certain events
(not including nonpayment, bankruptcy, receivership, reorganization and
insolvency events) described under “—Events of Default” will no longer
constitute events of default with respect to the debt securities. We may
exercise the legal defeasance option notwithstanding our prior exercise of
the
covenant defeasance option.
If
we exercise our legal defeasance option with respect to a series of debt
securities, payment of such debt securities may not be accelerated because
of an
event of default with respect thereto. If we exercise the covenant defeasance
option with respect to a series of debt securities, payment of such debt
securities may not be accelerated because of an event of default specified
in
the third bullet point under “—Events of Default.”
The
legal defeasance option or the covenant defeasance option with respect to a
series of debt securities may be exercised only if:
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we
irrevocably deposit in trust with the trustee money or U.S. Government
obligations or a combination thereof for the payment of principal
of and
interest on such debt securities to
maturity;
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·
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we
deliver to the trustee a certificate from a nationally recognized
firm of
independent registered public accountants expressing their opinion
that
the payments of principal and interest when due on the deposited
U.S.
Government obligations plus any deposited money without investment
will
provide cash at such times and in such amounts as will be sufficient
to
pay principal and interest when due on all the debt securities to
maturity;
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·
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123 days
pass after the deposit is made and during the 123-day period no default
described in the sixth bullet point under “—Events of Default” occurs with
respect to us or any other person making such deposit which is continuing
at the end of the period;
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·
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no
default or event of default has occurred and is continuing on the
date of
such deposit;
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such
deposit does not constitute a default under any other agreement or
instrument binding us;
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·
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we
deliver to the trustee an opinion of counsel to the effect that the
trust
resulting from the deposit does not require registration under the
Investment Company Act of 1940;
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·
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in
the case of the legal defeasance option, we deliver to the trustee
an
opinion of counsel stating that:
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·
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we
have received from the IRS a ruling;
or
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·
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since
the date of the indenture there has been a change in the applicable
U.S.
Federal income tax law, to the effect, in either case, that, and
based
thereon such opinion of counsel shall confirm that, the holders of
such
debt securities will not recognize income, gain or loss for U.S.
Federal
income tax purposes as a result of such defeasance and will be subject
to
U.S. Federal income tax on the same amounts, in the same manner and
at the
same time as would have been the case if such defeasance had not
occurred;
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22
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·
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in
the case of the covenant defeasance option, we deliver to the trustee
an
opinion of counsel to the effect that the holders of such debt securities
will not recognize income, gain or loss for U.S. Federal income tax
purposes as a result of such covenant defeasance and will be subject
to
U.S. Federal income tax on the same amounts, in the same manner and
at the
same times as would have been the case if such covenant defeasance
had not
occurred; and
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·
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we
deliver to the trustee an officers’ certificate and an opinion of counsel,
each stating that all conditions precedent to the defeasance and
discharge
of such debt securities have been complied with as required by the
indenture.
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A
prospectus supplement will further describe the provisions, if any, of any
particular series of offered debt securities permitting a discharge
defeasance.
Discharge
of the Indenture
When
(i) we deliver to the trustee all outstanding debt securities of a series
(other than debt securities replaced because of mutilation, loss, destruction
or
wrongful taking) for cancellation or (ii) all outstanding debt securities
of a series have become due and payable, whether at maturity or as a result
of
the mailing of a notice of redemption, and we irrevocably deposit with the
trustee funds sufficient to pay at maturity or upon redemption all outstanding
debt securities of a series, including interest thereon, and if in either case
we pay all other sums related to such debt securities payable under the
indenture by us, then the indenture shall, subject to certain surviving
provisions, cease to be of further effect as to all outstanding debt securities
of such series. The trustee shall acknowledge satisfaction and discharge of
the
indenture with respect to such series of debt securities on our demand
accompanied by an officers’ certificate and an opinion of counsel.
Regarding
the Trustee
Except
during the continuance of an event of default, the trustee will perform only
such duties as are specifically set forth in the indenture. During the existence
of an event of default, the trustee will exercise such rights and powers vested
in it under the indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise under the circumstances in the
conduct of such person’s own affairs.
The
indenture and provisions of the Trust Indenture Act that are incorporated by
reference therein contain limitations on the rights of the trustee, should
it
become one of our creditors, to obtain payment of claims in certain cases or
to
realize on certain property received by it in respect of any such claim as
security or otherwise. The trustee is permitted to engage in other transactions
with us or any of our affiliates; provided, however, that if it acquires any
conflicting interest (as defined in the indenture or in the Trust Indenture
Act), it must eliminate such conflict or resign.
No
Recourse
None
of our directors, officers, employees, stockholders or affiliates, as such,
will
have any liability for any of our obligations under the debt securities or
the
indenture. Each holder will waive and release all such liability subject to
any
liability imposed by the Securities Act or the Trust Indenture Act.
23
Provisions
Applicable Only To Subordinated Debt Securities
As
set forth in a prospectus supplement, the subordinated debt securities may
be
senior or junior to, or rank pari passu with, our other subordinated
obligations and will be subordinated to all of our existing and future senior
indebtedness, as may be defined in the applicable prospectus
supplement.
EXPERTS
Our
consolidated and predecessor combined financial statements appearing in our
annual report on Form 20-F for the year ended December 31, 2006, have been
audited by Ernst & Young LLP, an independent registered public accounting
firm, as set forth in their report thereon, included therein, and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such report given on the authority of
such
firm as experts in accounting and auditing.
LEGAL
MATTERS
The
validity of the securities offered by this prospectus and certain other matters
relating to Marshall Islands law will be passed upon for us by Reeder &
Simpson P.C. Certain other legal matters relating to United States law will
be
passed upon for us by Cravath, Swaine & Moore LLP, New York, New York.
Certain legal matters will be passed upon for any underwriters, dealers or
agents by Simpson Thacher & Bartlett LLP, New York, New York.
DISCLOSURE
OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT ISSUES
Our
bylaws provide that we shall, subject to the limitations contained in the
Marshall Islands Business Corporation Act, as amended from time to time,
indemnify all persons whom it may indemnify pursuant thereto.
The
form of underwriting agreement, which is filed as Exhibit 1.1 to the
registration statement of which this prospectus forms a part, provides that
the
underwriters to be named therein agree to indemnify us and hold us harmless,
together with each of our directors, officers or controlling persons from and
against certain liabilities, including liabilities arising under the Securities
Act. This form of underwriting agreement also provides that such underwriters
will contribute to amounts paid or payable by such indemnified persons as a
result of certain liabilities under the Securities Act.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers or persons controlling the registrant pursuant
to the foregoing provisions, the registrant has been informed that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is therefore
unenforceable.
24
TAX
CONSIDERATIONS
The
following is a discussion of the material Marshall Islands and United States
federal income tax considerations relevant to an investment decision by a
“United States Holder,” as that term is defined below, with respect to the
acquisition, ownership and disposition of our common stock. This discussion
does
not purport to deal with the tax consequences of owning common stock to all
categories of investors, some of which (such as financial institutions,
regulated investment companies, real estate investment trusts, tax-exempt
organizations, insurance companies, persons holding our common stock as part
of
a hedging, integrated, conversion or constructive sale transaction or a
straddle, traders in securities that have elected the mark-to-market method
of
accounting for their securities, persons liable for alternative minimum tax,
persons who are investors in pass-through entities, dealers in securities or
currencies and investors whose functional currency is not the United States
dollar) may be subject to special rules.
WE
RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISORS CONCERNING THE OVERALL TAX
CONSEQUENCES ARISING IN YOUR OWN PARTICULAR SITUATION UNDER UNITED STATES
FEDERAL, STATE, LOCAL OR FOREIGN LAW OF THE OWNERSHIP OF COMMON
STOCK.
Marshall
Islands Tax Considerations
The
following are the material Marshall Islands tax consequences of our activities
to us and stockholders of our common stock. We are incorporated in the Marshall
Islands. Under current Marshall Islands law, we are not subject to tax on income
or capital gains, and no Marshall Islands withholding tax will be imposed upon
payments of dividends by us to our stockholders.
United
States Federal Income Tax Considerations
This
discussion is based on the Internal Revenue Code of 1986, as amended (the
“Code”), Treasury regulations issued thereunder, published administrative
interpretations of the Internal Revenue Service, or “IRS,” and judicial
decisions as of the date hereof, all of which are subject to change at any
time,
possibly on a retroactive basis.
Taxation
of Operating Income: In General
Our
subsidiaries have elected to be treated as disregarded entities for U.S. federal
income tax purposes. As a result, for purposes of the discussion below, our
subsidiaries are treated as branches of us rather than as separate
corporations.
Unless
exempt from United States federal income taxation under the rules contained
in
Section 883 of the Code (discussed below), a foreign corporation is subject
to United States federal income taxation on its shipping income that is treated
as derived from sources within the United States, referred to as “United States
source shipping income.” For these purposes “shipping income” means any income
that is derived from the use of vessels, from the hiring or leasing of vessels
for use on a time, voyage or bareboat charter basis, from the participation
in a
pool, partnership, strategic alliance, joint operating agreement, code sharing
arrangement or other joint venture it directly or indirectly owns or
participates in that generates such income, or from the performance of services
directly related to those uses. For tax purposes, United States source shipping
income includes (i) 50% of shipping income that is attributable to
transportation that begins or ends, but that does not both begin and end, in
the
United States and (ii) 100% of shipping income that is attributable to
transportation that both begins and ends in the United States.
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Shipping
income attributable to transportation exclusively between non-United States
ports will be considered to be 100% derived from sources outside the United
States. Shipping income derived from sources outside the United States will
not
be subject to any United States federal income tax.
In
the
absence of exemption from tax under Section 883, our gross United States
source shipping income would be subject to a 4% tax imposed without allowance
for deductions as described below. We have not, nor do we believe we will engage
in transportation that produces income which is considered to be 100% from
sources within the United States.
Exemption
of operating income from United States federal income taxation
Under
Section 883 of the Code and the regulations thereunder, we will be exempt
from United States federal income taxation on its United States source shipping
income if:
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we
are organized in a foreign country (the “country of organization”) that
grants an “equivalent exemption” to corporations organized in the United
States; and
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either
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(A)
more
than 50% of the value of our stock
is owned, directly or indirectly, by individuals who are “residents” of our
country of organization or of another foreign country that grants an “equivalent
exemption” to corporations organized in the United States, referred to as the
“50% Ownership Test,” or
(B)
our
stock is “primarily and regularly traded on an established securities market” in
our country of organization, in another country that grants an “equivalent
exemption” to United States corporations, or in the United States, referred to
as the “Publicly-Traded Test.”
The
Marshall Islands, the jurisdiction where we and our ship-owning subsidiaries
are
incorporated, grants an “equivalent exemption” to United States corporations.
Therefore, we will be exempt from United States federal income taxation with
respect to our United States source shipping income if either the 50% Ownership
Test or the Publicly-Traded Test is met. As a result of the IPO, it is difficult
to satisfy the 50% Ownership Test due to the widely-held ownership of our
stock.
As
to the
Publicly-Traded Test, the regulations under Code Section 883 provide, in
pertinent part, that stock of a foreign corporation will be considered to be
“primarily traded” on an established securities market in a country if the
number of shares of each class of stock that is traded during any taxable year
on all established securities markets in that country exceeds the number of
shares in each such class that is traded during that year on established
securities markets in any other single country. We believe that our common
stock, which is, and will continue to be, the sole class of our issued and
outstanding stock, is, and will continue to be, “primarily traded” on the New
York Stock Exchange, which is an established securities market for these
purposes.
The
Publicly-Traded Test also requires our common stock be “regularly traded” on an
established securities market. Under the regulations, our common stock is
considered to be “regularly traded” on an established securities market if one
or more classes of our stock representing more than 50% of our outstanding
shares, by both total combined voting power of all classes of stock entitled
to
vote and total value, are listed on the market, referred to as the “listing
threshold.” The regulations further require that with respect to each class of
stock relied upon to meet the listing threshold, (i) such class of stock is
traded on the market, other than in minimal quantities, on at least 60 days
during the taxable year or 1/6 of the days in a short taxable year; and
(ii) the aggregate number of shares of such class of stock traded on such
market during the taxable year is at least 10% of the average number of shares
of such class of stock outstanding during such year (as appropriately adjusted
in the case of a short taxable year). We believe we satisfy, and will continue
to satisfy, the trading frequency and trading
volume
tests. However, even if we do not satisfy both tests, the regulations provide
that the trading frequency and trading volume tests will be deemed satisfied
if
our common stock is traded on an established market in the United States and
such stock is regularly quoted by dealers making a market in such stock. We
believe this is, and will continue to be, the case.
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Notwithstanding
the foregoing, a class of our stock will not be considered to be “regularly
traded” on an established securities market for any taxable year in which 50% or
more of the vote and value of the outstanding shares of such class are owned,
actually or constructively under certain stock attribution rules, on more than
half the days during the taxable year by persons who each own 5% or more of
the
value of such class of our outstanding stock, referred to as the “5 Percent
Override Rule.”
In
order
to determine the persons who actually or constructively own 5% or more of our
stock, or “5% Stockholders,” we are permitted to rely on those persons that are
identified on Schedule 13G and Schedule 13D filings with the
Commission as having a 5% or more beneficial interest in our common stock.
In
addition, an investment company identified on a Schedule 13G or
Schedule 13D filing which is registered under the Investment Company Act of
1940, as amended, will not be treated as a 5% Stockholder for such
purposes.
In
the
event the 5 Percent Override Rule is triggered, the 5 Percent Override Rule
will
nevertheless not apply if we can establish that among the closely-held group
of
5% Stockholders, there are sufficient 5% Stockholders that are considered to
be
“qualified stockholders” for purposes of Section 883 to preclude
non-qualified 5% Stockholders in the closely-held group from owning 50% or
more
of each class of our stock for more than half the number of days during the
taxable year.
We
believe that we have satisfied and will continue to satisfy the Publicly-Traded
Test and that the 5% Override Rule has not been and will not be applicable
to
us. However, no assurance can be given that this will be the case in the
future.
In
any
year that the 5 Percent Override Rule is triggered with respect to us, we are
eligible for the exemption from tax under Section 883 only if we can
nevertheless satisfy the Publicly-Traded Test (which requires, among other
things, showing that the exception to the 5 Percent Override Rule applies)
or if
we can satisfy the 50% Ownership Test. In either case, we would have to satisfy
certain substantiation requirements regarding the identity of our stockholders
in order to qualify for the Section 883 exemption. These requirements are
onerous and there is no assurance that we would be able to satisfy
them.
To
the
extent the benefits of Section 883 are unavailable, our United States
source shipping income, to the extent not considered to be “effectively
connected” with the conduct of a United States trade or business, as described
below, would be subject to a 4% tax imposed by Section 887 of the Code on a
gross basis, without the benefit of deductions. Since under the sourcing rules
described above, no more than 50% of our shipping income would be treated as
being United States source shipping income, the maximum effective rate of United
States federal income tax on its shipping income would never exceed 2% under
the
4% gross basis tax regime.
To
the
extent the benefits of the Section 883 exemption are unavailable and our
United States source shipping income is considered to be “effectively connected”
with the conduct of a United States trade or business, as described below,
any
such “effectively connected” United States source shipping income, net of
applicable deductions, would be subject to the United States federal corporate
income tax currently imposed at rates of up to 35%. In addition, we may be
subject to the 30% “branch profits” taxes on earnings effectively connected with
the conduct of such trade or business, as determined after allowance for certain
adjustments, and on certain interest paid or deemed paid attributable to the
conduct of our United States trade or business.
27
Our
United States source shipping income would be considered “effectively connected”
with the conduct of a United States trade or business only if:
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we
had, or were considered to have, a fixed place of business in the
United
States involved in the earning of United States source shipping income;
and
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substantially
all of our United States source shipping income was attributable
to
regularly scheduled transportation, such as the operation of a vessel
that
followed a published schedule with repeated sailings at regular intervals
between the same points for voyages that begin or end in the United
States.
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We
do not
have, nor will we permit circumstances that would result in having, any vessel
sailing to or from the United States on a regularly scheduled basis. Based
on
the foregoing and on the expected mode of our shipping operations and other
activities, we believe that none of our United States source shipping income
is
or will be “effectively connected” with the conduct of a United States trade or
business.
United
States taxation of gain on sale of vessels
Regardless
of whether we qualify for exemption under Section 883, we will not be
subject to United States federal income taxation with respect to gain realized
on a sale of a vessel, provided the sale is considered to occur outside of
the
United States under United States federal income tax principles. In general,
a
sale of a vessel will be considered to occur outside of the United States for
this purpose if title to the vessel, and risk of loss with respect to the
vessel, pass to the buyer outside of the United States. It is expected that
any
sale of a vessel will be considered to occur outside of the United
States.
United
States Federal Income Taxation of “United States Holders”
As
used
herein, the term “United States Holder” means a beneficial owner of common stock
that:
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is
an individual United States citizen or resident, a United States
corporation or other United States entity taxable as a corporation,
an
estate the income of which is subject to United States federal income
taxation regardless of its source, or a trust if a court within the
United
States is able to exercise primary jurisdiction over the administration
of
the trust and one or more United States persons have the authority
to
control all substantial decisions of the
trust;
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owns
our common stock as a capital asset;
and
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owns
less than 10% of our common stock for United States federal income
tax
purposes.
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If
a
partnership holds our common stock, the tax treatment of a partner will
generally depend upon the status of the partner and upon the activities of
the
partnership. If you are a partner in a partnership holding our common stock,
we
suggest that you consult your tax advisor.
Distributions
Subject
to the discussion of passive foreign investment companies, or “PFICs,” below,
any distributions made by us with respect to our common stock to a United States
Holder will generally constitute dividends to the extent of its current or
accumulated earnings and profits, as determined under United States federal
income tax principles. Distributions in excess of such earnings and profits
will
be treated first as a nontaxable return of capital to the extent of the United
States Holder's tax basis in his common stock on a dollar-for-dollar basis
and
thereafter as capital gain. Because we are not a United States corporation,
United States Holders that are corporations will not be entitled to claim a
dividends received deduction with respect to any distributions they receive
from
us. Dividends paid with respect to our common stock will generally be treated
as
“passive income” for purposes of computing allowable foreign tax credits for
United States foreign tax credit purposes.
28
Dividends
paid on our common stock to a United States Holder who is an individual, trust
or estate (a “United States Non-Corporate Holder”) will generally be treated as
“qualified dividend income” that is taxable to such United States Non-Corporate
Holder at a preferential tax rate of 15% (through 2010) provided that
(1) the common stock is readily tradable on an established securities
market in the United States (such as the New York Stock Exchange); (2) we
are not a PFIC for the taxable year during which the dividend is paid or the
immediately preceding taxable year (see discussion below); (3) the United
States Non-Corporate Holder has owned the common stock for more than
60 days in the 121-day period beginning 60 days before the date on
which the common stock becomes ex-dividend; and (4) the United States
Non-Corporate Holder is not under an obligation to make related payments with
respect to positions in substantially similar or related property. Special
rules
may apply to any “extraordinary dividend”—generally, a dividend in an amount
which is equal to or in excess of 10% of a stockholder's adjusted basis in
a
share of common stock—paid by us. If we pay an “extraordinary dividend” on our
common stock that is treated as “qualified dividend income,” then any loss
derived by a United States Non-Corporate Holder from the sale or exchange of
such common stock will be treated as long-term capital loss to the extent of
such dividend. There is no assurance that any dividends paid on our common
stock
will be eligible for these preferential rates in the hands of a United States
Non-Corporate Holder, although we believe that they will be so eligible provided
that we are not a PFIC, as discussed below. Any dividends out of earnings and
profits we pay which are not eligible for these preferential rates will be
taxed
at ordinary income rates in the hands of a United States Non-Corporate
Holder.
In
addition, even if we are not a PFIC, under proposed legislation, dividends
of a
corporation incorporated in a country without a “comprehensive income tax
system” paid to United States Non-Corporate Holders would not be eligible for
the 15% tax rate. Although the term “comprehensive income tax system” is not
defined in the proposed legislation, we believe this rule would apply to us
because we are incorporated in the Marshall Islands.
Sale,
exchange or other disposition of common stock
Provided
that we are not a PFIC for any taxable year, a United States Holder generally
will recognize taxable gain or loss upon a sale, exchange or other disposition
of our common stock in an amount equal to the difference between the amount
realized by the United States Holder from such sale, exchange or other
disposition and the United States Holder's tax basis in such stock.
Such
gain
or loss will be treated as long-term capital gain or loss if the United States
Holder's holding period is greater than one year at the time of the sale,
exchange or other disposition. Such capital gain or loss will generally be
treated as United States source income or loss, as applicable, for United States
foreign tax credit purposes. Long-term capital gains of United States
Non-Corporate Holders are eligible for reduced rates of taxation. A United
States Holder's ability to deduct capital losses against ordinary income is
subject to certain limitations.
29
PFIC
status and significant tax consequences
Special
United States federal income tax rules apply to a United States Holder that
holds stock in a foreign corporation classified as a PFIC for United States
federal income tax purposes. In particular, United States Non-Corporate Holders
will not be eligible for the 15% tax rate on qualified dividends. In general,
we
will be treated as a PFIC with respect to a United States Holder if, for any
taxable year in which such holder held its common stock, either:
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at
least 75% of our gross income for such taxable year consists of passive
income (e.g., dividends, interest, capital gains and rents derived
other
than in the active conduct of a rental business),
or
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at
least 50% of the average value of our assets during such taxable
year
produce, or are held for the production of, passive
income.
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Income
earned, or deemed earned, by us in connection with the performance of services
would not constitute passive income. By contrast, rental income would generally
constitute “passive income” unless we were treated under specific rules as
deriving our rental income in the active conduct of a trade or
business.
Cravath,
Swaine & Moore LLP (“Tax Counsel”) provided us with an opinion dated June
27, 2007, stating that it was more likely than not that we are not a PFIC.
This
opinion was based on our operations and certain representations made by OSG
and
ourselves, including representations that the terms of each Ship Management
Agreement and time charter, taken as a whole, as well as certain specific terms
in each agreement, were in accordance with normal commercial practice for
agreements made at arm's length between unrelated parties. Based on the
foregoing, Tax Counsel concluded that, although there was no legal authority
directly on point, the gross income we derived from the time chartering
activities of our subsidiaries more likely than not constituted services income,
rather than rental income. Consequently, such income more likely than not did
not constitute passive income, and the assets that we or our wholly owned
subsidiaries owned and operated in connection with the production of such
income, in particular, the vessels, more likely than not did not constitute
passive assets for purposes of determining whether we were a PFIC. Tax Counsel
stated that there was legal authority supporting its position, consisting of
case law and IRS pronouncements, concerning the characterization of income
derived from time charters as services income for other tax purposes. However,
there was no legal authority specifically relating to the statutory provisions
governing PFICs or relating to circumstances substantially similar to that
of
us. In addition, the opinion of Tax Counsel was based on representations of
OSG
and ourselves that were not reviewed by the IRS. As a result, the IRS or a
court
could disagree with our position. No assurance can be given that this result
will not occur. We have not materially changed the operations of our initial
fleet since the time the opinion was given, and believe that the representations
concerning the initial fleet given to Tax Counsel at the time of the opinion
remain true and accurate. We do not believe that the acquisition of our two
additional Suezmax tankers (which will be bareboat chartered to subsidiaries
of
OSG) will result in us being classified as a PFIC because these two new Suezmax
tankers will represent less than 50% of our assets. Thus, we expect that in
connection with the closing of each offering under this prospectus, Tax Counsel
will issue an opinion in form and substance substantially similar to the opinion
issued by Tax Counsel on June 27, 2007. We therefore believe that we have not
been, and are not currently, a PFIC. In addition, although we intend to conduct
our affairs in a manner to avoid, to the extent possible, being classified
as a
PFIC with respect to any taxable year, we cannot assure you that the nature
of
our operations will not change in the future, or that we can avoid PFIC status
in the future.
As
discussed more fully below, if we were treated as a PFIC for any taxable year,
a
United States Holder would be subject to different taxation rules depending
on
whether the United States Holder made an election to treat us as a “Qualified
Electing Fund,” which election is referred to as a “QEF election.” As an
alternative to making a QEF election, a United States Holder should be able
to
make a “mark-to-market” election with respect to our common stock, as discussed
below.
30
Taxation
of United States Holders making a timely QEF election
If
we
were a PFIC and a United States Holder made a timely QEF election, which United
States Holder is referred to as an “Electing Holder,” the Electing Holder would
report each year for United States federal income tax purposes its pro rata
share of our ordinary earnings and our net capital gain (which gain shall not
exceed our earnings and profits for the taxable year), if any, for our taxable
year that ends with or within the taxable year of the Electing Holder,
regardless of whether or not distributions were received from us by the Electing
Holder. Any such ordinary income would not be eligible for the preferential
tax
rates applicable to qualified dividend income as discussed above. The Electing
Holder's adjusted tax basis in the common stock would be increased to reflect
taxed but undistributed earnings and profits. Distributions of earnings and
profits that had been previously taxed would, pursuant to this election, result
in a corresponding reduction in the adjusted tax basis in the common stock
and
would not be taxed again once distributed. An Electing Holder would not,
however, be entitled to a deduction for its pro rata share of any losses that
we
incurred with respect to any year. An Electing Holder would generally recognize
capital gain or loss on the sale, exchange or other disposition of our common
stock. A United States Holder would make a QEF election with respect to any
year
that we are a PFIC by filing one copy of IRS Form 8621 with his United
States federal income tax return. If we were treated as a PFIC for any taxable
year, we would provide each United States Holder with all necessary information
in order to make the QEF election described above. Even if a United States
Holder makes a QEF election for one of our taxable years, if we were a PFIC
for
a prior taxable year during which the holder was a stockholder and for which
the
holder did not make a timely QEF election, different and more adverse tax
consequences would apply.
Taxation
of United States Holders making a
“mark-to-market” election
Alternatively,
if we were treated as a PFIC for any taxable year and, as we believe, our stock
is treated as “marketable stock,” a United States Holder would be allowed to
make a “mark-to-market” election with respect to our common stock, provided the
United States Holder completes and files IRS Form 8621 in accordance with
the relevant instructions and related Treasury regulations. If that election
is
made, the United States Holder generally would include as ordinary income in
each taxable year the excess, if any, of the fair market value of the common
stock at the end of the taxable year over such holder’s adjusted tax basis in
the common stock. The United States Holder would also be permitted an ordinary
loss in respect of the excess, if any, of the United States Holder’s adjusted
tax basis in the common stock over its fair market value at the end of the
taxable year, but only to the extent of the net amount previously included
in
income as a result of the mark-to-market election. A United States Holder's
tax
basis in his common stock would be adjusted to reflect any such income or loss
amount. Gain realized on the sale, exchange or other disposition of our common
stock would be treated as ordinary income, and any loss realized on the sale,
exchange or other disposition of the common stock would be treated as ordinary
loss to the extent that such loss does not exceed the net mark-to-market gains
previously included by the United States Holder in income.
Taxation
of United States Holders not making a timely QEF or
“mark-to-market” election
Finally,
if we were treated as a PFIC for any taxable year, a United States Holder who
does not make either a QEF election or a “mark-to-market” election for that
year, referred to as a “Non-Electing Holder,” would be subject to special rules
with respect to (1) any excess distribution (i.e., the portion of any
distributions received by the Non-Electing Holder on our common stock in a
taxable year in excess of 125% of the average annual distributions received
by
the Non-Electing Holder in the three preceding taxable years, or, if shorter,
the Non-Electing Holder’s holding period for the common stock), and (2) any
gain realized on the sale, exchange or other disposition of our common stock.
Under these special rules:
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the
excess distribution or gain would be allocated ratably over the
Non-Electing Holder’s aggregate holding period for the common
stock;
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the
amount allocated to the current taxable year and any taxable year
prior to
the first taxable year in which we were a PFIC during the Non-Electing
Holder’s holding period, would be taxed as ordinary income;
and
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the
amount allocated to each of the other taxable years would be subject
to
tax at the highest rate of tax in effect for the applicable class
of
taxpayer for that year, and an interest charge for the deemed deferral
benefit would be imposed with respect to the resulting tax attributable
to
each such other taxable year.
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These
penalties would not apply to a qualified pension, profit sharing or other
retirement trust or other tax-exempt organization that did not borrow money
or
otherwise utilize leverage in connection with its acquisition of our common
stock. If we were a PFIC and a Non-Electing Holder who was an individual died
while owning our common stock, such holder’s successor generally would not
receive a step-up in tax basis with respect to such stock. Certain of these
rules would apply to a United States Holder who made a QEF election for one
of
our taxable years if it were a PFIC in a prior taxable year during which the
holder was a stockholder and for which the holder did not make a QEF
election.
United
States Federal Income Taxation of “Non-United States
Holders”
A
beneficial owner of common stock (other than a partnership) that is not a United
States Holder is referred to herein as a “Non-United States
Holder.”
Dividends
on common stock
Non-United
States Holders generally will not be subject to United States federal income
tax
or withholding tax on dividends received from us with respect to our common
stock, unless that dividend income is effectively connected with the Non-United
States Holder’s conduct of a trade or business in the United States. If the
Non-United States Holder is entitled to the benefits of a United States income
tax treaty with respect to those dividends, that income is taxable only if
it is
attributable to a permanent establishment maintained by the Non-United States
Holder in the United States.
Sale,
exchange or other disposition of common stock
Non-United
States Holders generally will not be subject to United States federal income
tax
or withholding tax on any gain realized upon the sale, exchange or other
disposition of our common stock, unless:
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the
gain is effectively connected with the Non-United States Holder’s conduct
of a trade or business in the United States (and, if the Non-United
States
Holder is entitled to the benefits of an income tax treaty with respect
to
that gain, that gain is attributable to a permanent establishment
maintained by the Non-United States Holder in the United States);
or
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the
Non-United States Holder is an individual who is present in the United
States for 183 days or more during the taxable year of disposition
and other conditions are met.
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If
the
Non-United States Holder is engaged in a United States trade or business for
United States federal income tax purposes, the income from the common stock,
including dividends and the gain from the sale, exchange or other disposition
of
the stock, that is effectively connected with the conduct of that trade or
business will generally be subject to regular United States federal income
tax
in the same manner as discussed in the previous section relating to the taxation
of United States Holders. In addition, if you are a corporate Non-United States
Holder, your earnings and profits that are attributable to the effectively
connected income, which are subject to certain adjustments, may be subject
to an
additional branch profits tax at a rate of 30%, or at a lower rate as may be
specified by an applicable income tax treaty.
32
Backup
Withholding and Information Reporting
In
general, dividend payments, or other taxable distributions, made within the
United States to you will be subject to information reporting requirements
if
you are a non-corporate United States Holder. Such payments or distributions
may
also be subject to backup withholding tax if you are a non-corporate United
States Holder and you:
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fail
to provide an accurate taxpayer identification
number;
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are
notified by the IRS that you have failed to report all interest or
dividends required to be shown on your federal income tax returns;
or
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in
certain circumstances, fail to comply with applicable certification
requirements.
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Non-United
States Holders may be required to establish their exemption from information
reporting and backup withholding by certifying their status on IRS
Form W-8BEN, W-8ECI or W-8IMY, as applicable.
If
you
are a Non-United States Holder and you sell our common stock to or through
a
United States office of a broker, the payment of the proceeds is subject to
both
United States backup withholding and information reporting unless you certify
that you are a non-United States person, under penalties of perjury, or you
otherwise establish an exemption. If you sell our common stock through a
non-United States office of a non-United States broker and the sales proceeds
are paid to you outside the United States, then information reporting and backup
withholding generally will not apply to that payment. However, United States
information reporting requirements, but not backup withholding, will apply
to a
payment of sales proceeds, even if that payment is made to you outside the
United States, if you sell our common stock through a non-United States office
of a broker that is a United States person or has some other contacts with
the
United States. Such information reporting requirements will not apply, however,
if the broker has documentary evidence in its records that you are a non-United
States person and certain other conditions are met, or you otherwise establish
an exemption.
Backup
withholding tax is not an additional tax. Rather, you generally may obtain
a
refund of any amounts withheld under backup withholding rules that exceed your
income tax liability by filing a refund claim with the IRS.
33
WHERE
YOU CAN FIND ADDITIONAL
INFORMATION
We
filed
with the Commission a registration statement on Form F-3 under the Securities
Act with respect to the offer and sale of securities pursuant to this
prospectus. This prospectus, filed as a part of the registration statement,
does
not contain all of the information set forth in the registration statement
or
the exhibits and schedules thereto in accordance with the rules and regulations
of the Commission and no reference is hereby made to such omitted information.
Statements made in this prospectus concerning the contents of any contract,
agreement or other document filed as an exhibit to the registration statement
are summaries of all of the material terms of such contracts, agreements or
documents, but do not repeat all of their terms. Reference is made to each
such
exhibit for a more complete description of the matters involved and such
statements shall be deemed qualified in their entirety by such reference. The
registration statement and the exhibits and schedules thereto filed with the
Commission may be inspected, without charge, and copies may be obtained at
prescribed rates, at the public reference facility maintained by the Commission
at its principal office at 100 F Street, N.E., Washington, D.C. 20549. You
may
obtain information on the operation of the public reference facility by calling
1-800-SEC-0330. The Commission also maintains a website (http://www.sec.gov)
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission. For further
information pertaining to the common stock offered by this prospectus and Double
Hull Tankers, Inc. reference is made to the registration statement.
We
are
subject to the information and periodic reporting requirements of the Securities
Exchange Act of 1934, as amended, and we file periodic reports and other
information with the Commission. These periodic reports and other information
are available for inspection and copying at the Commission’s public reference
facilities and the web site of the Commission referred to above. As a “foreign
private issuer,” we are exempt from the rules under the Securities Exchange Act
of 1934, as amended, prescribing the furnishing and content of proxy statements
to stockholders, but we are required to furnish certain proxy statements to
stockholders under New York Stock Exchange rules. Those proxy statements are
not
expected to conform to Schedule 14A of the proxy rules promulgated under the
Securities Exchange Act of 1934, as amended. In addition, as a “foreign private
issuer,” we are exempt from the rules under the Securities Exchange Act of 1934,
as amended, relating to short swing profit reporting and liability.
The
Commission allows us to “incorporate by reference” information that we file with
it. This means that we can disclose important information to you by referring
you to those filed documents. The information incorporated by reference is
considered to be a part of this prospectus, and information that we file later
with the Commission prior to the termination of this offering will also be
considered to be part of this prospectus and will automatically update and
supersede previously filed information, including information contained in
this
document.
We
incorporate by reference the documents listed below and any future filings
made
with the Commission under Section 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended: (i) Annual Report on Form 20-F for the
year ended December 31, 2006, filed with the Commission on April 5, 2007, which
contains audited consolidated financial statements for the most recent fiscal
year for which those statements have been filed, (ii) Amendments to the Ship
Management Agreements on Form 6-K, filed with the Commission on May 17, 2007,
(iii) Financial Statements for the quarter ended March 31, 2007, filed with
the
Commission on Form 6-K on May 22, 2007, (iv) Financial Statements for the
quarter ended June 30, 2007, filed with the Commission on Form 6-K on October
29, 2007, (v) Press Release dated July 27, 2007 relating to the acquisition
of a
2001 built Suezmax tanker for $92.7 million, filed with the Commission on Form
6-K on August 1, 2007, (vi) Press Release dated September 19, 2007 relating
to
the acquisition of a 2000 built Suezmax tanker for $90.3 million, filed with
the
Commission on Form 6-K on September 19, 2007, and (vii) the Registration
Statement on Form 8-A, filed with the Commission on October 7,
2005.
34
We
are
also incorporating by reference all subsequent annual reports on Form 20-F
that
we file with the Commission and certain reports on Form 6-K that we furnish
to
the Commission after the date of this prospectus (if they state that they are
incorporated by reference into this prospectus) until we file a post-effective
amendment indicating that the offering of the securities made by this prospectus
has been terminated. In all cases, you should rely on the later information
over
different information included in this prospectus or the prospectus
supplement.
We
will
provide, free of charge upon written or oral request, to each person to whom
this prospectus is delivered, including any beneficial owner of the securities,
a copy of any or all of the information that has been incorporated by reference
into this prospectus, but which has not been delivered with the
prospectus. Requests for such information should be made to us at the
following address:
26
New
Street
St.
Helier
Jersey
JE23RA
Channel
Islands
Phone
+44
(0) 1534 639759
Email
info@dhtankers.com
You
should assume that the information appearing in this prospectus and any
accompanying prospectus supplement as well as the information we previously
filed with the Commission and incorporated by reference, is accurate as of
the
dates on the front cover of those documents only. Our business, financial
condition and results of operations and prospects may have changed since those
dates.
35
CAUTIONARY
STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
This
prospectus contains assumptions, expectations, projections, intentions and
beliefs about future events. When used in this document, words such as
“believe,” “intend,” “anticipate,” “estimate,” “project,” “forecast,” “plan,”
“potential,” “will,” “may,” “should,” and “expect” and similar expressions are
intended to identify forward-looking statements, but are not the exclusive
means
of identifying such statements. These statements are intended as
“forward-looking statements.” We may also from time to time make forward-looking
statements in our periodic reports that we will file with the Commission, other
information sent to our security holders, and other written materials. We
caution that assumptions, expectations, projections, intentions and beliefs
about future events may and often do vary from actual results and the
differences can be material. The reasons for this include the risks,
uncertainties and factors described under the section of this prospectus
entitled “Risk Factors” on page 8 of this prospectus.
All
statements in this document that are not statements of historical fact are
forward-looking statements. Forward-looking statements include, but are not
limited to, such matters as:
|
·
|
future
payments of dividends and the availability of cash for payment
of
dividends;
|
|
·
|
future
operating or financial results, including with respect to the amount
of
basic hire and additional hire that we may receive;
|
|
·
|
statements
about future, pending or recent acquisitions, business strategy,
areas of
possible expansion and expected capital spending or operating
expenses;
|
|
·
|
statements
about tanker industry trends, including charter rates and vessel
values
and factors affecting vessel supply and demand;
|
|
·
|
expectations
about the availability of vessels to purchase, the time which it
may take
to construct new vessels or vessels’ useful lives;
|
|
·
|
expectations
about the availability of insurance on commercially reasonable
terms;
|
|
·
|
our
ability to repay our credit facility, to obtain additional financing
and
to obtain replacement charters for our vessels;
|
|
·
|
assumptions
regarding interest rates;
|
|
·
|
changes
in production of or demand for oil and petroleum products, either
globally
or in particular regions;
|
|
·
|
greater
than anticipated levels of newbuilding orders or less than anticipated
rates of scrapping of older vessels;
|
|
·
|
changes
in trading patterns for particular commodities significantly impacting
overall tonnage requirements;
|
|
·
|
change
in the rate of growth of the world and various regional
economies;
|
|
·
|
risks
incident to vessel operation, including discharge of pollutants;
and
|
|
·
|
unanticipated
changes in laws and
regulations.
|
We
undertake no obligation to publicly update or revise any forward-looking
statements contained in this prospectus, whether as a result of new information,
future events or otherwise, except as required by law. In light of these risks,
uncertainties and assumptions, the forward-looking events discussed in this
prospectus might not occur, and our actual results could differ materially
from
those anticipated in these forward-looking statements.
36
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
8. Indemnification of Directors and Officers.
Our
bylaws provide that we shall, subject to the limitations contained in the
Marshall Islands Business Corporation Act, as amended from time to time,
indemnify all persons whom it may indemnify pursuant thereto.
The
form
of underwriting agreement, which is filed as Exhibit 1.1 to this registration
statement, provides that the underwriters to be named therein agree to indemnify
us and hold us harmless, together with each of our directors, officers and
controlling persons from and against certain liabilities, including liabilities
arising under the Securities Act of 1933, as amended. This form of underwriting
agreement also provides that such underwriters will contribute to amounts paid
or payable by such indemnified persons as a result of certain liabilities under
the Securities Act of 1933, as amended.
II-1
Item
9. Exhibits.
The
exhibits listed in the following table have been filed as part of this
registration statement.
|
Number
|
Exhibit
Description
|
|
|
1.1
|
|
Form
of Underwriting Agreement*
|
|
3.1
|
Amended
and Restated Articles of Incorporation of Double Hull Tankers,
Inc.**
|
|
|
3.2
|
Bylaws
of Double Hull Tankers, Inc.***
|
|
|
4.1
|
|
Form
of Debt Securities Indenture*
|
|
4.2
|
Registration
Rights Agreement**
|
|
|
5.1
|
Opinion
of Reeder & Simpson P.C.*
|
|
|
8.1
|
Tax
Opinion of Cravath, Swaine & Moore LLP*
|
|
|
10.1
|
Form
of Credit Agreement**
|
|
|
10.2.1
|
Time
Charter—Overseas Ann**
|
|
|
10.2.2
|
Time
Charter—Overseas Chris**
|
|
|
10.2.3
|
Time
Charter—Overseas Regal**
|
|
|
10.2.4
|
Time
Charter—Overseas Cathy**
|
|
|
10.2.5
|
Time
Charter—Overseas Sophie**
|
|
|
10.2.6
|
Time
Charter—Overseas Rebecca**
|
|
|
10.2.7
|
Time
Charter—Overseas Ania**
|
|
|
10.3.1
|
Memorandum
of Agreement—Overseas Newcastle*
|
|
|
10.3.2
|
Memorandum
of Agreement—Overseas London*
|
|
|
10.4.1
|
Ship
Management Agreement—Overseas Ann**
|
|
|
10.4.2
|
Ship
Management Agreement —Overseas Chris**
|
|
|
10.4.3
|
Ship
Management Agreement —Overseas Regal**
|
|
|
10.4.4
|
Ship
Management Agreement —Overseas Cathy**
|
|
|
10.4.5
|
Ship
Management Agreement —Overseas Sophie**
|
|
|
10.4.6
|
Ship
Management Agreement —Overseas Rebecca**
|
|
|
10.4.7
|
Ship
Management Agreement —Overseas Ania**
|
|
|
10.5.1
|
Amendment
to Ship Management Agreement—Overseas Ann*****
|
|
|
10.5.2
|
Amendment
to Ship Management Agreement—Overseas Chris*****
|
|
|
10.5.3
|
Amendment
to Ship Management Agreement—Overseas Regal*****
|
|
|
10.5.4
|
Amendment
to Ship Management Agreement—Overseas Cathy*****
|
II-2
| Number |
Exhibit Description
|
|
|
10.5.5
|
Amendment
to Ship Management Agreement—Overseas Sophie*****
|
|
|
10.5.6
|
Amendment
to Ship Management Agreement—Overseas Rebecca*****
|
|
|
10.5.7
|
Amendment
to Ship Management Agreement—Overseas Ania*****
|
|
|
10.6
|
Charter
Framework Agreement**
|
|
|
10.7
|
OSG
Guaranty of Charterers’ Payments under Charters and Charter Framework
Agreement**
|
|
|
10.8
|
Double
Hull Tankers, Inc. Guaranty of Vessel Owners’ Obligations under Management
Agreement**
|
|
|
10.9
|
Double
Hull Tankers, Inc. Guaranty of Vessel Owners’ Obligations under
Charters**
|
|
|
10.10
|
Form
of Indemnity Agreement among OSG, OIN and certain subsidiaries
of DHT
related to existing recommendations**
|
|
|
10.11
|
Employment
Agreement of Ole Jacob Diesen**
|
|
|
10.11.1
|
Indemnification
Agreement for Ole Jacob Diesen**
|
|
|
10.12
|
Employment
Agreement of Eirik Ubøe****
|
|
|
10.12.1
|
Indemnification
Agreement of Eirik Ubøe****
|
|
|
10.13
|
Employment
Agreement of Tom R. Kjeldsberg***
|
|
|
10.14
|
2005
Incentive Compensation Plan**
|
|
|
12.1
|
Computation
of Ratio of Earnings to Fixed Charges*
|
|
|
21.1
|
List
of subsidiaries of Double Hull Tankers, Inc.*
|
|
|
23.1
|
Consent
of Ernst & Young LLP, independent registered public accounting
firm*
|
|
|
23.2
|
Consent
of Cravath, Swaine & Moore LLP (contained in Exhibit
8.1)*
|
|
|
23.3
|
Consent
of Reeder & Simpson P.C. (contained in Exhibit 5.1)*
|
|
|
24.1
|
Powers
of Attorney (included on signature page)*
|
|
|
*
|
Filed
herewith.
|
|
|
**
|
Incorporated
by reference to the Registration Statement filed on Form F-1 originally
filed on September 21, 2005 (Registration No. 333-128460), as
amended.
|
|
|
***
|
Incorporated
by reference to the Annual Report on Form 20-F for the fiscal year
ended December 31, 2006 filed on April 5, 2007.
|
|
|
****
|
Incorporated
by reference to the Annual Report on Form 20-F for the fiscal year
ended
December 31, 2005 filed on May 19, 2006.
|
|
|
*****
|
Incorporated
by reference to the Form 6-K filed on May 17, 2007.
|
II-3
Item
10. Undertakings.
The
undersigned registrant hereby undertakes:
|
|
(1)
|
To
file, during any period in which offers or sales are being made,
a
post-effective amendment to this registration statement, unless the
information required to be included is contained in reports filed
with or
furnished to the Commission by
the registrant pursuant to section 13 or section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in this
registration statement or is contained in a form of prospectus filed
pursuant to Rule 424(b) under the Securities Act of 1933, as amended,
that
is part of this registration
statement:
|
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities
Act
of 1933, as amended;
|
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent
a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease
in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation
from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant
to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum aggregate
offering
price set forth in the “Calculation of Registration Fee” table in the
effective registration statement;
and;
|
|
|
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
|
|
|
(2)
|
That,
for the purpose of determining any liability under the Securities
Act of
1933, as amended, each such post-effective amendment shall be deemed
to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed
to be the
initial bona fide offering thereof.
|
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any
of the
securities being registered which remain unsold at the termination
of the
offering.
|
|
|
(4)
|
To
file a post-effective amendment to the registration statement to
include
any financial statements required by Item 8.A. of Form 20-F at the
start
of any delayed offering or throughout a continuous offering. Financial
statements and information otherwise required by Section 10(a)(3)
of the
Securities Act of 1933, as amended, need not be furnished, provided
that
the registrant includes in the prospectus, by means of a post-effective
amendment, financial statements required pursuant to this paragraph
(a)(4)
and other information necessary to ensure that all other information
in
the prospectus is at least as current as the date of those financial
statements. Notwithstanding the foregoing, with respect to registration
statements on Form F-3, a post-effective amendment need not be filed
to
include financial statements and information required by Section
10(a)(3)
of the Securities Act of 1933, as amended, or Rule 3-19 under the
Securities Act of 1933, as amended, if such financial statements
and
information are contained in periodic reports filed with or furnished
to
the Commission by the registrant pursuant to Section 13 or Section
15(d)
of the Securities Exchange Act of 1934, as amended, that are incorporated
by reference in the Form F-3.
|
II-4
|
|
(5)
|
That,
for the purpose of determining liability under the Securities Act
of 1933,
as amended, to any purchaser:
|
|
|
(i)
|
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall
be
deemed to be part of this registration statement as of the date the
filed
prospectus was deemed part of and included in this registration
statement.
|
|
|
(ii)
|
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5),
or
(b)(7) as part of this registration statement for the purpose of
providing
the information required by section 10(a) of the Securities Act of
1933,
as amended, shall be deemed to be part of and included in this
registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the
issuer
and any person that is at that date an underwriter, such date shall
be
deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall be
deemed
to be the initial bona fide offering thereof. Provided, however,
that no
statement made in a registration statement or prospectus that is
part of
the registration statement or made in a document incorporated or
deemed
incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser
with a
time of contract of sale prior to such effective date, supersede
or modify
any statement that was made in the registration statement or prospectus
that was part of the registration statement or made in any such document
immediately prior to such effective
date.
|
|
|
(6)
|
That,
for the purpose of determining liability of the registrant under
the
Securities Act of 1933, as amended, to any purchaser in the initial
distribution of the securities:
|
|
|
The
undersigned registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities
to the
purchaser, if the securities are offered or sold to such purchaser
by
means of any of the following communications, the undersigned registrant
will be a seller to the purchaser and will be considered to offer
or sell
such securities to such purchaser:
|
II-5
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on
behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant
or its
securities provided by or on behalf of the undersigned registrant;
and
|
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
|
|
|
(7)
|
The
undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, as amended, each
filing of
the registrant’s annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, (and, where applicable,
each
filing of an employee benefit plan’s annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934, as amended) that is
incorporated by reference in the registration statement shall be
deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed
to be the initial bona fide offering
thereof.
|
|
|
(8)
|
The
undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus
is
sent or given, the latest annual report to security holders that
is
incorporated by reference in the prospectus and furnished pursuant
to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934, as amended; and, where interim financial information
required to be presented by Article 3 of Regulation S-X is not set
forth
in the prospectus, to deliver, or cause to be delivered to each person
to
whom the prospectus is sent or given, the latest quarterly report
that is
specifically incorporated by reference in the prospectus to provide
such
interim financial information.
|
II-6
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form F-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Oslo, Norway, on October 29,
2007.
| DOUBLE HULL TANKERS, INC. | |||
|
|
By:
|
/s/ Eirik Ubøe | |
| Eirik Ubøe | |||
| Chief Financial Officer | |||
| (Principal Financial and Accounting Officer) | |||
KNOW
ALL
PERSONS BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints each of Ole Jacob Diesen and Eirik Ubøe his or her true
and lawful attorney-in-fact and agent, with full powers of substitution and
resubstitution, for him or her and in his or her name, place and stead, in
any
and all capacities, to sign any or all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to he done, as fully for all intents and purposes as
he
or she might or could do in person, hereby ratifying and confirming all that
said attorney-in-fact and agent, or his substitute, may lawfully do or cause
to
be done by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, as amended, this registration
statement has been signed by the following persons in the capacities and on
the
date indicated.
|
Signature
|
Title
|
Date
|
|
/s/
OLE JACOB DIESEN
|
||
|
OLE
JACOB DIESEN
|
Chief
Executive Officer
(Principal
Executive Officer)
|
October
29, 2007
|
|
/s/
EIRIK UBØE
|
||
|
EIRIK
UBØE
|
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
|
October
29, 2007
|
|
/s/
ERIK A. LIND
|
||
|
ERIK
A. LIND
|
Chairman
of the
Board
|
October
29, 2007
|
|
/s/
RANDEE DAY
|
||
|
RANDEE
DAY
|
Director
|
October
29, 2007
|
|
/s/
ROLF A. WIKBORG
|
||
|
ROLF
A. WIKBORG
|
Director
|
October
29, 2007
|
|
/s/
DONALD J. PUGLISI
|
||
|
DONALD
J. PUGLISI
Managing
Director
Puglisi
& Associates
|
Authorized
Representative in the United States
|
October
29, 2007
|
Exhibit
1.1
DOUBLE
HULL TANKERS, INC.
__________
Shares
Common
Stock
($0.01
par value per Share)
UNDERWRITING
AGREEMENT
__________,
2007
UNDERWRITING
AGREEMENT
__________,
2007
_______________
Ladies
and Gentlemen:
Double
Hull Tankers, Inc., a Marshall Islands corporation (the “Company”),
proposes to issue and sell to the underwriters named in Schedule A hereto
(the “Underwriters”) for whom you are acting as representative (the
“Representative”), an aggregate of __________ shares (the
“Shares”) of common stock, $0.01 par value per share (the
“Common
Stock”), of the Company. As used in this Agreement, the term
“business day” means a day on which the New York Stock Exchange (the
“NYSE”) is open for trading and the terms “herein,” “hereof” and “hereto”
refer in each case to this Agreement as a whole and not
to any particular
section, paragraph, sentence or other subdivision of this
Agreement.
The
Company has prepared and filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively, the “Act”), with the Securities and Exchange Commission
(the “Commission”) a registration statement on Form F-3 (File No.
333-__________) under the Act, including a base prospectus, relating to Common
Stock to be sold by the Company, including the Shares. Except where the context
otherwise requires, “Registration Statement,” as used herein, means the
registration statement, as amended at the time of such registration statement’s
effectiveness for purposes of Section 11 of the Act, as such section applies
to
the Underwriters (the “Effective Time”), including (i) all documents
filed as a part thereof, (ii) all material then incorporated by reference
therein and any information deemed to be part of the registration statement
at
the Effective Time pursuant to Rule 430A or Rule 430C under the Act, and
(iii)
any registration statement filed to register the offer and sale of Shares
pursuant to Rule 462(b) under the Act (a “Rule 462(b) Registration
Statement”). Except where the context otherwise requires, the base
prospectus filed as part of the Registration Statement, in the form in which
it
was most recently filed with the Commission and furnished to the Underwriters
prior to the execution of this Agreement, is referred to herein as the “Base
Prospectus,” and the Base Prospectus, as supplemented by the final
prospectus supplement specifically relating to the offer and sale of the
Shares,
in the form filed or to be filed with the Commission pursuant to Rule 424(b)
under the Act, is referred to herein as the “Prospectus.” Except where
the context otherwise requires, the term “Preliminary Prospectus” shall
refer to the Base Prospectus, as supplemented by any preliminary prospectus
supplement specifically relating to the offer and sale of the Shares and
furnished to the Underwriters prior to the execution of this Agreement or,
if
the Base Prospectus shall not have been supplemented by such a preliminary
prospectus supplement, such term shall refer to the Base Prospectus. For
the
purposes of this Agreement, any “issuer free writing prospectus” (as defined in
Rule 433 under the Act) relating to the Shares is referred to as an “Issuer
Free Writing Prospectus.” The Underwriters have not offered or sold and will
not offer or sell, without the consent of the Company, any Shares by means
of
any “free writing prospectus” (as defined in the Rule 405 under the Act) that is
or would be required to be filed by the Underwriters with the Commission
pursuant to Rule 433 under the Act, other than an Issuer Free Writing Prospectus
listed on Schedule B hereto (each, a “Permitted Free Writing
Prospectus”).
The
Company and the Underwriters agree as follows:
1. Sale
and Purchase. Upon the basis of the representations and
warranties and subject to the terms and conditions set forth herein, the
Company
agrees to sell to the respective Underwriters, and each of the Underwriters,
severally and not jointly, agrees to purchase from the Company, the number
of
Shares set forth opposite the name of such Underwriter in Schedule A
hereto, subject to adjustment in accordance with Section 9 hereof, in each
case
at a purchase price of $__________ per Share. The Company has been advised
that
the Underwriters intend (i) to make a public offering of their respective
portions of the Shares and (ii) initially to offer the Shares upon the terms
set
forth in the Prospectus. The Underwriters may from time to time
increase or decrease the public offering price after the public offering
to such
extent as it may determine.
2. Payment
and Delivery. Payment of the purchase price for the Shares shall
be made to the Company by Federal Funds wire transfer against delivery of
the
certificates for the Shares to the Underwriters through the facilities of
The
Depository Trust Company (“DTC”) for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New
York
City time, on __________, 2007, unless another time shall be agreed to by
the
Underwriters and the Company. The time at which such payment and delivery
are to
be made is sometimes referred to herein as the “time of
purchase.” Electronic transfer of the Shares shall be made to the
Underwriters at the time of purchase in such names and in such denominations
as
the Underwriters shall specify.
Deliveries
of the documents described in Section 7 hereof with respect to the purchase
of
the Shares shall be made at the offices of Simpson Thacher & Bartlett LLP at
425 Lexington Avenue, New York, New York 10017, at 9:00 A.M., New York City
time, at or prior to the time of purchase for the Shares.
3. Representations
and Warranties of the Company. The Company represents and
warrants to and agrees with the Underwriters that:
(a) the
Registration Statement has heretofore become effective under the Act or,
with
respect to any Rule 462(b) Registration Statement, will be filed with the
Commission and become effective under the Act no later than 10:00 P.M., New
York
City time, on the date of this Agreement; no stop order of the Commission
preventing or suspending the use of any Preliminary Prospectus or any Issuer
Free Writing Prospectus nor any similar order directed to any document
incorporated by reference in the Preliminary Prospectus or the Final Prospectus,
or the effectiveness of the Registration Statement, has been issued, and
no
proceedings for such purpose have been instituted or, to the Company’s
knowledge, are contemplated by the Commission.
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(b) the
Registration Statement complied when it became effective, complies as of
the
date hereof and, as amended or supplemented, at the time of purchase and
at all
times during which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172 under the Act or any similar
rule) in connection with any sale of Shares, will comply, in all material
respects, with the requirements of the Act; the Registration Statement did
not,
as of the Effective Time, contain an untrue statement of a material fact
or omit
to state a material fact required to be stated therein or necessary to make
the
statements therein not misleading; each Preliminary Prospectus, if any,
complied, at the time it was filed with the Commission, and complies as of
the
date hereof, in all material respects with the requirements of the Act; each
Preliminary Prospectus (including the Exchange Act Documents incorporated
by
reference therein) and any amendment or supplement thereto, as of its date
and
the date it was filed with the Commission, and the most recent Preliminary
Prospectus (including the Exchange Act Documents incorporated by reference
therein), as then amended or supplemented (the “Pricing Prospectus”), as
of 9:30 a.m. on the date hereof (the “Applicable Time”), in each case
when read together with the then issued Issuer Free Writing Prospectuses,
if
any, and the information included on Schedule C hereto, did not include
an 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; the Prospectus
will
comply, as of its date, the date that it is filed with the Commission, the
time
of purchase and at all times during which a prospectus is required by the
Act to
be delivered (whether physically or through compliance with Rule 172 under
the
Act or any similar rule) in connection with any sale of Shares, in all material
respects, with the requirements of the Act; at no time during the period
that
begins on the earlier of the date of the Prospectus and the date the Prospectus
is filed with the Commission and ends at the later of the time of purchase
and
the end of the period during which a prospectus is required by the Act to
be
delivered (whether physically or through compliance with Rule 172 under the
Act
or any similar rule) in connection with any sale of Shares did or will the
Prospectus, as then amended or supplemented, include an 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; each Issuer Free Writing Prospectus, when read together
with the Pricing Prospectus, any other Issuer Free Writing Prospectuses then
issued and the information included on Schedule C hereto, as of the
Applicable Time, did not include an 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;
provided, however, that the Company makes no representation or
warranty in this Section 3(b) with respect to any statement contained in
the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
Issuer
Free Writing Prospectus in reliance upon and in conformity with information
concerning the Underwriters and furnished in writing by or on behalf of the
Underwriters to the Company expressly for use in the Registration Statement,
such Preliminary Prospectus, the Prospectus or such Issuer Free Writing
Prospectus.
(c) The
documents incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or hereafter
are
filed with the Commission, complied and will comply in all material respects
with the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the “1934 Act Regulations”) and, when read together with
the other information in the Prospectus, at the date of the Prospectus and
at
the closing time, if any, did not and will not include an 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.
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(d) the
Company has not, directly or indirectly, offered or sold any Shares by means
of
any “prospectus” (within the meaning of the Act) or used any “prospectus”
(within the meaning of the Act) in connection with the offer or sale of the
Shares other than the Preliminary Prospectus and the Permitted Free Writing
Prospectuses, if any; the Company is not and will continue not to be an
“ineligible issuer” (as defined in Rule 405 under the Act) for the purposes of
Rules 164 and Rule 433 under the Act in connection with the offer or sale
of the
Shares; and the Company has complied, and will comply, with the requirements
of
Rules 164 and Rule 433 under the Act applicable to any Issuer Free Writing
Prospectus, including in respect of timely filing with the Commission, legending
and record-keeping;
(e) the
Company has an authorized and outstanding capitalization as set forth in
the
Registration Statement, the Pricing Prospectus and the Prospectus; all of
the
issued and outstanding shares of capital stock of the Company, including
the
Shares, have been duly authorized and validly issued and are fully paid and
non-assessable, have been issued in compliance with all applicable federal
and
state securities laws and were not issued in violation of any preemptive
right,
resale right, right of first refusal or similar right; and the Shares are
duly
listed and admitted and authorized for trading on the NYSE;
(f) the
Company has been duly incorporated and is validly existing as a corporation
in
good standing under the laws of the Marshall Islands, with full corporate
power
and authority to own, lease and operate its properties and conduct its business
as described in the Registration Statement, the Pricing Prospectus and the
Prospectus and to execute and deliver this Agreement;
(g) the
Company is duly qualified to do business as a foreign corporation and is
in good
standing in each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification, except where
the
failure to be so qualified and in good standing would not, individually or
in
the aggregate, have a material adverse effect on the business, properties,
financial condition, results of operations or prospects of the Company and
the
subsidiaries of the Company named in Schedule D hereto (the
“Subsidiaries”) taken as a whole (a “Material Adverse
Effect”);
(h) the
Company has no “subsidiaries” (as defined under the Act) other than the
Subsidiaries; the Company owns all of the issued and outstanding capital
stock
of each of the Subsidiaries; other than the capital stock of the Subsidiaries,
the Company does not own, directly or indirectly, any shares of stock or
any
other equity or long-term debt securities of any corporation or have any
equity
interest in any firm, partnership, joint venture, association or other entity;
complete and correct copies of the articles of incorporation and bylaws of
the
Company and each Subsidiary and all amendments and restatements thereto have
been delivered to the Underwriters or their counsel, and, except as set forth
in
the exhibits to the Registration Statement, no changes therein will be made
on
or after the date hereof or on or before the time of purchase; each Subsidiary
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the Marshall Islands, with full corporate power
and
authority to own, lease and operate its properties and to conduct its business
as described in the Registration Statement, the Pricing Prospectus and the
Prospectus; each Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the ownership
or
leasing of its properties or the conduct of its business requires such
qualification, except where the failure to be so qualified and in good standing
would not, individually or in the aggregate, have a Material Adverse Effect;
each Subsidiary is in compliance in all respects with the laws, orders, rules,
regulations and directives issued or administered by such jurisdictions,
except
where the failure to be in compliance would not, individually or in the
aggregate, have a Material Adverse Effect; all of the outstanding shares
of
capital stock of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable, have been issued in compliance
with
all applicable federal and state securities laws, were not issued in violation
of any preemptive right, resale right, right of first refusal or similar
right
and are owned by the Company subject to no security interest, other encumbrance
or adverse claims; and no options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests in the
Subsidiaries are outstanding;
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(i) the
capital stock of the Company, including the Shares, conforms in all material
respects to the description thereof contained in the Registration Statement,
the
Pricing Prospectus and the Prospectus; the certificates for the Shares comply
with the applicable requirements of the Company’s articles of incorporation and
bylaws, any applicable laws and the rules of the NYSE; and the holders of
the
Shares will not be subject to personal liability for the debt or other
obligations of the Company by reason of being such holders;
(j) this
Agreement has been duly authorized, executed and delivered by the
Company;
(k) neither
the Company nor any of the Subsidiaries is in breach or violation of or in
default under (nor has any event occurred which with notice, lapse of time
or
both would result in any breach or violation of, constitute a default under
or
give the holder of any indebtedness (or a person acting on such holder’s behalf)
the right to require the repurchase, redemption or repayment of all or a
part of
such indebtedness under) (i) its respective articles of incorporation or
bylaws,
(ii) any indenture, mortgage, deed of trust, bank loan or credit agreement
or
other evidence of indebtedness, or any license, lease, contract or other
agreement or instrument to which the Company or any of the Subsidiaries is
a
party or by which any of them or any of their respective properties may be
bound
or affected, (iii) any federal, state, local or foreign law, regulation or
rule,
(iv) any rule or regulation of any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the
rules
and regulations of the NYSE) or (v) any decree, judgment or order applicable
to
the Company or any of the Subsidiaries or any of their respective properties,
except in the case of the foregoing clauses (ii), (iii), (iv) and (v) above
as
would, individually or in the aggregate, have a Material Adverse
Effect;
(l) the
execution, delivery and performance of this Agreement and the consummation
of
the transactions contemplated hereby will not conflict with, result in any
breach or violation of or constitute a default under (or constitute any event
which with notice, lapse of time or both would result in any breach or violation
of or constitute a default under or give the holder of any indebtedness (or
a
person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness under) (or
result
in the creation or imposition of a lien, charge or encumbrance on any property
or assets of the Company or any Subsidiary pursuant to) (i) the articles
of
incorporation or bylaws of the Company or any of the Subsidiaries, (ii) any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any license, lease, contract or other agreement
or
instrument to which the Company or any of the Subsidiaries is a party or
by
which any of them or any of their respective properties may be bound or
affected, (iii) any federal, state, local or foreign law, regulation or rule,
(iv) any rule or regulation of any self-regulatory organization or other
non-governmental regulatory authority (including, without limitation, the
rules
and regulations of the NYSE) or (v) any decree, judgment or order applicable
to
the Company or any of the Subsidiaries or any of their respective properties,
except in the case of the foregoing clauses (ii), (iii), (iv) and (v) as
would
not, individually or in the aggregate, have a Material Adverse
Effect;
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(m) no
approval, authorization, consent or order of or filing with any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency, or of or with any self-regulatory organization, other
non-governmental regulatory authority (including, without limitation, the NYSE),
is required in connection with the execution, delivery and performance of this
Agreement or the consummation by the Company of the transactions contemplated
hereby, other than registration of the Shares under the Act, which has been
effected (or, with respect to a Rule 462(b) Registration Statement, will be
effected in accordance herewith), any necessary qualification under the
securities or blue sky laws of the various jurisdictions in which the Shares
are
being offered by the Underwriters or under the rules and regulations of the
National Association of Securities Dealers, Inc. (the “NASD”) and such
approvals, authorizations, consents, orders or filings that have been obtained
or made and are in full force and effect;
(n) except
as expressly set forth in the Registration Statement, the Pricing Prospectus
and
the Prospectus, (i) no person has the right, contractual or otherwise, to cause
the Company to issue or sell to it any shares of Common Stock or shares of
any
other capital stock or other equity interests of the Company, (ii) no person
has
any preemptive rights, resale rights, rights of first refusal or other rights
to
purchase any shares of Common Stock or shares of any other capital stock of
or
other equity interests in the Company and (iii) no person has the right to
act
as an underwriter or as a financial advisor to the Company in connection with
the offer and sale of the Shares, in the case of each of the foregoing clauses
(i), (ii) and (iii), whether as a result of the filing or effectiveness of
the
Registration Statement or the sale of the Shares as contemplated thereby or
otherwise; except as expressly set forth in the Registration Statement, the
Pricing Prospectus and the Prospectus, no person has the right, contractual
or
otherwise, to cause the Company to register under the Act any shares of Common
Stock or shares of any other capital stock of or other equity interests in
the
Company, or to include any such shares or interests in the Registration
Statement or the offering contemplated thereby, whether as a result of the
filing or effectiveness of the Registration Statement or the sale of the Shares
as contemplated thereby or otherwise;
(o) each
of the Company and the Subsidiaries has all necessary licenses, authorizations,
consents and approvals and has made all necessary filings required under any
federal, state, local or foreign law, regulation or rule, and has obtained
all
necessary licenses, authorizations, consents and approvals from other persons,
in order to conduct its respective business as described in the Registration
Statement, the Pricing Prospectus and the Prospectus, except where the failure
to have such licenses, authorizations, consents and approvals or to have made
such filings would not, individually or in the aggregate, have a Material
Adverse Effect; neither the Company nor any of the Subsidiaries is in violation
of, or in default under, or has received notice of any proceedings relating
to
revocation or modification of any such license, authorization, consent or
approval or any filing required under any federal, state, local or foreign
law,
regulation or rule or any decree, order or judgment applicable to the Company
or
any of the Subsidiaries, except where such violation, default, revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect;
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(p) all
legal or governmental proceedings, affiliate transactions, off-balance sheet
transactions (including, without limitation, transactions related to, and the
existence of, “variable interest entities” within the meaning of Financial
Accounting Standards Board Interpretation No. 46), contracts, licenses,
agreements, properties, leases or documents required to be described in the
Registration Statement, the Pricing Prospectus or the Prospectus or the
documents incorporated by reference therein or to be filed as an exhibit to
the
Registration Statement have been so described or filed as required;
(q) there
are no actions, suits, claims,
investigations or proceedings pending or, to the knowledge of the Company,
threatened to which the Company or any of the Subsidiaries or any of their
respective directors or officers is or would be a party, or of which any of
their respective properties, including any vessel named in Schedule D
hereto (each, a “Vessel”),
is or would be subject, at law or
in equity, before or by any federal, state, local or foreign governmental or
regulatory commission, board, body, authority or agency, or before or by any
self-regulatory organization or other non-governmental regulatory authority,
except any such action, suit, claim, investigation or proceeding which would
not
result in a judgment, decree or order having, individually or in the aggregate,
a Material Adverse Effect and would not prevent the consummation of the
transactions contemplated hereby;
(r) Ernst
& Young LLP, whose audit reports on (i) the consolidated financial
statements of the Company as of December 31, 2005 and 2006 and for the period
from October 18, 2005 to December 31, 2005 (the “Company Financial
Statements”) and (ii) the combined financial statements of the predecessor
of the Company as of December 31, 2004 and for the period from January 1, 2005
to October 17, 2005 (the “Predecessor Financial Statements”) are included
in the Registration Statement, the Pricing Prospectus and the Prospectus, are
independent registered public accountants as required by the Act and by the
rules of the Public Company Accounting Oversight Board;
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(s) the
Company Financial Statements and the Predecessor Financial Statements included
in the Registration Statement, the Pricing Prospectus and the Prospectus,
together with the related notes thereto, present fairly in all material respects
the financial position of the Company and its predecessor, as the case may
be,
as of the dates indicated and the results of operations and cash flows of the
Company and its predecessor, as the case may be, for the periods specified
and
have been prepared in compliance with the requirements of the Act and Securities
Exchange Act of 1934, as amended (the “Exchange Act”), and in conformity
with United States generally accepted accounting principles applied on a
consistent basis during the periods involved; all pro forma financial statements
or data included in the Registration Statement, the Pricing Prospectus or the
Prospectus and indicated as being such comply with the requirements of
Regulation S-X of the Act, including, without limitation, Article 11 thereof,
and the assumptions used in the preparation of such pro forma financial
statements and data are reasonable, the pro forma adjustments used therein
are
appropriate to give effect to the transactions or circumstances described
therein and the pro forma adjustments have been properly applied to the
historical amounts in the compilation of those statements and data; the other
historical financial and related statistical data set forth in the Registration
Statement, the Pricing Prospectus or the Prospectus are accurately and fairly
presented and prepared on a basis consistent with the financial statements
and
books and records of the Company or its predecessor, as the case may be; there
are no financial statements (historical or pro forma) that are required to
be
included in the Registration Statement, the Pricing Prospectus or the Prospectus
(including, without limitation, as required by Rules 3-12 or 3-05 or Article
11
of Regulation S-X under the Act) that are not included as required; neither
the
Company nor any of the Subsidiaries has any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations), not
disclosed in the Registration Statement, the Pricing Prospectus and the
Prospectus; and all disclosures contained in the Registration Statement, the
Pricing Prospectus or the Prospectus regarding “non-GAAP financial measures” (as
such term is defined by the rules and regulations of the Commission) comply
with
Regulation G of the Exchange Act and Item 10 of Regulation S-K under the Act,
to
the extent applicable;
(t) subsequent
to the time of execution of this Agreement or, if earlier, the respective dates
as of which information is given in the Registration Statement, the Pricing
Prospectus and the Prospectus (in each case excluding any amendments or
supplements thereto made after the execution of this Agreement), there has
not
been (i) any material adverse change, or any development involving a prospective
material adverse change, in the business, properties, financial condition,
results of operations or prospects of the Company and the Subsidiaries taken
as
a whole, (ii) any obligation, direct or contingent (including any off-balance
sheet obligations), incurred by the Company or any Subsidiary, which is material
to the Company and the Subsidiaries taken as a whole, (iii) any change in the
capital stock or outstanding indebtedness of the Company or any Subsidiary
or
(iv) any dividend or distribution of any kind declared, paid or made on the
capital stock of the Company;
(u) the
Company has obtained for the benefit of the Underwriters the agreement (a
“Lock-Up Agreement”), in the form set forth as Exhibit A hereto,
of each of its directors, officers and stockholders named in Schedule E
hereto;
(v) the
Company is a “foreign private issuer” (as defined in Rule 405) of the
Act;
(w) the
Company is not and, after giving effect to the offer and sale of the Shares
and
at all times during which a prospectus is required by the Act to be delivered
(whether physically or through compliance with Rule 172 under the Act or any
similar rule) in connection with any sale of Shares, will not be an “investment
company” or an entity “controlled” by an “investment company,” as such terms are
defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”) or a “passive foreign investment company” or a “controlled
foreign corporation,” as such terms are defined in the Internal Revenue Code of
1986, as amended (the “Internal Revenue Code”);
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(x) the
Company and each of the Subsidiaries has good and marketable title to all
property (real and personal), if any, described in the Registration Statement,
the Pricing Prospectus or the Prospectus as being owned by each of them, free
and clear of all liens, claims, security interests or other encumbrances with
such exceptions as are not material and do not interfere with the intended
use
to be made of such property by the Company or its Subsidiaries as described
in
the Registration Statement, the Pricing Prospectus and the Prospectus; and
all
the property described in the Registration Statement, the Pricing Prospectus
or
the Prospectus as being held under lease by the Company or a Subsidiary is
held
thereby under valid, subsisting and enforceable leases with such exceptions
as
are not material and do not interfere with the intended use to be made of such
property by the Company or its Subsidiaries as described in the Registration
Statement, the Pricing Prospectus and the Prospectus;
(y) the
Company and the Subsidiaries own, or have obtained valid and enforceable
licenses for, or other rights to use, the inventions, patent applications,
patents, trademarks (both registered and unregistered), trade names, service
names, copyrights, trade secrets and other proprietary information described
in
the Registration Statement, the Pricing Prospectus or the Prospectus as being
owned or licensed by them or which are necessary for the conduct of their
respective businesses as currently conducted or as proposed to be conducted,
except where the failure to own, license or have such rights would not,
individually or in the aggregate, have a Material Adverse Effect (collectively,
“Intellectual Property”); (i) there are no third parties who have or, to
the Company’s knowledge, will be able to establish rights to any Intellectual
Property, except for, and to the extent of, the ownership rights of the owners
of the Intellectual Property is licensed to the Company; (ii) to the Company’s
knowledge, there is no infringement by third parties of any Intellectual
Property; (iii) there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others challenging the Company’s rights in
or to any Intellectual Property, and the Company is unaware of any facts which
could form a reasonable basis for any such action, suit, proceeding or claim;
(iv) there is no pending or, to the Company’s knowledge, threatened action,
suit, proceeding or claim by others challenging the validity, enforceability
or
scope of any Intellectual Property, and the Company is unaware of any facts
which could form a reasonable basis for any such action, suit, proceeding or
claim; (v) there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others that the Company or any Subsidiary
infringes or otherwise violates any patent, trademark, trade name, service
name,
copyright, trade secret or other proprietary rights of others, and the Company
is unaware of any facts which could form a reasonable basis for any such action,
suit, proceeding or claim; (vi) to the Company’s knowledge, there is no patent
or patent application that contains claims that interfere with the issued or
pending claims of any of the Intellectual Property; (viii) to the Company’s
knowledge, there is no prior art that may render any patent application owned
by
the Company or any Subsidiary of the Intellectual Property unpatentable that
has
not been disclosed to the U.S. Patent and Trademark Office;
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(z) neither
the Company nor any of the Subsidiaries is engaged in any unfair labor practice;
except for matters which would not, individually or in the aggregate, have
a
Material Adverse Effect, (i) there is (A) no unfair labor practice complaint
pending or, to the Company’s knowledge, threatened against the Company or any of
the Subsidiaries before the National Labor Relations Board, and no grievance
or
arbitration proceeding arising out of or under collective bargaining agreements
is pending or, to the Company’s knowledge, threatened, (B) no strike, labor
dispute, slowdown or stoppage pending or, to the Company’s knowledge, threatened
against the Company or any of the Subsidiaries and (C) no union representation
dispute currently existing concerning the employees of the Company or any of
the
Subsidiaries, and (ii) to the Company’s knowledge, (A) no union organizing
activities are currently taking place concerning the employees of the Company
or
any of the Subsidiaries and (B) there has been no violation of any federal,
state, local or foreign law relating to discrimination in the hiring, promotion
or pay of employees, any applicable wage or hour laws or any provision of the
Employee Retirement Income Security Act of 1974 (“ERISA”) or the rules
and regulations promulgated thereunder concerning the employees of the Company
or any of the Subsidiaries;
(aa) each
of the Company and the Subsidiaries and their respective properties, assets
and
operations is in compliance with, and each of the Company and the Subsidiaries
holds all permits, authorizations and approvals required under, Environmental
Laws (as hereinafter defined), except to the extent that failure to so comply
or
to hold such permits, authorizations or approvals would not, individually or
in
the aggregate, have a Material Adverse Effect; there are no past, present or,
to
the Company’s knowledge, reasonably anticipated future events, conditions,
circumstances, actions, omissions or plans that could reasonably be expected
to
give rise to any material costs or liabilities to the Company or any Subsidiary
under, or to materially interfere with or prevent compliance by the Company
or
any Subsidiary with, Environmental Laws; except as would not, individually
or in
the aggregate, have a Material Adverse Effect, neither the Company nor any
of
the Subsidiaries (i) has received any notice that it is the subject of any
investigation, (ii) has received any notice or claim, (iii) is a party to or
affected by any pending or, to the Company’s knowledge, threatened action, suit
or proceeding, (iv) is bound by any judgment, decree or order or (v) has entered
into any written indemnification or settlement 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 (as hereinafter defined) (as used herein, “Environmental Law”
means any applicable federal, state, local or foreign law, statute,
ordinance,
rule, regulation, order, decree, judgment, injunction, permit, license,
authorization or other binding requirement or common law (including any
applicable regulations and standards adopted by the International Maritime
Organization) relating to health, safety or the protection, cleanup or
restoration of the environment or natural resources, and “Hazardous
Materials” means any material (including, without limitation, pollutants,
contaminants, hazardous or toxic substances or wastes) that in relevant form
and
concentration is regulated by or may give rise to liability under any
Environmental Law);
(bb) the
Subsidiaries have arranged for the technical manager of the Vessels (the
“Technical Manager”) to conduct a periodic review of the effect of the
Environmental Laws on their respective businesses, operations and properties
for
the purposes of identifying and evaluating associated costs and liabilities
(including, without limitation, any capital or operating expenditures required
for cleanup or compliance with the Environmental Laws or any permit, license
or
approval, any related constraints on operating activities and any potential
liabilities to third parties);
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(cc) all
income and other material tax returns required to be filed by the Company or
any
of the Subsidiaries have been filed, and all taxes and other material
assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties applicable
thereto due or claimed to be due from such entities have been timely paid,
other
than those being contested in good faith and for which adequate reserves have
been provided;
(dd) the
Company and the Subsidiaries maintain or have caused the Technical Manager
to
maintain for its or their benefit, insurance or a membership in a mutual
protection and indemnity association covering its properties, operations,
personnel and businesses as deemed adequate by the Company; such insurance
or
membership insures or will insure against such losses and risks to an extent
which is adequate in accordance with customary industry practice to protect
the
Vessels and, in the case of insurance or a membership maintained by or for
the
benefit of the Company and the Subsidiaries, their businesses; any such
insurance or membership maintained by or for the benefit of the Company and
its
Subsidiaries is and will be fully in force at the time of purchase; there are
no
material claims by the Company or any Subsidiary under any insurance policy
or
instrument as to which any insurance company or mutual protection and indemnity
association is denying liability or defending under a reservation of rights
clause; neither the Company nor any of the Subsidiaries is currently required
to
make any material payment, or is aware of any facts that would require the
Company or any Subsidiary to make any material payment, in respect of a call
by,
or a contribution to, any mutual protection and indemnity association; and
neither the Company nor any Subsidiary has reason to believe that it will not
be
able to renew or cause to be renewed for its benefit any such insurance or
membership in a mutual protection and indemnity association as and when such
insurance or membership expires or is terminated;
(ee) since
the date of the last audited Company Financial Statements included in the
Registration Statement, the Pricing Prospectus and the Prospectus, (i) there
has
not been a material partial loss or total loss of or to any of the Vessels,
whether actual or constructive, (ii) no Vessel has been arrested or
requisitioned for title or hire and (iii) neither the Company nor any
of the Subsidiaries has sustained any material loss or interference with its
respective business from fire, explosion, flood or other calamity, whether
or
not covered by insurance, or from any labor dispute or court or governmental
action, order or decree;
(ff) none
of the contracts or agreements filed as an exhibit to the Registration Statement
has been terminated, amended, modified, supplemented or waived; neither the
Company nor any Subsidiary has sent or received any communication regarding
the
termination, amendment, modification, supplementation or waiver of, or an
intention to terminate, amend, modify, supplement or waive, or not to consummate
any transaction contemplated by, any such contract or agreement; and no such
termination, amendment, modification, supplementation or waiver, or intention
to
terminate, amend, modify, supplement or waive, or not to consummate any
transaction contemplated by, any such contract or agreement has been threatened
by the Company or any Subsidiary or, to the Company’s knowledge, any other party
to any such contract or agreement;
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(gg) the
Company and each of the Subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and
to
maintain accountability for assets; (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;
(hh) the
Company has established and maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-15 and 15d-15 under the
Exchange Act); such disclosure controls and procedures are designed to ensure
that material information relating to the Company, including its consolidated
subsidiaries, is made known to the Company’s Chief Executive Officer and its
Chief Financial Officer by others within those entities, and such disclosure
controls and procedures are effective to perform the functions for which they
were established; the Company’s auditors and Board of Directors of the Company
have been advised of: (i) any significant deficiencies and material weaknesses
in the design or operation of internal controls which are reasonably likely
to
adversely affect the Company’s ability to record, process, summarize, and report
financial data; and (ii) any fraud, whether or not material, that involves
management or other employees who have a role in the Company’s internal
controls; to date, the Company’s auditors have not identified any material
weaknesses in internal controls; since the date of the most recent evaluation
of
such disclosure controls and procedures, there have been no changes in internal
controls or in other factors within control of the Company that have materially
affected, or are reasonably likely to materially affect, the Company’s internal
controls; and the Company, the Subsidiaries and their respective officers and
directors, in their capacities as such, are each in compliance in all material
respects with the provisions of the Sarbanes-Oxley Act of 2002 and the rules
and
regulations promulgated thereunder that are applicable to the Company, the
Subsidiaries or such officers and directors;
(ii) the
Company has not, directly or indirectly, including through any Subsidiary,
extended credit, arranged to extend credit, or renewed any extension of credit,
in the form of a personal loan, to or for any director or executive officer
of
the Company, or to or for any family member or affiliate of any director or
executive officer of the Company;
(jj) each
“forward-looking statement” (within the meaning of Section 27A of the Act or
Section 21E of the Exchange Act) contained in the Registration Statement, the
Pricing Prospectus, the Prospectus or any Issuer Free Writing Prospectus has
been made with a reasonable basis and has been disclosed in good
faith;
(kk) all
statistical or market-related data included in the Registration Statement,
the
Pricing Prospectus, the Prospectus or any Issuer Free Writing Prospectus are
based on or derived from sources that the Company believes to be reliable and
accurate, and the Company has obtained the written consent to the use of such
data from such sources to the extent required;
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(ll) neither
the Company nor any of the Subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of
the
Subsidiaries is aware of or has taken any action, directly or indirectly, that
would result in a violation by such persons of the Foreign Corrupt Practices
Act
of 1977, as amended, and the rules and regulations thereunder (the “Foreign
Corrupt Practices Act”), 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 authorization of
the
giving of anything of value to any “foreign official” (as such term is defined
in the Foreign Corrupt Practices Act) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of
the
Foreign Corrupt Practices Act; and the Company, the Subsidiaries and, to the
Company’s knowledge, the affiliates of the Company have conducted their
businesses in compliance with the Foreign Corrupt Practices Act and have
instituted and maintain policies and procedures designed to ensure, and which
are reasonably expected to continue to ensure, continued compliance
therewith;
(mm) the
operations of the Company, the Subsidiaries and the Vessels 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, rules and regulations of all
jurisdictions and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any governmental agency that, in each case,
are applicable to the Company, any of the Subsidiaries and any of the Vessels
(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 or non-governmental authority involving the Company, any of
the
Subsidiaries or any of the Vessels with respect to the Money Laundering Laws
is
pending or, to the Company’s knowledge, threatened;
(nn) neither
the Company nor any of the Subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee or affiliate of the Company or any of
the
Subsidiaries is currently subject to any United States sanctions administered
by
the Office of Foreign Assets Control of the United States Treasury Department
(“OFAC”);
(oo) no
Subsidiary is currently prohibited, directly or indirectly, from paying any
dividends to the Company, from making any other distribution on such
Subsidiary’s capital stock, from repaying to the Company any loans or advances
to such Subsidiary from the Company or from transferring any of such
Subsidiary’s property or assets to the Company or any other Subsidiary of the
Company, except as described in the Registration Statement, the Pricing
Prospectus and the Prospectus; all dividends and other distributions declared
and payable on the shares of Common Stock of the Company and on the capital
stock of each Subsidiary may under the current laws and regulations of the
Marshall Islands be paid in United States dollars and freely transferred out
of
the Marshall Islands; and all such dividends and other distributions are not
subject to withholding or other taxes under the current laws and regulations
of
the Marshall Islands and are otherwise free and clear of any withholding or
other tax and may be declared and paid without the necessity of obtaining any
consents, approvals, authorizations, orders licenses, registrations, clearances
and qualifications of or with any court or governmental agency or body or any
stock exchange authorities in the Marshall Islands.
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(pp) except
pursuant to this Agreement, neither the Company nor any of the Subsidiaries
has
incurred any liability for any finder’s or broker’s fee or agent’s commission in
connection with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby or by the Registration Statement, the
Pricing Prospectus and the Prospectus;
(qq) neither
the Company nor any of the Subsidiaries nor, to the Company’s knowledge, any of
their respective directors, officers, affiliates or controlling persons has
taken, directly or indirectly, any action designed, or which has constituted
or
might reasonably be expected to cause or result in, under the Exchange Act
or
otherwise, the stabilization or manipulation of the price of any security of
the
Company to facilitate the sale or resale of the Shares; and
(rr) to
the Company’s knowledge, there are no affiliations or associations between (i)
any member of the NASD and (ii) the Company or any of the Company’s officers,
directors or 5% or greater securityholders or any beneficial owner of the
Company’s unregistered equity securities that were acquired at any time on or
after the 180th day immediately preceding the date the Registration Statement
was initially filed with the Commission, except as set forth in the Registration
Statement, the Pricing Prospectus and the Prospectus.
In
addition, any certificate signed by any officer of the Company and delivered
to
the Underwriters or counsel for the Underwriters in connection with the offering
of the Shares shall be deemed to be a representation and warranty by the
Company, as to matters covered thereby, to the Underwriters.
4. Certain
Covenants of the Company. The Company hereby agrees:
(a) to
furnish such information as may be required and otherwise to cooperate in
qualifying the Shares for offering and sale under the securities or blue sky
laws of such states or other jurisdictions as the Underwriters may reasonably
designate and to maintain such qualifications in effect so long as may be
required for the distribution of the Shares; provided, however,
that the Company shall not be required to qualify as a foreign corporation
or
subject itself to taxation in any such jurisdiction or consent to the service
of
process under the laws of any such jurisdiction (except service of process
with
respect to the offering and sale of the Shares); and to promptly advise the
Underwriters of the receipt by the Company of any notification with respect
to
the suspension of the qualification of the Shares for offer or sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose;
(b) to
make available to the Underwriters in New York City, as soon as practicable
after the date of this Agreement, and thereafter from time to time to furnish
to
the Underwriters, as many copies of the Prospectus (or of the Prospectus as
amended or supplemented if the Company shall have made any amendments or
supplements thereto after the date of this Agreement) as the Underwriters may
request for the purposes contemplated by the Act; in case the Underwriters
are
required to deliver (whether physically or through compliance with Rule 172
under the Act or any similar rule), in connection with the sale of the Shares,
a
prospectus after the nine-month period referred to in Section 10(a)(3) of the
Act, the Company will prepare, at its expense, promptly upon request such
amendment or amendments to the Registration Statement and the Prospectus as
may
be necessary to permit compliance with the requirements of Section 10(a)(3)
of
the Act;
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(c) if,
at the time this Agreement is executed and delivered, it is necessary for any
post-effective amendment to the Registration Statement or a Rule 462(b)
Registration Statement to be filed with the Commissions and become effective
before the Shares may be sold, the Company will use its best efforts to cause
such post-effective amendment or such Rule 462(b) Registration Statement to
be
filed and become effective, and will pay any fees in accordance with the Act
as
soon as possible, and the Company will advise the Underwriters promptly and,
if
requested by the Underwriters, will confirm such advice in writing, (i) when
such post-effective amendment or such Rule 462(b) Registration Statement has
become effective, and (ii) if Rule 430A or Rule 430C under the Act is used,
when
the Prospectus is filed with the Commission pursuant to Rule 424(b) under the
Act (which the Company agrees to file in a timely manner in accordance with
such
Rules);
(d) to
advise the Underwriters promptly, and, if requested by the Underwriters, to
confirm such advice in writing, of any request by the Commission for amendments
or supplements to the Registration Statement, any Preliminary Prospectus, the
Prospectus or any Issuer Free Writing Prospectus or for additional information
with respect thereto, or of notice of institution of proceedings for, or the
entry of a stop order, suspending the effectiveness of the Registration
Statement or preventing or suspending the use of any Preliminary Prospectus,
the
Prospectus or any Issuer Free Writing Prospectus and, if the Commission should
enter a stop order suspending the effectiveness of the Registration Statement
or
preventing or suspending the use of any Preliminary Prospectus, the Prospectus
or any Issuer Free Writing Prospectus, to use its best efforts to obtain the
lifting or removal of such order as soon as possible; to advise the Underwriters
promptly of any proposal to amend or supplement the Registration Statement,
any
Preliminary Prospectus, the Prospectus or any Issuer Free Writing Prospectus
and
to provide the Underwriters and their counsel copies of any such documents
for
review and comment a reasonable amount of time prior to any proposed filing
and
to file no such amendment or supplement to which the Underwriters shall
reasonably object in writing;
(e) subject
to Section 4(d) hereof, to file promptly all reports and documents and any
information statement required to be filed by the Company with the Commission
in
order to comply with the Exchange Act for so long as the delivery of a
prospectus is required by the Act (whether physically or through compliance
with
Rule 172 under the Act or any similar rule) in connection with any sale of
Shares; and, during such period, to provide the Underwriters, for their review
and comment, with a copy of such reports and statements and other documents
to
be filed by the Company pursuant to Section 13, 14 or 15(d) of the Exchange
Act
during such period a reasonable amount of time prior to any proposed filing,
and
to file no such report, statement or document to which the Underwriters shall
reasonably object in writing; and to promptly notify the Underwriters of such
filing;
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(f) to
advise the Underwriters promptly of the happening of any event known to the
Company within the period during which a prospectus is required by the Act
to be
delivered (whether physically or through compliance with Rule 172 under the
Act
or any similar rule) in connection with any sale of Shares, which event could
require the making of any change in the Prospectus then being used so that
the
Prospectus would not include an 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 are made, not misleading, and,
during such time, subject to Section 4(d) hereof, to prepare and furnish, at
the
Company’s expense, to the Underwriters promptly such amendments or supplements
to such Prospectus as may be necessary to reflect any such change;
(g) to
furnish to its stockholders as soon as practicable after the end of each fiscal
year an annual report (including a consolidated balance sheet and statements
of
income, stockholders’ equity and cash flow of the Company and the Subsidiaries
for such fiscal year, accompanied by a copy of the certificate or report thereon
of nationally recognized independent certified public accountants duly
registered with the Public Company Oversight Accounting Board);
(h) to
furnish to the Underwriters one copy of the Registration Statement, as initially
filed with the Commission, and of all amendments thereto, including, if
requested, all exhibits thereto;
(i) to
furnish to the Underwriters promptly for a period of three years from the date
of this Agreement (i) copies of any reports, proxy statements, or other
communications which the Company shall send to its stockholders, (ii) copies
of
all annual, quarterly and current reports filed with or furnished to the
Commission on Forms 20-F or 6-K, or such other similar forms as may be
designated by the Commission and (iii) copies of documents or reports filed
with
any national securities exchange on which any class of securities of the Company
is listed; provided, however, that any information or documents
filed with or furnished to the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System shall be considered furnished for
the
purposes of this Section 4(i);
(j) for
a period of 90 days after the date hereof (the “Lock-Up Period”), without
the prior written consent of the Representative, not to (i) sell, offer to
sell,
contract or agree to sell, hypothecate, pledge, grant any option to purchase
or
otherwise dispose of or agree to dispose of, directly or indirectly, 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 Stock or securities convertible into or exchangeable or exercisable
for Common Stock or warrants or other rights to purchase Common Stock or any
other securities of the Company that are substantially similar to Common Stock,
(ii) file or cause to be declared effective a registration statement under
the
Act relating to the offer and sale of any shares of Common Stock or securities
convertible into or exercisable or exchangeable for Common Stock or warrants
or
other rights to purchase Common Stock or any other securities of the Company
that are substantially similar to Common Stock, (iii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, or warrants or other
rights to purchase Common Stock or any such securities, whether any such
transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise or (iv) publicly announce an intention to
effect any transaction specified in clause (i), (ii) or (iii), except, in each
case, for (A) the registration of the Shares and the sales to the Underwriters
pursuant to this Agreement, (B) issuances of Common Stock upon the exercise
of
options or warrants disclosed as outstanding in the Registration Statement,
the
Pricing Prospectus and the Prospectus, and (C) the issuance of employee stock
options not exercisable during the Lock-Up Period pursuant to stock option
plans
described in the Registration Statement, the Pricing Prospectus and the
Prospectus; provided, however, that if (a) during the period that
begins on the date that is fifteen (15) calendar days plus three (3) business
days before the last day of the Lock-Up Period and ends on the last day of
the
Lock-Up Period, the Company issues an earnings release or material news or
a
material event relating to the Company occurs; or (b) prior to the expiration
of
the Lock-Up Period, the Company announces that it will release earnings results
during the sixteen (16) day period beginning on the last day of the Lock-Up
Period, then the restrictions imposed by this Section 4(j) shall continue to
apply until the expiration of the date that is fifteen (15) calendar days plus
three (3) business days after the date on which the issuance of the earnings
release or the material news or material event occurs;
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(k) prior
to the time of purchase, to issue no press release or other communication
directly or indirectly and hold no press conferences with respect to the Company
or any Subsidiary, the financial condition, results of operations, business,
properties, assets, or liabilities of the Company or any Subsidiary or the
offering of the Shares, without the Underwriters’ prior consent;
(l) not,
at any time at or after the execution of this Agreement, to directly or
indirectly, offer or sell any Shares by means of any “prospectus” (within the
meaning of the Act) or use any “prospectus” (within the meaning of the Act) in
connection with the offer or sale of the Shares, other than the Registration
Statement and the then most recent Prospectus;
(m) not
to, and to cause its Subsidiaries not to, take, directly or indirectly, any
action designed, or which has constituted or might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, the stabilization
or
manipulation of the price of any security of the Company to facilitate the
sale
or resale of the Shares;
(n) to
use its reasonable best efforts either (i) to maintain the listing of the Shares
on the NYSE, (ii) to list, and to maintain the listing of, the Shares on any
other national securities exchange registered pursuant to Section 6(a) of the
Exchange Act or (iii) to arrange for the quotation, and to maintain the
quotation of, the Shares in an automated interdealer quotation system of a
national securities association registered pursuant to Section 15A(a) of the
Exchange Act; and
(o) to
maintain a transfer agent and, if necessary under the jurisdiction of
incorporation of the Company, a registrar for the Common Stock.
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5. Covenant
to Pay Costs. The Company agrees to pay all costs, expenses, fees
and taxes in connection with (i) the preparation and filing of the Registration
Statement, any Preliminary Prospectus, the Prospectus, any Issuer Free Writing
Prospectus and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (ii) the registration, issue, sale
and delivery of the Shares including any stock or transfer taxes and stamp
or
similar duties payable upon the sale, issuance or delivery of the Shares to
the
Underwriters, (iii) the qualification of the Shares for offering and sale
under state or foreign laws and the determination of their eligibility for
investment under state or foreign law (including the legal fees and filing
fees
and other disbursements of counsel for the Underwriters incurred in connection
with such qualifications and determinations) and the printing and furnishing
of
copies of any blue sky surveys or legal investment surveys to the Underwriters
and to dealers, (iv) any listing of the Shares on any securities exchange or
qualification of the Shares for quotation on the NYSE and any registration
thereof under the Exchange Act, (v) any filing for review of the public offering
of the Shares by the NASD, including the legal fees and filing fees and other
disbursements of counsel to the Underwriters relating to NASD matters,
(vi) the fees and disbursements of any transfer agent or registrar for the
Shares, (vii) unless otherwise agreed in writing, the costs and expenses of
the Company relating to presentations or meetings undertaken in connection
with
the marketing of the offering and sale of the Shares to prospective investors
and the Underwriters’ sales forces, including, without limitation, expenses
associated with the production of road show slides and graphics, fees and
expenses of any consultants engaged in connection with the road show
presentations, travel, lodging and other expenses incurred by the officers
of
the Company and any such consultants, and the cost of any aircraft chartered
in
connection with any road show and (ix) the performance of the Company’s
other obligations hereunder.
6. Reimbursement
of Underwriters’ Expenses. If the Shares are not delivered for
any reason, the Company agrees that it shall, in addition to paying the amounts
described in Section 5 hereof, reimburse the Underwriters for all of their
properly documented out-of-pocket expenses, including the reasonable fees and
disbursements of their counsel.
7. Conditions
of Underwriters’ Obligations. The obligations of the Underwriters
hereunder are subject to the accuracy of the representations and warranties
on
the part of the Company on the date hereof and at the time of purchase, the
performance by the Company of each of their respective obligations hereunder
and
to the following additional conditions precedent:
(a) The
Company shall furnish to the Underwriters at the time of purchase an opinion
of
Cravath, Swaine & Moore LLP, special United States counsel for the Company,
addressed to the Underwriters and dated the time of purchase substantially
in
the form set forth in Exhibit B hereto.
(b) The
Company shall furnish to the Underwriters at the time of purchase a negative
assurance letter of Cravath, Swaine & Moore LLP, special United States
counsel for the Company, addressed to the Underwriters and dated the time of
purchase substantially in the form set forth in Exhibit C
hereto.
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(c) The
Company shall furnish to the Underwriters at the time of purchase an opinion
of
Cravath, Swaine & Moore LLP, special United States counsel for the Company,
as to certain tax matters, addressed to the Underwriters and dated the time
of
purchase substantially in the form set forth in Exhibit D
hereto.
(d) The
Company shall furnish to the Underwriters at the time of purchase an opinion
of
Reeder & Simpson, PC, Marshall Islands counsel for the Company, addressed to
the Underwriters and dated the time of purchase substantially in the form set
forth in Exhibit E hereto.
(e) The
Underwriters shall have received from Ernst & Young LLP letters dated,
respectively, the date of this Agreement, the time of purchase and addressed
to
the Underwriters, in the forms heretofore approved by the
Representative.
(f) The
Underwriters shall have received at the time of purchase the favorable opinion
and negative assurance letter of Simpson Thacher & Bartlett LLP, counsel for
the Underwriters, dated the time of purchase in form and substance satisfactory
to the Representative.
(g) No
Prospectus or amendment or supplement to the Registration Statement or the
Prospectus shall have been filed to which the Underwriters reasonably objects
in
writing.
(h) The
Prospectus shall have been filed with the Commission pursuant to Rule 424(b)
under the Act at or before 5:30 P.M., New York City time, on the second full
business day after the date of this Agreement and any Rule 462(b) Registration
Statement required by the Act in connection with the offer and sale of the
Shares shall have been filed and become effective no later than 10:00 P.M.,
New
York City time, on the date of this Agreement.
(i) Prior
to and at the time of purchase, (i) no stop order of the Commission preventing
or suspending the use of any Preliminary Prospectus or Issuer Free Writing
Prospectus, or the effectiveness of the Registration Statement, shall have
been
issued, and no proceedings for such purpose shall have been instituted; (ii)
the
Registration Statement and all amendments thereto shall not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
(iii)
the Pricing Prospectus and all supplements and amendments thereto, when read
together with the then issued Issuer Free Writing Prospectuses, if any, and
the
information included on Schedule C hereto, shall not include an 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; (iii) the Prospectus and all supplements and
amendments thereto shall not include an 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 (iv) the Issuer Free Writing Prospectuses, if any, when read together with
the Pricing Prospectus and the information included on Schedule C hereto,
shall not include an 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.
-
19
-
(j) Between
the time of execution of this Agreement and the time of purchase, (i) there
shall not have occurred or become known any material adverse change, or any
development involving a prospective material adverse change, in the business,
properties, financial condition, results of operations or prospects of the
Company and the Subsidiaries taken as a whole and (ii) no transaction which
is
material and adverse to the Company and the Subsidiaries taken as a whole shall
have been entered into by the Company or any of the Subsidiaries.
(k) The
Company will, at the time of purchase, deliver to the Underwriters a certificate
of its Chief Executive Officer and its Chief Financial Officer, dated the time
of purchase in the form attached as Exhibit F hereto.
(l) The
Representative shall have received each of the signed Lock-Up Agreements
referred to in Section 3(u) hereof, and each such Lock-Up Agreement shall be
in
full force and effect at the time of purchase.
(m) The
Company shall have furnished to the Underwriters such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement, the Pricing Prospectus, the Prospectus and any Issuer
Free Writing Prospectus as of the time of purchase as the Underwriters may
reasonably request.
(n) The
Shares shall be listed and admitted and authorized for trading on the
NYSE.
(o) The
NASD shall not have raised any objection with respect to the fairness or
reasonableness of the underwriting, or other arrangements of the transactions,
contemplated hereby.
(p) Each
Vessel shall be owned directly by a Subsidiary free and clear of all liens,
claims, security interests or other encumbrances, except such as are described
in the Registration Statement, the Pricing Prospectus and the Prospectus and
such as are not material and do not interfere with the intended use to be made
of such Vessel as described in the Registration Statement, the Pricing
Prospectus and the Prospectus.
- 20
-
8. Effective
Date of Agreement; Termination. This Agreement shall become
effective when the parties hereto have executed and delivered this Agreement.
The obligations of the Underwriters hereunder shall be subject to termination
in
the absolute discretion of the Representative if (x) since the time of execution
of this Agreement or the earlier respective dates as of which information is
given in the Registration Statement, the Pricing Prospectus, the Prospectus
and
any Permitted Free Writing Prospectus, there has been any material adverse
change or any development involving a prospective material adverse change in
the
business, properties, management, financial condition or results of operations
of the Company and the Subsidiaries taken as a whole which would, in the
judgment of the Representative, make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the terms and in
the
manner contemplated in the Registration Statement, the Pricing Prospectus,
the
Prospectus and the Permitted Free Writing Prospectuses, if any, (in each case
excluding any amendments or supplements thereto made after the execution of
this
Agreement) or (y) since the time of execution of this Agreement, there shall
have occurred: (i) a suspension or material limitation in trading in securities
generally on the NYSE or the NASDAQ; (ii) a suspension or material limitation
in
trading in the Company’s securities on the NYSE; (iii) a general moratorium on
commercial banking activities declared by either federal or New York State
authorities or a material disruption in commercial banking or securities
settlement or clearance services in the United States; (iv) an outbreak or
escalation of hostilities or acts of terrorism involving the United States
or a
declaration by the United States of a national emergency or war (it being
understood that, with respect to matters relating to the current conflicts
in
Afghanistan and Iraq occurring within Afghanistan and Iraq, respectively, this
clause (iv) shall apply only to an escalation of hostilities or a declaration
by
the United States of a national emergency or a war which has not heretofore
been
declared); or (v) any other calamity or crisis or any change in financial,
political or economic conditions in the United States or elsewhere, if the
effect of any such event specified in clause (iv) or (v) in the judgment of
the
Representative makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Shares on the terms and in the manner
contemplated in the Registration Statement, the Pricing Prospectus, the
Prospectus and the Permitted Free Writing Prospectuses, if any, (in each case
excluding any amendments or supplements thereto made after the execution of
this
Agreement) or (z) since the time of execution of this Agreement, there shall
have occurred any downgrading, or any notice or announcement shall have been
given or made of (i) any intended or potential downgrading or (ii) any watch,
review or possible change that does not indicate an affirmation or improvement
in the rating accorded any securities of or guaranteed by the Company or any
Subsidiary by any “nationally recognized statistical rating organization,” as
that term is defined in Rule 436(g)(2) under the Act.
If
the Representative elects to
terminate this Agreement as provided in this Section 8, the Company shall be
notified promptly in writing. If the sale to the Underwriters of the Shares,
as
contemplated by this Agreement, is not carried out by the Underwriters for
any
reason permitted under this Agreement, or if such sale is not carried out
because the Company, shall be unable to comply with any of the terms of this
Agreement, the Company shall not be under any obligation or liability under
this
Agreement (except to the extent provided in Sections 5, 6 and 9 hereof), and
the
Underwriters shall be under no obligation or liability to the Company under
this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
9. Increase
in Underwriters’ Commitments. Subject to Sections 7 and 8 hereof,
if any Underwriter (the “Defaulting Underwriter”) shall default in its
obligation to take up and pay for the Shares to be purchased by it hereunder
and
if the aggregate number of Shares which the Defaulting Underwriter shall have
agreed but failed to take up and pay for does not exceed 10% of the total number
of Shares, the non-defaulting Underwriter (the “Non-Defaulting
Underwriter”) shall take up and pay for (in addition to the aggregate number
of Shares such Non-Defaulting Underwriter is obligated to purchase pursuant
to
Section 1 hereof) the number of Shares agreed but failed to be taken up and
paid
for by the Defaulting Underwriter, as hereinafter provided. Such
Shares shall be taken up and paid for by such Non-Defaulting Underwriter in
such
amount or amounts as the Non-Defaulting Underwriter may designate.
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-
Without
relieving the Defaulting
Underwriter from its obligations hereunder, the Company agrees with the
Non-Defaulting Underwriter that it will not sell any Shares hereunder unless
all
of the Shares are purchased by the Non-Defaulting Underwriter (or by substituted
Underwriters selected by the Non-Defaulting Underwriter with the approval of
the
Company or selected by the Company with the approval of the Non-Defaulting
Underwriter).
If
a new Underwriter or Underwriters
are substituted by the Non-Defaulting Underwriter for the Defaulting Underwriter
in accordance with the foregoing provision, the Non-Defaulting Underwriter
or
the Company shall have the right to postpone the time of purchase for a period
not exceeding five business days in order that any necessary changes in the
Registration Statement and the Prospectus and other documents may be
effected.
The
term “Underwriter” as used in this
Agreement shall refer to and include any underwriter substituted under this
Section 9 with like effect as if such substituted underwriter had originally
been named as an Underwriter in Schedule A hereto.
If
the aggregate number of Shares which
the Defaulting Underwriter agreed to purchase but failed to take up and pay
for
exceeds 10% of the total number of Shares which the Underwriters agreed to
purchase hereunder, and if neither the Non-Defaulting Underwriter nor the
Company shall make arrangements within the five business day period stated
above
for the purchase of all the Shares which the Defaulting Underwriter agreed
to
purchase hereunder but failed to take up and pay for, this Agreement shall
terminate without further act or deed and without any liability on the part
of
the Company to the Non-Defaulting Underwriter and without any liability on
the
part of any Non-Defaulting Underwriter to the Company. Nothing in
this paragraph, and no action taken hereunder, shall in any way relieve the
Defaulting Underwriter from any liability in respect of any default of such
Defaulting Underwriter under this Agreement.
10. Indemnity
and Contribution.
(a) The
Company agrees to indemnify, defend and hold harmless each Underwriter, its
partners, directors and officers, and any person who controls such Underwriter
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act,
and the successors and assigns of all of the foregoing persons, from and against
any loss, damage, expense, liability or claim (including the reasonable cost
of
investigation) which, jointly or severally, the Underwriters or any such person
may incur under the Act, the Exchange Act, the common law or otherwise, insofar
as such loss, damage, expense, liability or claim arises out of or is based
upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or in the Registration Statement as
amended by any post-effective amendment thereof by the Company) or arises out
of
or is based upon any omission or alleged omission to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as any such loss, damage, expense, liability or
claim
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in, and in conformity with information concerning
the Underwriters furnished in writing by or on behalf of the Underwriters to
the
Company expressly for use in, the Registration Statement or arises out of or
is
based upon any omission or alleged omission to state a material fact in the
Registration Statement in connection with such information, which material
fact
was not contained in such information and which material fact was required
to be
stated in such Registration Statement or was necessary to make such information
not misleading or (ii) any untrue statement or alleged untrue statement of
a
material fact included in any Prospectus (the term Prospectus for the purpose
of
this Section 10 being deemed to include any Preliminary Prospectus, the
Prospectus and any amendments or supplements to the foregoing), in any Issuer
Free Writing Prospectus, in any “issuer information” (as defined in Rule 433
under the Act) of the Company, which “issuer information” is required to be, or
is, filed with the Commission, or in any Prospectus together with any
combination of one or more Issuer Free Writing Prospectuses, if any, or arises
out of or is based upon any omission or alleged omission 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, except, with respect
to such Prospectus or Issuer Free Writing Prospectus, insofar as any such loss,
damage, expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in, and
in
conformity with information concerning such Underwriter furnished in writing
by
or on behalf of such Underwriter to the Company expressly for use in, such
Prospectus or Issuer Free Writing Prospectus or arises out of or is based upon
any omission or alleged omission to state a material fact in such Prospectus
or
Issuer Free Writing Prospectus in connection with such information, which
material fact was not contained in such information and which material fact
was
necessary in order to make the statements in such information, in the light
of
the circumstances under which they were made, not misleading.
- 22
-
(b) Each
Underwriter agrees to indemnify, defend and hold harmless the Company, its
directors and officers and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, and the
successors and assigns of all of the foregoing persons, from and against any
loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company or any such person
may
incur under the Act, the Exchange Act, the common law or otherwise, insofar
as
such loss, damage, expense, liability or claim arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in, and in conformity with information concerning such Underwriter
furnished in writing by or on behalf of such Underwriter to the Company
expressly for use in, the Registration Statement (or in the Registration
Statement as amended by any post-effective amendment thereof by the Company),
or
arises out of or is based upon any omission or alleged omission to state a
material fact in such Registration Statement in connection with such
information, which material fact was not contained in such information and
which
material fact was required to be stated in such Registration Statement or was
necessary to make such information not misleading or (ii) any untrue statement
or alleged untrue statement of a material fact contained in, and in conformity
with information concerning such Underwriter furnished in writing by or on
behalf of such Underwriter to the Company expressly for use in, a Prospectus
or
any Issuer Free Writing Prospectus, or arises out of or is based upon any
omission or alleged omission to state a material fact in such Prospectus or
Issuer Free Writing Prospectus in connection with such information, which
material fact was not contained in such information and which material fact
was
necessary in order to make the statements in such information, in the light
of
the circumstances under which they were made, not misleading.
- 23
-
(c) If
any action, suit or proceeding (each, a “Proceeding”) is brought against
a person (an “indemnified party”) in respect of which indemnity may be
sought against the Company or the Underwriters (as applicable, the
“indemnifying party”) pursuant to subsection (a) or (b) of this Section
10, such indemnified party shall promptly notify such indemnifying party in
writing of the institution of such Proceeding and such indemnifying party shall
assume the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify such
indemnifying party shall not relieve such indemnifying party from any liability
which such indemnifying party may have to any indemnified party or
otherwise. The indemnified party or parties shall have the right to
employ its or their own counsel in any such case, but the fees and expenses
of
such counsel shall be at the expense of such indemnified party or parties unless
the employment of such counsel shall have been authorized in writing by the
indemnifying party in connection with the defense of such Proceeding or the
indemnifying party shall not have, within a reasonable period of time in light
of the circumstances, employed counsel to defend such Proceeding or such
indemnified party or parties shall have reasonably concluded, based on the
advice of counsel, that there may be defenses available to it or them which
are
different from, additional to or in conflict with those available to such
indemnifying party (in which case such indemnifying party shall not have the
right to direct the defense of such Proceeding on behalf of the indemnified
party or parties), in any of which events such fees and expenses shall be borne
by such indemnifying party and paid as incurred (it being understood, however,
that such indemnifying party shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one Proceeding
or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). The
indemnifying party shall not be liable for any settlement of any Proceeding
effected without its written consent but, if settled with its written consent,
such indemnifying party agrees to indemnify and hold harmless the indemnified
party or parties from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this Section 10(c), then the indemnifying party agrees that it
shall
be liable for any settlement of any Proceeding effected without its written
consent if (i) such settlement is entered into more than 60 business days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall not have fully reimbursed the indemnified party in
accordance with such request prior to the date of such settlement and (iii)
such
indemnified party shall have given the indemnifying party at least 30 days’
prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes
an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault or culpability or a failure to act by or on behalf of such indemnified
party.
- 24
-
(d) If
the indemnification provided for in this Section 10 is unavailable to an
indemnified party under subsections (a) or (b) of this Section 10 or
insufficient to hold an indemnified party harmless in respect of any losses,
damages, expenses, liabilities or claims referred to therein, then each
applicable indemnifying party shall contribute to the amount paid or payable
by
such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Underwriters on the other in connection with the statements
or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportions as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company, and the total underwriting
discounts and commissions received by the Underwriters, bear to the aggregate
public offering price of the Shares. The relative fault of the
Company on the one hand and of the Underwriters on the other shall be determined
by reference to, among other things, whether the untrue statement or alleged
untrue statement of a material fact or omission or alleged omission relates
to
information supplied by the Company or by the Underwriters and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, damages, expenses, liabilities and claims
referred to in this subsection shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating, preparing to defend or defending any Proceeding.
(e) The
Company and the Underwriters agree that it would not be just and equitable
if
contribution pursuant to this Section 10 were determined by pro rata allocation
or by any other method of allocation that does not take account of the equitable
considerations referred to in subsection (d) above. Notwithstanding
the provisions of this Section 10, (i) the Underwriters shall not be required
to
contribute any amount in excess of the amount by which the total price at which
the Shares underwritten by the Underwriters and distributed to the public were
offered to the public exceeds the amount of any damage which the Underwriters
have otherwise been required to pay by reason of such untrue statement or
alleged untrue statement or omission or alleged omission and (ii) the Company
shall not be required to contribute any amount in excess of the product of
(x)
the aggregate number of Shares sold by the Company hereunder and (y) the
purchase price per Share set forth in Section 1 hereof. 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.
(f) The
indemnity and contribution agreements contained in this Section 10 and the
covenants, warranties and representations of the Company contained in this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of the Underwriters, their partners, directors or officers
or any person (including each partner, officer or director of such person)
who
controls the Underwriters within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, or by or on behalf of the Company, their respective
directors or officers or any person who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and shall survive
any termination of this Agreement or the issuance and delivery of the Shares
pursuant hereto. The Company and the Underwriters agree promptly to notify
each
other of the commencement of any Proceeding against it and, in the case of
the
Company, against any of their officers or directors in connection with the
issuance and sale of the Shares, or in connection with the Registration
Statement, any Preliminary Prospectus, the Prospectus or any Issuer Free Writing
Prospectus.
- 25
-
11. Information
Furnished by the Underwriters. The statements set forth in the
Prospectus under “Underwriting” in the [●] paragraphs constitute the only
information furnished by or on behalf of the Underwriters as such information
is
referred to in Section 3 and Section 10 hereof.
12. Notices. Except
as otherwise herein provided, all statements, requests, notices and agreements
shall be in writing or by telegram or facsimile and, if to the Underwriters,
shall be sufficient in all respects if delivered or sent to _______________
and,
if to the Company, shall be sufficient in all respects if delivered or sent
to
the Company at the offices of the Company at 26 New Street, St. Helier, Jersey
JE23RA, Attention: Chief Executive Officer.
13. Governing
Law; Construction. This Agreement and any claim, counterclaim or
dispute of any kind or nature whatsoever arising out of or in any way relating
to this Agreement (“Claim”), directly or indirectly, shall be governed
by, and construed in accordance with, the laws of the State of New
York. The section headings in this Agreement have been inserted as a
matter of convenience of reference and are not a part of this
Agreement.
14. Submission
to Jurisdiction. Except as set forth below, no Claim may be
commenced, prosecuted or continued in any court other than the courts of the
State of New York located in the City and County of New York or in the United
States District Court for the Southern District of New York, which courts shall
have jurisdiction over the adjudication of such matters, and the Company
consents to the jurisdiction of such courts and personal service with respect
thereto. The Company consents to personal jurisdiction, service and
venue in any court in which any Claim arising out of or in any way relating
to
this Agreement is brought by any third party against any Underwriter or any
indemnified party. The Underwriters and the Company (on its behalf
and, to the extent permitted by applicable law, on behalf of its stockholders
and affiliates) each waive all right to trial by jury in any action, proceeding
or counterclaim (whether based upon contract, tort or otherwise) in any way
arising out of or relating to this Agreement. The Company agrees that
a final judgment in any such action, proceeding or counterclaim brought in
any
such court shall be conclusive and binding upon the Company and may be enforced
in any other courts to the jurisdiction of which the Company is or may be
subject, by suit upon such judgment. The Company hereby appoints,
without power of revocation, CT Corporation as its agent to accept and
acknowledge on its behalf of any and all process which may be served in any
action, proceeding or counterclaim in any way relating to or arising out of
this
Agreement.
15. Parties
at Interest. The Agreement herein set forth has been and is made
solely for the benefit of the Underwriters and the Company and to the extent
provided in Section 10 hereof the controlling persons, partners, directors
and
officers referred to in such Section, and their respective successors, assigns,
heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser,
as
such purchaser, from the Underwriters) shall acquire or have any right under
or
by virtue of this Agreement.
- 26
-
16. Counterparts. This
Agreement may be signed by the parties in one or more counterparts which
together shall constitute one and the same agreement among the
parties.
17. Successors
and Assigns. This Agreement shall be binding upon the
Underwriters and the Company and their successors and assigns and any successor
or assign of any substantial portion of the Company’s or any of the
Underwriters’ respective businesses and/or assets.
18. No
Fiduciary Relationship. The Company hereby acknowledges that the
Underwriters are acting solely as the underwriters in connection with the
purchase and sale of the Company’s securities. The Company further acknowledges
that the Underwriters are acting pursuant to a contractual relationship created
solely by this Agreement entered into on an arm’s length basis and in no event
do the parties intend that the Underwriters act or be responsible as a fiduciary
to the Company, its management, stockholders or creditors or any other person
in
connection with any activity that the Underwriters may undertake or have
undertaken in furtherance of the purchase and sale of the Company’s securities
either before or after the date hereof. The Underwriters hereby expressly
disclaim any fiduciary or similar obligations to the Company, either in
connection with the transactions contemplated by this Agreement or any matters
leading up to such transactions, and the Company hereby confirms its
understanding and agreement to that effect. The Company and the Underwriters
agree that they are each responsible for making their own independent judgments
with respect to any such transactions, and that any opinions or views expressed
by the Underwriters to the Company regarding such transactions, including but
not limited to any opinions or views with respect to the price or market for
the
Company’s securities, do not constitute advice or recommendations to the
Company. The Company hereby waives and releases, to the fullest extent permitted
by law, any claims that the Company may have against the Underwriters with
respect to any breach or alleged breach of any fiduciary or similar duty to
the
Company in connection with the transactions contemplated by this Agreement
or
any matters leading up to such transactions.
[The
Remainder of This Page Intentionally Left Blank; Signature Pages
Follow]
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-
If
the foregoing correctly sets forth
the understanding among the Company and the Underwriters, please so indicate
in
the space provided below for that purpose, whereupon this Agreement and the
Underwriter’s acceptance shall constitute a binding agreement among the Company
and the Underwriters.
| Very truly yours, | |||
| DOUBLE HULL TANKERS, INC. | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
Accepted
and agreed as of the date
first
written above, on behalf of
themselves
and the other
Underwriters
named in Schedule A:
By: ___________________________
By: ___________________________
Name:
Title:
SCHEDULE
A
LIST
OF
UNDERWRITERS
|
Name
of Underwriter
|
Number
of shares of
common
stock
|
|
|
_______________.............................................................................................................................................................................................
|
||
|
_______________.............................................................................................................................................................................................
|
__________
|
|
|
Total.....................................................................................................................................................................................................
|
__________
|
SCHEDULE
B
PERMITTED
FREE WRITING PROSPECTUSES
[●]
SCHEDULE
C
CERTAIN
INFORMATION
[●]
SCHEDULE
D
SUBSIDIARIES
AND VESSELS
|
Subsidiary
|
Vessel
Owned |
|
[●]
|
[●]
|
SCHEDULE
E
PERSONS
REQUIRED TO DELIVER LOCK-UP AGREEMENTS
|
1.
|
Erik
A. Lind
|
|
2.
|
Randee
Day
|
|
3.
|
Rolf
A. Wikborg
|
|
4.
|
Ole
Jacob Diesen
|
|
5.
|
Eirik
Ubøe
|
|
6.
|
Tom
Kjeldsberg
|
EXHIBIT
A
LOCK-UP
AGREEMENT
__________,
2007
_______________
Ladies
and Gentlemen:
This
Lock-Up Agreement is being
delivered to you in connection with the proposed Underwriting Agreement (the
“Underwriting Agreement”) to be entered into among Double Hull Tankers,
Inc. a Marshall Islands corporation (the “Company”), and you, as
representative of the underwriters named in Schedule A to the Underwriting
Agreement, with respect to the public offering (the “Offering”) of common
stock, par value $0.01 per share, of the Company (the “Common
Stock”).
In
order to induce you to enter into
the Underwriting Agreement, the undersigned agrees that, for a period (the
“Lock-Up Period”) beginning on the date hereof and ending on, and
including, the date that is 90 days after the date of the final prospectus
relating to the Offering, the undersigned will not, without the prior written
consent of _______________, (i) sell, offer to sell, contract or agree to sell,
hypothecate, pledge, grant any option to purchase or otherwise dispose of or
agree to dispose of, directly or indirectly, or file (or participate in the
filing of) a registration statement with the Securities and Exchange Commission
(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 Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder (the
“Exchange Act”) with respect to, any Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or warrants
or
other rights to purchase Common Stock or any such securities, (ii) enter into
any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock, or warrants
or
other rights to purchase Common Stock or any such securities, whether any such
transaction is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise or (iii) publicly announce an intention to
effect any transaction specified in clause (i) or (ii). The foregoing sentence
shall not apply to (a) the registration of or sale to the Underwriters (as
defined in the Underwriting Agreement) of any Common Stock pursuant to the
Offering and the Underwriting Agreement, (b) bona fide gifts, provided the
recipient thereof agrees in writing with the Underwriters to be bound by the
terms of this Lock-Up Agreement or (c) dispositions to any trust for the direct
or indirect benefit of the undersigned and/or the immediate family of the
undersigned, provided that such trust agrees in writing with the Underwriters
to
be bound by the terms of this Lock-Up Agreement. For purposes of this
paragraph, “immediate family” shall mean the undersigned and the spouse, any
lineal descendent, father, mother, brother or sister of the
undersigned.
In
addition, the undersigned hereby
waives any rights the undersigned may have to require registration of Common
Stock in connection with the filing of a registration statement relating to
the
Offering. The undersigned further agrees that, for the Lock-Up
Period, the undersigned will not, without the prior written consent of
_______________, make any demand for, or exercise any right with respect to,
the
registration of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock, or warrants or other rights to purchase Common
Stock or any such securities.
Notwithstanding
the above, if (a)
during the period that begins on the date that is fifteen (15) calendar days
plus three (3) business days before the last day of the Lock-Up Period and
ends
on the last day of the Lock-Up Period, the Company issues an earnings release
or
material news or a material event relating to the Company occurs; or (b) prior
to the expiration of the Lock-Up Period, the Company announces that it will
release earnings results during the sixteen (16) day period beginning on the
last day of the Lock-Up Period, then the restrictions imposed by this Lock-Up
Agreement shall continue to apply until the expiration of the date that is
fifteen (15) calendar days plus three (3) business days after the date on which
the issuance of the earnings release or the material news or material event
occurs.
In
addition, the undersigned hereby
waives any and all preemptive rights, participation rights, resale rights,
rights of first refusal and similar rights that the undersigned may have in
connection with the Offering or with any issuance or sale by the Company of
any
equity or other securities before the Offering, except for any such rights
as
have been heretofore duly exercised.
The
undersigned hereby confirms that
the undersigned has not, directly or indirectly, taken, and hereby covenants
that the undersigned will not, directly or indirectly, take, any action
designed, or which has constituted or will constitute or might reasonably be
expected to cause or result in, under the Exchange Act or otherwise, the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of shares of Common Stock.
* * *
If
for any reason the Underwriting
Agreement shall be terminated prior to the “time of purchase” (as defined in the
Underwriting Agreement), this Lock-Up Agreement shall be terminated and the
undersigned shall be released from its obligations hereunder.
| Yours very truly, | |||
|
|
|
||
| Name: | |||
EXHIBIT
B
OPINION
OF CRAVATH, SWAINE & MOORE LLP
SPECIAL
UNITED STATES COUNSEL TO THE COMPANY
EXHIBIT
C
NEGATIVE
ASSURANCE LETTER OF CRAVATH, SWAINE & MOORE LLP
SPECIAL
UNITED STATES COUNSEL TO THE COMPANY
EXHIBIT
D
TAX
OPINION OF CRAVATH, SWAINE & MOORE LLP
SPECIAL
UNITED STATES COUNSEL TO THE COMPANY
EXHIBIT
E
OPINION
OF REEDER & SIMPSON PC
MARSHALL
ISLANDS COUNSEL TO THE COMPANY
EXHIBIT
F
OFFICERS’
CERTIFICATE
Exhibit
4.1
DOUBLE
HULL TANKERS, INC.
___________________________
FORM
OF INDENTURE
Dated
as of
[ ]
___________________________
[ ]
Trustee
Page
i
ii
iii
iv
CROSS-REFERENCE
TABLE*
|
Trust
Indenture Act Section
|
Indenture
Section
|
|
|
310
|
(a)(1)
|
7.10
|
|
(a)(2)
|
7.10
|
|
|
(a)(3)
|
Not
Applicable
|
|
|
(a)(4)
|
Not
Applicable
|
|
|
(a)(5)
|
7.10
|
|
|
(b)
|
7.10
|
|
|
(c)
|
Not
Applicable
|
|
|
311
|
(a)
|
7.11
|
|
(b)
|
7.11
|
|
|
(c)
|
Not
Applicable
|
|
|
312
|
(a)
|
2.06
|
|
(b)
|
10.03
|
|
|
(c)
|
10.03
|
|
|
313
|
(a)
|
7.06
|
|
(b)(1)
|
Not
Applicable
|
|
|
(b)(2)
|
7.06
|
|
|
(c)
|
7.06
|
|
|
(d)
|
7.06
|
|
|
314
|
(a)
|
4.02;4.03
|
|
(b)
|
Not
Applicable
|
|
|
(c)(1)
|
10.04
|
|
|
(c)(2)
|
10.04
|
|
|
(c)(3)
|
Not
Applicable
|
|
|
(d)
|
Not
Applicable
|
|
|
(e)
|
10.05
|
|
|
(f)
|
Not
Applicable
|
|
|
315
|
(a)
|
7.01
|
|
(b)
|
7.05
|
|
|
(c)
|
7.01
|
|
|
(d)
|
7.01
|
|
|
(e)
|
6.11
|
|
|
316
|
(a)
(last sentence)
|
2.10
|
|
(a)(1)(A)
|
6.05
|
|
|
(a)(1)(B)
|
6.04
|
|
|
(a)(2)
|
Not
Applicable
|
|
|
(b)
|
6.07
|
|
|
(c)
|
2.13
|
|
|
317 (a)(1)
|
6.08
|
|
|
(a)(2)
|
6.09
|
|
|
(b)
|
2.05
|
|
|
318 (a)
|
10.01
|
|
|
(b)
|
Not
Applicable
|
|
|
(c)
|
10.01
|
|
*This
Cross-Reference
Table does not constitute part of the Indenture and shall not have any bearing
on the interpretation of any of its terms or provisions.
INDENTURE
dated as of [ ], between DOUBLE
HULL TANKERS, INC., a Marshall Islands corporation, and
[ ],
as trustee.
The
Company and the Trustee agree as follows for the benefit of each other and
for
the equal and ratable benefit of the Holders of the securities issued under
this
Indenture (the “Securities”):
DEFINITIONS
AND INCORPORATION BY REFERENCE
For
all
purposes under this Indenture and any supplemental indenture hereto, except
as
otherwise expressly provided or unless the context otherwise requires, the
following terms shall have the following meanings:
“Affiliate”
of any specified Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such specified Person. For purposes of this definition, “control” (including,
with correlative meanings, the terms “controlling,” “controlled by” and “under
common control with”), when used with respect to any Person, shall mean the
power to direct or cause the direction of the management or policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by agreement or otherwise.
“Agent”
means any Registrar, Paying Agent or co-registrar.
“Bankruptcy
Law” means Title 11, U.S. Code or any similar federal or state law for the
relief of debtors.
“Board
of
Directors” means the Board of Directors of the Company, or any authorized
committee of the Board of Directors.
“Board
Resolution” means a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Company to have been adopted by the Board of
Directors or pursuant to authorization by the Board of Directors and to be
in
full force and effect on the date of the certificate and delivered to the
Trustee.
“Business
Day” means any day other than a Legal Holiday.
“Capital
Stock” means, with respect to any Person, any shares or other equivalents
(however designated) of any class of corporate stock or partnership interests
or
any other participations, rights, warrants, options or other interests in the
nature of an equity interest in such Person, including preferred stock,
including any debt security convertible or exchangeable into such equity
interest.
“Clearstream”
means Clearstream Banking, société anonyme, or any successor
thereto.
“Commodity
Price Protection Agreement” means, in respect of a Person, any forward contract,
commodity swap agreement, commodity option agreement or other similar agreement
or arrangement designed to protect such Person against fluctuations in commodity
prices.
“Company”
means Double Hull Tankers, Inc., and any and all successors
thereto.
“Company
Order” means a written order signed in the name of the Company by two Officers,
one of whom must be the Company’s principal executive officer, principal
financial officer or principal accounting officer.
“Corporate
Trust Office of the Trustee” shall be the address of the Trustee specified in
Section 10.02 hereof or such other address as to which the Trustee may give
notice to the Company.
“Currency
Exchange Protection Agreement” means, in respect of a Person, any foreign
exchange contract, currency swap agreement, currency option or other similar
agreement or arrangement designed to protect such Person against fluctuations
in
currency exchange rates.
“Debt”
means, with respect to any Person (without duplication):
(a) the
principal of and premium (if any) in respect of any obligation of such Person
for money borrowed, and any obligation evidenced by notes, debentures, bonds
or
other similar instruments for the payment of which such Person is responsible
or
liable;
(b) all
obligations of such Person as lessee under leases required to be capitalized
on
the balance sheet of the lessee under generally accepted accounting principles
and leases of Property made as part of any sale and leaseback transaction
entered into by such Person;
(c) all
obligations of such Person issued or assumed as the deferred purchase price
of
Property, all conditional sale obligations of such Person and all obligations
of
such Person under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business);
(d) all
obligations of such Person for the reimbursement of any obligor on any letter
of
credit, banker’s acceptance or similar credit transaction;
(e) all
obligations of the type referred to in clauses (a) through (d) of other Persons
and all dividends of other Persons for the payment of which, in either case,
such Person is responsible or liable, directly or indirectly, as obligor,
guarantor or otherwise, including by means of any Guarantee;
(f) all
obligations of the type referred to in clauses (a) through (d) of other Persons
secured by any Lien on any Property of such Person (whether or not such
obligation is assumed by such Person); and
(g) to
the extent not otherwise included in this definition, obligations pursuant
to
any Interest Rate Agreement, Currency Exchange Protection Agreement, Commodity
Price Protection Agreement or any other similar agreement or arrangement of
such
Person.
“Default”
means any event that is, or after notice or passage of time or both would be,
an
Event of Default.
“Definitive
Security” means a certificated Security registered in the name of the Holder
thereof and issued in accordance with Section 2.08 hereof.
“Depositary”
means, with respect to the Securities issuable or issued in whole or in part
in
global form, the Person specified in Section 2.15 hereof as the Depositary
with respect to the Securities, and any and all successors thereto appointed
as
depositary hereunder and having become such pursuant to the applicable provision
of this Indenture.
“Dollar”
means a dollar or other equivalent unit in such coin or currency of the United
States as at the time shall be legal tender for the payment of public and
private debt.
“Euroclear”
means Euroclear Bank S.A./N.V., as operator of the Euroclear System, or any
successor thereto.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Foreign
Currency” means any currency or currency unit issued by a government other than
the government of The United States of America.
“GAAP”
means generally accepted accounting principles in the United States of America
as determined by the Public Company Accounting Principles Oversight
Board.
“Global
Security” when used with respect to any Series of Securities issued
hereunder, means a Security which is executed by the Company and authenticated
and delivered by the Trustee to the Depositary or pursuant to the Depositary’s
instruction, all in accordance with this Indenture and an indenture supplemental
hereto, if any, or Board Resolution and pursuant to a Company Order, which
shall
be registered in the name of the Depositary or its nominee and which shall
represent, and shall be denominated in an amount equal to the aggregate
principal amount of, all the outstanding Securities of such Series or any
portion thereof, in either case having the same terms, including, without
limitation, the same original issue date, date or dates on which principal
is
due, and interest rate or method of determining interest and which shall bear
the legend as prescribed by Section 2.15(c).
“Global
Security Legend” means the legend set forth in Section 2.15(c), which is
required to be placed on all Global Securities issued under this
Indenture.
“Guarantee”
means a guarantee (other than by endorsement of negotiable instruments for
collection in the ordinary course of business), direct or indirect, in any
manner (including, without limitation, by way of a pledge of assets or through
letters of credit or reimbursement agreements in respect thereof), of all or
any
part of any Debt. The term “Guarantor” shall mean any Person Guaranteeing any
obligation.
“Holder”
means a Person in whose name a Security is registered on the Registrar’s
books.
“Indenture”
means this Indenture, as amended or supplemented from time to time.
“Interest
Payment Date” when used with respect to any Series of Securities, means the date
specified in such Securities for the payment of any installment of interest
on
those Securities.
“Interest
Rate Agreement” means, for any Person, any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement designed to protect against fluctuations in interest
rates.
“Lien”
means, with respect to any Property of any Person, any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, lien, charge, encumbrance, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever on or
with respect to such Property (including any capital lease obligation,
conditional sale or other title retention agreement having substantially the
same economic effect as any of the foregoing or any sale and leaseback
transaction).
“Maturity,”
when used with respect to any Security or installment of principal thereof,
means the date on which the principal of such Security or such installment
of
principal becomes due and payable as therein or herein provided, whether at
the
Stated Maturity or by declaration of acceleration, call for redemption, notice
of option to elect repayment or otherwise.
“Officer”
means, with respect to any Person, the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller,
the
Secretary or any Vice-President of such Person.
“Officers’
Certificate” means a certificate signed on behalf of the Company by two Officers
of the Company, one of whom must be the principal executive officer, the
principal financial officer or the principal accounting officer of the Company,
that meets the requirements of Section 10.04 and 10.05 hereof.
“Opinion
of Counsel” means an opinion from legal counsel, that meets the requirements of
Section 10.04 hereof. The counsel may be an employee of or counsel to the
Company, any Subsidiary of the Company or the Trustee.
“Original
Issue Discount Security” means any Security that provides for an amount less
than the stated principal amount thereof to be due and payable upon declaration
of acceleration of the maturity thereof pursuant to
Section 6.02.
“Participant”
means, with respect to the Depositary, Euroclear or Clearstream, a Person who
has an account with the Depositary, Euroclear or Clearstream, respectively
(and,
with respect to the Depository Trust Company, shall include Euroclear and
Clearstream).
“Person”
means any individual, corporation, partnership, limited liability company,
joint
venture, association, joint-stock company, trust, unincorporated organization
or
government or any agency or political subdivision thereof or any other
entity.
“Property”
means, with respect to any Person, any interest of such Person in any kind
of
property or asset, whether real, personal or mixed, or tangible or intangible,
including Capital Stock in, and other securities of, any other
Person.
“Responsible
Officer” with respect to the Trustee, means any Vice President, Assistant Vice
President, Assistant Treasurer or any other officer of the Trustee assigned
by
the Trustee to administer its corporate trust matters and who customarily
performs functions similar to those performed by such Persons who at the time
shall be such officers, respectively, or to whom any corporate trust matter
is
referred because of such Person’s knowledge of and familiarity with the
particular subject and who shall have direct responsibility for administration
of this Indenture.
“SEC”
means the Securities and Exchange Commission.
“Securities”
has the meaning assigned to it in the preamble to this Indenture.
“Securities
Act” means the Securities Act of 1933, as amended.
“Series”
or “Series of Securities” means each series of debentures, notes or other debt
instruments of the Company created pursuant to Sections 2.01 and 2.02
hereof.
“Significant
Subsidiary” means any Subsidiary that would be a “Significant Subsidiary” of the
Company within the meaning of Rule 1-02 under Regulation S-X promulgated by
the
SEC.
“Stated
Maturity,” when used with respect to any Security, means the date specified in
such Security as the fixed date on which an amount equal to the principal amount
of such Security is due and payable.
“Subsidiary”
of any Person means any corporation, limited liability company, association,
partnership or other business entity of which more than 50% of the total voting
power of shares of Capital Stock or other interests (including partnership
interests) entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof is at the time
owned or controlled, directly or indirectly, by (i) such Person,
(ii) such Person and one or more Subsidiaries of such Person or
(iii) one or more Subsidiaries of such Person.
“TIA”
means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) and the rules
and regulations thereunder as in effect on the date on which this Indenture
is
qualified under the TIA, except as provided in Section 9.03.
“Trustee”
means the party named as such above until a successor replaces it in accordance
with the applicable provisions of this Indenture and thereafter means the
successor serving hereunder.
“U.S.
Government Obligations” means direct obligations (or certificates representing
an ownership interest in such obligations) of the United States of America
(including any agency or instrumentality thereof) for the payment of which
the
full faith and credit of the United States of America is pledged and which
are
not callable or redeemable at the issuer’s option.
“U.S.
Person” means a U.S. person as defined in Rule 902(k) under the Securities
Act.
“Voting
Stock” of any Person means all classes of Capital Stock or other interests
(including partnership interests) of such Person then outstanding and normally
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof.
SECTION
1.02. Other Definitions.
|
Term
|
Defined
in Section
|
|
“Additional
Amounts”
|
4.07
|
|
“Covenant
Defeasance”
|
8.03
|
|
“Custodian”
|
6.01
|
|
“Event
of
Default”
|
6.01
|
|
“Legal
Defeasance”
|
8.02
|
|
“Legal
Holiday”
|
10.08
|
|
“Paying
Agent”
|
2.05
|
|
“Registrar”
|
2.05
|
|
“Relevant
Taxing Jurisdiction”
|
4.07
|
|
“Service
Agent”
|
2.05
|
|
“Surviving
Person”
|
5.01
|
|
“Taxes”
|
4.07
|
SECTION
1.03. Incorporation by Reference of Trust
Indenture Act. This Indenture is subject to the mandatory
provisions of the TIA, which are incorporated by reference in and made a part
of
this Indenture. The following TIA terms used in this Indenture have
the following meanings:
“indenture
securities” means the Securities;
“indenture
security Holder” means a Holder of a Security;
“indenture
to be qualified” means this Indenture;
“indenture
trustee” or “institutional trustee” means the Trustee; and
“obligor”
on the Securities means the Company and any successor obligor upon the
Securities.
All
other
terms used in this Indenture that are defined by the TIA, defined by the TIA’s
reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them.
SECTION
1.04. Rules of
Construction. Unless the context otherwise requires:
(1) a
term has the meaning assigned to it;
(2) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with GAAP;
(3) “or”
is not exclusive;
(4) words
in the singular include the plural, and in the plural include the
singular;
(5) provisions
apply to successive events and transactions; and
(6) references
to sections of or rules under the Securities Act shall be deemed to include
substitute, replacement or successor sections or rules adopted by the SEC from
time to time.
THE
SECURITIES
SECTION
2.01. Issuable in Series. The
aggregate principal amount of Securities that may be authenticated and delivered
under this Indenture is unlimited. The Securities may be issued in
one or more Series. All Securities of a Series shall be identical except as
may
be set forth in a Board Resolution, a supplemental indenture or an Officers’
Certificate detailing the adoption of the terms thereof pursuant to the
authority granted under a Board Resolution. In the case of Securities of a
Series to be issued from time to time, the Board Resolution, supplemental
indenture or Officers’ Certificate may provide for the method by which specified
terms (such as interest rate, maturity date, record date or date from which
interest shall accrue) are to be determined. Securities may differ between
Series in respect of any matters.
SECTION
2.02. Establishment of Terms of Series of
Securities. At or prior to the issuance of any Securities within
a Series, the following shall be established (as to the Series generally, in
the
case of Subsection 2.02(a) and either as to such Securities within the
Series or as to the Series generally in the case of Subsections 2.02(b)
through 2.02(w)) by a Board Resolution, a supplemental indenture or an Officers’
Certificate pursuant to authority granted under a Board Resolution:
(a)
the
title of the Securities of the Series (which shall distinguish the Securities
of
that particular Series from the Securities of any other Series);
(b) the
ranking of the Securities of the Series relative to other Debt of the Company
and the terms of any subordination provisions;
(c)
any
limit upon the aggregate principal amount of the Securities of the Series which
may be authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the Series);
(d)
the
date or dates on which the principal and premium of the Securities of the Series
are payable;
(e)
the
rate or rates (which may be fixed or variable) at which the Securities of the
Series shall bear interest, if any, or the method of determining such rate
or
rates, the date or dates from which such interest, if any, shall accrue, the
Interest Payment Dates on which such interest, if any, shall be payable or
the
method by which such dates will be determined, the record dates for the
determination of Holders thereof to whom such interest is payable (in the case
of Securities in registered form), and the basis upon which such interest will
be calculated if other than that of a 360-day year of twelve 30-day
months;
(f)
the
currency or currencies, including composite currencies in which Securities
of
the Series shall be denominated, if other than Dollars, the place or places,
if
any, in addition to or instead of the Corporate Trust Office of the Trustee
(in
the case of Securities in registered form) or the principal New York office
of
the Trustee (in the case of Securities in bearer form), where the principal,
premium and interest with respect to Securities of such Series shall be payable
or the method of such payment, if by wire transfer, mail or other
means;
(g)
the
price or prices at which, the period or periods within which, and the terms
and
conditions upon which, Securities of the Series may be redeemed, in whole or
in
part at the option of the Company or otherwise;
(h)
the
form of the Securities of the Series and whether Securities of the Series are
to
be issued in registered form or bearer form or both and, if Securities are
to be
issued in bearer form, whether coupons will be attached to them, whether
Securities of the Series in bearer form may be exchanged for Securities of
the
Series issued in registered form, and the circumstances under which and the
places at which any such exchanges, if permitted, may be made;
(i)
if
any Securities of the Series are to be issued in bearer form or as one or more
Global Securities representing individual Securities of the Series in bearer
form, whether certain provisions for the payment of additional interest or
tax
redemptions shall apply; whether interest with respect to any portion of a
temporary Security of the Series in bearer form payable with respect to any
Interest Payment Date prior to the exchange of such temporary Security in bearer
form for definitive Securities of the Series in bearer form shall be paid to
any
clearing organization with respect to the portion of such temporary Security
in
bearer form held for its account and, in such event, the terms and conditions
(including any certification requirements) upon which any such interest payment
received by a clearing organization will be credited to the Persons entitled
to
interest payable on such Interest Payment Date; and the terms upon which a
temporary Security in bearer form may be exchanged for one or more definitive
Securities of the Series in bearer form;
(j)
the
obligation, if any, of the Company to redeem, purchase or repay the Securities
of the Series pursuant to any sinking fund or analogous provisions or at the
option of a Holder thereof and the price or prices at which, the period or
periods within which, and the terms and conditions upon which, Securities of
the
Series shall be redeemed, purchased or repaid, in whole or in part, pursuant
to
such obligations;
(k)
the
terms, if any, upon which the Securities of the Series may be exchanged for
any
of the Company’s common stock or other equity interests, and the terms and
conditions upon which such exchange shall be effected, including the initial
exchange price or rate, the exchange period and any other additional
provisions;
(l)
if
other than denominations of $1,000 and any integral multiple thereof, the
denominations in which the Securities of the Series shall be
issuable;
(m)
if
the amount of principal, premium or interest with respect to the Securities
of
the Series may be determined with reference to an index or pursuant to a
formula, the manner in which such amounts will be determined;
(n)
if
the principal amount payable at the Stated Maturity of Securities of the Series
will not be determinable as of any one or more dates prior to such Stated
Maturity, the amount that will be deemed to be such principal amount as of
any
such date for any purpose, including the principal amount thereof which will
be
due and payable upon any Maturity other than the Stated Maturity and which
will
be deemed to be outstanding as of any such date (or, in any such case, the
manner in which such deemed principal amount is to be determined), and if
necessary, the manner of determining the equivalent thereof in
Dollars;
(o)
the
applicability of or any changes or additions to the defeasance and discharge
provisions of Article Eight;
(p)
if
other than the principal amount thereof, the portion of the principal amount
of
the Securities of the Series that shall be payable upon declaration of
acceleration of the maturity thereof pursuant to Section 6.02;
(q)
the
terms, if any, of the transfer, mortgage, pledge or assignment as security
for
the Securities of the Series of any properties, assets, moneys, proceeds,
securities or other collateral, including whether certain provisions of the
TIA
are applicable and any corresponding changes to provisions of this Indenture
as
then in effect;
(r)
any
addition to or change in the Events of Default which applies to any Securities
of the Series and any change in the right of the Trustee or the requisite
Holders of such Series of Securities to declare the principal amount of,
premium, if any, and interest on such Series of Securities due and payable
pursuant to Section 6.02;
(s)
if
the Securities of the Series shall be issued in whole or in part in the form
of
a Global Security, the terms and conditions, if any, upon which such Global
Security may be exchanged in whole or in part for other individual Definitive
Securities of such Series, the Depositary for such Global Security and the
form
of any legend or legends to be borne by any such Global Security in addition
to
or in lieu of the Global Securities Legend;
(t)
any
Trustee, authenticating agent, Paying Agent, transfer agent, Service Agent
or
Registrar;
(u)
the
applicability of, and any addition to or change in, the covenants (and the
related definitions) set forth in Articles Four or Five which applies to
Securities of the Series;
(v)
with
regard to Securities of the Series that do not bear interest, the dates for
certain required reports to the Trustee;
(w)
the
terms applicable to Original Issue Discount Securities, including the rate
or
rates at which original issue discount will accrue;
(x)
any
other terms of Securities of the Series (which terms shall not be prohibited
by
the provisions of this Indenture).
All
Securities of any one Series need not be issued at the same time and may be
issued from time to time, consistent with the terms of this Indenture, if so
provided by or pursuant to the Board Resolution, supplemental indenture or
Officers’ Certificate referred to above, and the authorized principal amount of
any Series may not be increased to provide for issuances of additional
Securities of such Series, unless otherwise provided in such Board Resolution,
supplemental indenture or Officers’ Certificate.
SECTION
2.03. Denominations; Provisions for
Payment. The Securities shall be issuable, except as otherwise
provided with respect to any series of Securities pursuant to Section 2.02,
as registered Securities in the denominations of one thousand Dollars ($1,000)
or any integral multiple thereof, subject to Sections 2.02(f) and
2.02(l). The Securities of any Series shall bear interest payable on
the dates and at the rate specified with respect to that
Series. Unless otherwise provided as contemplated by
Section 2.02 with respect to Securities of any Series, the principal of and
the interest on the Securities of any Series, as well as any premium thereon
in
case of redemption thereof prior to maturity, shall be payable in
Dollars. Such payment shall be made at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, the City and
State of New York. Each Security shall be dated the date of its authentication.
Unless otherwise provided as contemplated by Section 2.02, interest on the
Securities shall be computed on the basis of a 360-day year composed of twelve
30-day months.
The
interest installment on any Security that is payable, and is punctually paid
or
duly provided for, on any Interest Payment Date for Securities of that Series
shall be paid to the Person in whose name said Security (or one or more
predecessor Securities) is registered at the close of business on the regular
record date for such interest installment.
Unless
otherwise set forth in a Board Resolution, a supplemental indenture or an
Officers’ Certificate establishing the terms of any Series of Securities
pursuant to Section 2.02 hereof, the term “regular record date” as used in
this Section with respect to Securities of any Series with respect to any
Interest Payment Date for such Series shall mean (i) either the fifteenth
day of the month immediately preceding the month in which an Interest Payment
Date established for such series pursuant to Section 2.02 hereof shall
occur, if such Interest Payment Date is the first day of a month or
(ii) the first day of the month in which an Interest Payment Date
established for such Series pursuant to Section 2.02 hereof shall occur, if
such Interest Payment Date is the fifteenth day of a month, whether or not
such
date is a Business Day.
Subject
to the foregoing provisions of this Section, each Security of a Series delivered
under this Indenture upon transfer of or in exchange for or in lieu of any
other
Security of such Series shall carry the rights to interest accrued and unpaid,
and to accrue, that were carried by such other Security.
SECTION
2.04. Execution and
Authentication. One or more Officers shall sign the Securities
for the Company by manual or facsimile signature. If an Officer whose
signature is on a Security no longer holds that office at the time the Security
is authenticated, the Security shall nevertheless be valid. A
Security shall not be valid until authenticated by the manual signature of
the
Trustee or an authenticating agent. The signature shall be conclusive
evidence that the Security has been authenticated under this
Indenture. The Securities may contain such notations, legends or
endorsements required by law, stock exchange rule or usage.
The
Trustee shall at any time, and from time to time, authenticate Securities for
original issue in the principal amount provided in the Board Resolution,
supplemental indenture hereto or Officers’ Certificate, upon receipt by the
Trustee of a Company Order. Such Company Order may authorize
authentication and delivery pursuant to oral or electronic instructions from
the
Company or its duly authorized agent or agents, which oral instructions shall
be
promptly confirmed in writing. Each Security shall be dated the date
of its authentication unless otherwise provided by a Board Resolution, a
supplemental indenture hereto or an Officers’ Certificate.
The
aggregate principal amount of Securities of any Series outstanding at any time
may not exceed any limit upon the maximum principal amount for such Series
set
forth in the Board Resolution, supplemental indenture hereto or Officers’
Certificate delivered pursuant to Section 2.02, except as provided in
Section 2.09.
Prior
to
the issuance of Securities of any Series, the Trustee shall have received and
(subject to Section 7.02) shall be fully protected in relying
on: (a) the Board Resolution, supplemental indenture hereto or
Officers’ Certificate establishing the form of the Securities of that Series or
of Securities within that Series and the terms of the Securities of that Series
or of Securities within that Series, (b) an Officers’ Certificate complying
with Section 10.04 and 10.05, and (c) an Opinion of Counsel complying
with Section 10.04 and 10.05.
The
Trustee shall have the right to decline to authenticate and deliver any
Securities of such Series: (a) if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken; or (b) if
the Trustee in good faith by its board of directors or trustees, executive
committee or a trust committee of directors and/or vice-presidents shall
determine that such action would expose the Trustee to personal liability to
Holders of any then outstanding Series of Securities.
The
Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this
Indenture to authentication by the Trustee includes authentication by such
agent. An authenticating agent has the same rights as an Agent to
deal with the Company or an Affiliate of the Company.
SECTION
2.05. Registrar and Paying
Agent. So long as Securities of any Series remaining outstanding,
the Company agrees to maintain an office or agency in the Borough of Manhattan,
the City and State of New York (or any other place or places specified with
respect to such Series pursuant to Section 2.02), where Securities of such
Series may be presented or surrendered for payment (“Paying Agent”),
where Securities of such Series may be presented for registration of transfer
or
exchange (“Registrar”) and where notices and demands to or upon the
Company in respect of the Securities of such Series and this Indenture may
be
served (“Service Agent”). The Registrar shall keep a register
with respect to each Series of Securities and to their transfer and
exchange. The Company will give prompt written notice to the Trustee
of the name and address, and any change in the name or address, of each office
or agency, Registrar, Paying Agent or Service Agent. If at any time
the Company shall fail to maintain any such required office or agency,
Registrar, Paying Agent or Service Agent or shall fail to furnish the Trustee
with the name and address thereof, such presentations, surrenders, notices
and
demands may be made or served at the Corporate Trust Office of the Trustee,
and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The
Company may also from time to time designate one or more co-registrars,
additional paying agents or additional service agents and may from time to
time
rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligations to maintain a Registrar, Paying Agent and Service Agent in each
place so specified pursuant to Section 2.02 for Securities of any Series
for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the name
or
address of any such co-registrar, additional paying agent or additional service
agent. The term “Registrar” includes any co-registrar; the term
“Paying Agent” includes any additional paying agent; and the term “Service
Agent” includes any additional service agent.
The
Company hereby appoints the Trustee as the initial Registrar, Paying Agent
and
Service Agent for each Series unless another Registrar, Paying Agent or Service
Agent, as the case may be, is appointed prior to the time Securities of that
Series are first issued.
SECTION
2.06. Paying Agent to Hold Money in
Trust. The Company shall require each Paying Agent, other than
the Trustee, to agree in writing that the Paying Agent will hold in trust,
for
the benefit of Holders of any Series of Securities, or the Trustee, all money
held by the Paying Agent for the payment of principal of or interest on the
Series of Securities, and will notify the Trustee of any default by the Company
in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it to the
Trustee. Notwithstanding anything in this Section to the contrary,
(i) the agreement to hold sums in trust as provided in this
Section 2.06 is subject to the provisions of Section 8.06, and
(ii) the Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay,
or
direct any paying agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the
same
terms and conditions as those upon which such sums were held by the Company
or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent (if other than the Company or a Subsidiary) shall be released
from all further liability with respect to the money. If the Company
or a Subsidiary of the Company acts as Paying Agent, it shall segregate and
hold
in a separate trust fund for the benefit of Holders of any Series of Securities
all money held by it as Paying Agent.
SECTION
2.07. Holder
Lists. (a) The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders of each Series of Securities and shall otherwise
comply with TIA § 312(a). If the Trustee is not the Registrar,
the Company shall furnish to the Trustee at least ten days before each Interest
Payment Date and at such other times as the Trustee may request in writing
a
list, in such form and as of such date as the Trustee may reasonably require,
of
the names and addresses of Holders of each Series of Securities.
(b) The
Trustee may destroy any list furnished to it as provided in Section 2.07(a)
upon receipt of a new list so furnished.
SECTION
2.08. Transfer and
Exchange. When Securities of a Series are presented to the
Registrar or a co-registrar with a request to register a transfer or to exchange
them for an equal principal amount of Securities of the same Series, the
Registrar shall register the transfer or make the exchange if its requirements
for such transactions are met. To permit registrations of transfers
and exchanges, the Trustee shall authenticate Securities at the Registrar’s
request. No service charge shall be made for any registration of
transfer or exchange (except as otherwise expressly permitted herein), but
the
Company may require payment of a sum sufficient to cover any transfer tax or
similar governmental charge payable in connection therewith (other than any
such
transfer tax or similar governmental charge payable upon exchanges pursuant
to
Sections 2.12, 3.06 or 9.05).
Neither
the Company nor the Registrar shall be required (a) to issue, register the
transfer of, or exchange Securities of any Series during the period beginning
at
the opening of business fifteen days immediately preceding the mailing of a
notice of redemption of Securities of that Series selected for redemption and
ending at the close of business on the day of such mailing, or (b) to
register the transfer or exchange of Securities of any Series selected, called
or being called for redemption as a whole or the portion being redeemed of
any
such Securities selected, called or being called for redemption in
part.
All
Securities presented or surrendered for exchange or registration of transfer,
as
provided in this Section, shall be accompanied (if so required by the Company
or
the Registrar) by a written instrument or instruments of transfer, in form
satisfactory to the Company or the Registrar, duly executed by the Holder or
by
such Holder’s duly authorized attorney in writing.
The
provisions of this Section 2.08 are, with respect to any Global Security,
subject to Section 2.15 hereof.
SECTION
2.09. Mutilated, Destroyed, Lost and Stolen
Securities. If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same Series and of like
tenor
and principal amount and bearing a number not contemporaneously
outstanding.
If
there
shall be delivered to the Company and the Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Security and
(ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice
to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and make available for delivery, in lieu of any such destroyed,
lost or stolen Security, a new Security of the same Series and of like tenor
and
principal amount and bearing a number not contemporaneously
outstanding.
In
case
any such mutilated, destroyed, lost or stolen Security has become or is about
to
become due and payable, the Company in its discretion may, instead of issuing
a
new Security, pay such Security (without surrender thereof except in the case
of
a mutilated Security) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as may be required by them
to
save each of them and any agent of either of them harmless, and, in case of
destruction, loss or theft, evidence to their satisfaction of the destruction,
loss or theft of such Security and of the ownership thereof.
Upon
the
issuance of any new Security under this Section 2.09, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every
new
Security of any Series issued pursuant to this Section 2.09 in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately
with
any and all other Securities of that Series duly issued hereunder.
The
provisions of this Section 2.09 are exclusive and shall preclude (to the
extent lawful) any and all other rights and remedies, notwithstanding any law
or
statute existing or hereafter enacted to the contrary, with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities,
negotiable instruments or other securities.
SECTION
2.10. Outstanding
Securities. The Securities outstanding at any time are all the
Securities authenticated by the Trustee except for those canceled by it, those
delivered to it for cancellation, those reductions in the interest on a Global
Security effected by the Trustee in accordance with the provisions hereof and
those described in this Section 2.10 as not outstanding.
If
a
Security is replaced pursuant to Section 2.09, it ceases to be outstanding
until the Trustee receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser.
If
the
Paying Agent (other than the Company, a Subsidiary of the Company or an
Affiliate of any thereof) holds on the Maturity of Securities of a Series money
sufficient to pay such Securities payable on that date, then on and after that
date such Securities of the Series cease to be outstanding and interest on
them
ceases to accrue.
A
Security does not cease to be outstanding because the Company or an Affiliate
thereof holds the Security.
In
determining whether the Holders of the requisite principal amount of outstanding
Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, the principal amount of an Original Issue Discount
Security that shall be deemed to be outstanding for such purposes shall be
the
amount of the principal thereof that would be due and payable as of the date
of
such determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 6.02.
SECTION
2.11. Treasury Securities. In
determining whether the Holders of the required principal amount of Securities
of a Series have concurred in any request, demand, authorization, direction,
notice, consent or waiver, Securities of a Series owned by the Company or an
Affiliate of the Company shall be disregarded and deemed not to be outstanding,
except that for the purposes of determining whether the Trustee shall be
protected in relying on any such request, demand, authorization, direction,
notice, consent or waiver only Securities of a Series that a Responsible Officer
of the Trustee actually knows are so owned shall be so
disregarded. Subject to the foregoing, only Securities outstanding at
the time shall be considered in any such determination.
SECTION
2.12. Temporary
Securities. Until Definitive Securities are ready for delivery,
the Company may prepare and the Trustee shall authenticate temporary Securities
upon a Company Order. Temporary Securities shall be substantially in
the form of Definitive Securities but may have variations that the Company
considers appropriate for temporary Securities. Without unreasonable
delay, the Company shall prepare and the Trustee upon request shall authenticate
Definitive Securities of the same Series and date of maturity in exchange for
temporary Securities. Until so exchanged, temporary Securities shall
have the same rights under this Indenture as the Definitive
Securities.
SECTION
2.13. Cancellation. The
Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for registration of transfer,
exchange or payment. The Trustee shall cancel all Securities
surrendered for transfer, exchange, payment, replacement or cancellation and
shall dispose of such canceled Securities according to its normal operating
procedures (subject to the record retention requirement of the Exchange Act)
and
deliver a certificate of such disposition to the Company. The Company
may not issue new Securities to replace Securities that it has paid or delivered
to the Trustee for cancellation.
SECTION
2.14. Defaulted Interest. If
the Company defaults in a payment of interest on a Series of Securities, it
shall pay the defaulted interest, plus, to the extent permitted by law, any
interest payable on the defaulted interest, to the persons who are Holders
of
the Series on a subsequent special record date. The Company shall fix
the record date and payment date. At least 30 days before the record
date, the Company shall mail to the Trustee and to each Holder of the Series
a
notice that states the record date, the payment date and the amount of interest
to be paid. The Company may pay defaulted interest in any other
lawful manner.
SECTION
2.15. Global Securities.
(a) Terms
of Securities. A Board Resolution, a supplemental indenture
hereto or an Officers’ Certificate shall establish whether the Securities of a
Series shall be issued in whole or in part in the form of one or more Global
Securities and the Depositary for such Global Security or
Securities.
(b) Transfer
and Exchange. Notwithstanding any provisions to the contrary
contained in Section 2.08 of the Indenture and in addition thereto, any
Global Security shall be exchangeable pursuant to Section 2.08 of the
Indenture for Securities registered in the names of Holders other than the
Depositary for such Security or its nominee only if (i) such Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for such Global Security or if at any time such Depositary ceases to be a
clearing agency registered under the Exchange Act, and, in either case, the
Company fails to appoint a successor Depositary within 90 days of such
event, (ii) the Company executes and delivers to the Trustee an Officers’
Certificate to the effect that such Global Security shall be so exchangeable
or
(iii) an Event of Default with respect to the Securities represented by
such Global Security shall have occurred and be continuing. Any
Global Security that is exchangeable pursuant to the preceding sentence shall
be
exchangeable for Securities registered in such names as the Depositary shall
direct in writing in an aggregate principal amount equal to the principal amount
of the Global Security with like tenor and terms.
Except
as
provided in this Section 2.15(b), a Global Security may only be transferred
in whole but not in part (i) by the Depositary with respect to such Global
Security to a nominee of such Depositary, (ii) by a nominee of such Depositary
to such Depositary or another nominee of such Depositary or (iii) by the
Depositary or any such nominee to a successor Depositary or a nominee of such
a
successor Depositary.
(c) Legend. Any
Global Security issued hereunder shall bear a legend in substantially the
following form:
“THIS
SECURITY IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS
SECURITY) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS
HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT
THAT (A) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT
TO SECTION 2.04 OF THE INDENTURE, (B) THIS SECURITY MAY BE EXCHANGED IN WHOLE
BUT NOT IN PART PURSUANT TO SECTION 2.15(B) OF THE INDENTURE, (C) THIS SECURITY
MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.13 OF
THE
INDENTURE AND (D) EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.15(B) OF THE
INDENTURE, THIS SECURITY MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY
(X)
BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, (Y) BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR (Z) BY
THE
DEPOSITARY OR ANY NOMINEE TO A SUCCESSOR DEPOSITARY OR TO A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.”
(d) Payments. Notwithstanding
the other provisions of this Indenture, unless otherwise specified as
contemplated by Section 2.02, payment of the principal of and interest, if
any, on any Global Security shall be made to the Holder thereof.
(e) Consents,
Declaration and Directions. Except as provided in
Section 2.15(d), the Company, the Trustee and any Agent shall treat a
person as the Holder of such principal amount of outstanding Securities of
such
Series represented by a Global Security as shall be specified in a written
statement of the Depositary with respect to such Global Security, for purposes
of obtaining any consents, declarations, waivers or directions required to
be
given by the Holders pursuant to this Indenture.
SECTION
2.16. CUSIP Numbers. The
Company in issuing the Securities may use “CUSIP” numbers (if then generally in
use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption
as a convenience to Holders; provided that neither the Company nor the
Trustee shall have any responsibility for any defect in the “CUSIP” number that
appears on any Security, check, advice of payment or redemption notice, that
any
such notice may state that no representation is made as to the correctness
of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other elements
of
identification printed on the Securities, and any such redemption shall not
be
affected by any defect in or omission of such numbers. The Company
shall promptly notify the Trustee of any change in CUSIP numbers.
SECTION
2.17. Benefits of
Indenture. Nothing in this Indenture or in the Securities,
express or implied, shall give or be construed to give to any Person, other
than
the parties hereto and the holders of the Securities, any legal or equitable
right, remedy or claim under or in respect of this Indenture, or under any
covenant, condition or provision herein contained; all such covenants,
conditions and provisions being for the sole benefit of the parties hereto
and
of the Holders of the Securities.
REDEMPTION
AND PREPAYMENT
SECTION
3.01. Notices to Trustee. The
Company may, with respect to any Series of Securities, reserve the right to
redeem and pay the Series of Securities or may covenant to redeem and pay the
Series of Securities or any part thereof prior to the Stated Maturity thereof
at
such time and on such terms as provided for in such Series of
Securities. If a Series of Securities is redeemable and the Company
wants or is obligated to redeem prior to the Stated Maturity thereof all or
part
of the Series of Securities pursuant to the terms of such Securities, it shall
notify the Trustee of the redemption date and the principal amount of Securities
of the Series to be redeemed and the redemption price. The Company shall give
such notice to the Trustee at least 30 but no more that 60 days before the
redemption date (or such shorter notice as may be acceptable to the
Trustee).
SECTION
3.02. Selection of Securities to be
Redeemed. Unless otherwise indicated for a particular Series of
Securities by a Board Resolution, a supplemental indenture or an Officers’
Certificate, if less than all of the Securities are to be redeemed or purchased
in an offer to purchase at any time, the Trustee shall select the Securities
to
be redeemed or purchased as follows:
(1) if
the Securities are listed on any national securities exchange, in compliance
with the requirements of the principal national securities exchange, if any,
on
which the Securities are listed; or
(2) if
the Securities are not listed on any national securities exchange, on a pro
rata
basis, by lot or by such other method as the Trustee shall deem fair and
appropriate.
Unless
otherwise indicated for a particular Series of Securities by a Board Resolution,
a supplemental indenture or an Officers’ Certificate, no Securities of $1,000 of
principal amount or less will be redeemed in part. Except as provided
in the preceding sentence, provisions of this Indenture that apply to Securities
called for redemption also apply to portions of Securities called for
redemption. The Trustee shall make the selection at least 25 days but
not more than 60 days before the redemption date from outstanding Securities
of
a Series not previously called for redemption.
If
any
Security is to be redeemed in part only, the notice of redemption that relates
to such Security shall state the portion of the principal amount of that
Security to be redeemed. A new Security in principal amount equal to
the unredeemed portion of the original Security presented for redemption will
be
issued in the name of the Holder thereof upon cancellation of the original
Security. Securities called for redemption become irrevocably due on
the date fixed for redemption at the applicable redemption price, plus accrued
and unpaid interest to the redemption date. On and after the
redemption date, unless the Company defaults in making the applicable redemption
payment, interest ceases to accrue or accrete on Securities or portions of
them
called for redemption.
SECTION
3.03. Notice of
Redemption. Unless otherwise provided for a particular Series of
Securities by a Board Resolution, a supplemental indenture or an Officers’
Certificate, at least 30 days but not more than 60 days before a redemption
date, the Company shall mail or cause to be mailed, by first class mail, a
notice of redemption to each Holder whose Securities are to be redeemed at
its
registered address.
The
notice shall identify the Securities to be redeemed and shall
state:
(1) the
redemption date;
(2) the
redemption price or the appropriate calculation of the redemption price, which
in each case will include interest accrued and unpaid to the date fixed for
redemption;
(3) if
any Security is being redeemed in part, the portion of the principal amount
of
such Security to be redeemed and that, after the redemption date upon surrender
of such Security, a new Security or Securities in principal amount equal to
the
unredeemed portion shall be issued upon cancellation of the original
Security;
(4) the
name and address of the Paying Agent;
(5) that
Securities called for redemption must be surrendered to the Paying Agent to
collect the redemption price;
(6) that,
unless the Company defaults in making such redemption payment, interest on
Securities (or portion thereof) called for redemption ceases to accrue on and
after the redemption date;
(7) the
paragraph of the Securities and/or provision of this Indenture or any
supplemental indenture pursuant to which the Securities called for redemption
are being redeemed; and
(8) the
CUSIP number, if any, printed on the Securities being redeemed; and
(9) that
no representation is made as to the correctness or accuracy of the CUSIP number,
if any, listed in such notice or printed on the Securities.
At
the
Company’s request, the Trustee shall give the notice of redemption in the
Company’s name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officers’ Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as required
by this Section 3.03.
SECTION
3.04. Effect of Notice of
Redemption. Once notice of redemption is mailed in accordance
with Section 3.03 hereof, Securities called for redemption become
irrevocably due and payable on the redemption date at the redemption
price. A notice of redemption may not be conditional.
Failure
to give notice or any defect in the notice to any Holder shall not affect the
validity of the notice to any other Holder.
SECTION
3.05. Deposit of Redemption
Price. Prior to 10:00 a.m. (New York City time) on the redemption
date, the Company shall deposit with the Trustee or with the Paying Agent (or,
if the Company or a Subsidiary of the Company is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the redemption price of,
and accrued interest on, all Securities to be redeemed on that date, other
than
Securities or portions of Securities called for redemption that have been
delivered by the Company to the Trustee for cancellation. The Trustee
or the Paying Agent shall as promptly as practicable return to the Company
any
money deposited with the Trustee or the Paying Agent by the Company in excess
of
the amounts necessary to pay the redemption price of, and accrued interest
on,
all Securities to be redeemed. If such money is then held by the
Company in trust and is not required for such purpose it shall be discharged
from such trust.
If
the
Company complies with the provisions of the preceding paragraph, on and after
the redemption date, interest shall cease to accrue on the Securities or the
portions of Securities called for redemption. If a Security is
redeemed on or after an interest record date but on or prior to the related
interest payment date, then any accrued and unpaid interest shall be paid to
the
Person in whose name such Security was registered at the close of business
on
such record date. If any Security called for redemption shall not be
so paid upon surrender for redemption because of the failure of the Company
to
comply with the preceding paragraph, interest shall be paid on the unpaid
principal, from the redemption date until such principal is paid, and, to the
extent lawful, on any interest not paid on such unpaid principal, in each case
at the rate provided in the Securities.
SECTION
3.06. Securities Redeemed in
Part. Upon surrender of a Security that is redeemed in part, the
Company shall execute and, upon the Company’s written request, the Trustee shall
authenticate for the Holder (at the Company’s expense) a new Security equal in
principal amount to the unredeemed portion of the Security
surrendered.
COVENANTS
SECTION
4.01. Payment of
Securities. The Company covenants and agrees for the benefit of
the Holders of each Series of Securities that it will duly and punctually make
all payments in respect of each Series of Securities on the dates and in the
manner provided in such Series of Securities and this Indenture. Such
payments shall be considered made on the date due if on such date the Trustee
or
the Paying Agent holds, in accordance with this Indenture, money sufficient
to
make all payments with respect to such Securities then due.
SECTION
4.02. SEC Reports. Unless
otherwise indicated in a Board Resolution, a supplemental indenture hereto
or an
Officers’ Certificate, notwithstanding that the Company may not be subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act, so
long as any Securities are outstanding, the Company shall furnish to the Trustee
and the Holders copies of such annual reports and such information, documents
and other reports as are specified in Sections 13 and 15(d) of the Exchange
Act subject to such Sections, at the times specified for the filing of such
information, documents and reports under such Sections. Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Company’s compliance with any of
the covenants hereunder (as to which the Trustee is entitled to rely exclusively
on Officers’ Certificates). The Company also shall comply with the
other provisions of TIA § 314(a).
SECTION
4.03. Compliance
Certificate. The Company shall deliver to the Trustee within 120
days after the end of each fiscal year of the Company an Officers’ Certificate
stating that in the course of the performance by the signers of their duties
as
Officers of the Company they would normally have knowledge of any Default and
whether or not the signers know of any Default that occurred during such
period. If they do, the certificate shall describe the Default, its
status and what action the Company is taking or propose to take with respect
thereto. The Company also shall comply with TIA
§ 314(a)(4).
SECTION
4.04. Further Instruments and
Acts. The Company shall execute and deliver to the Trustee such
further instruments and do such further acts as may be reasonably necessary
or
proper to carry out more effectively the purpose of this Indenture.
SECTION
4.05. Corporate
Existence. Subject to Article Five hereof, the Company shall
do or cause to be done all things necessary to preserve and keep in full force
and effect:
(1) its
limited liability company, corporate, partnership or other existence in
accordance with its organizational documents (as the same may be amended from
time to time) and
(2) the
rights (charter and statutory), licenses and franchises of the Company;
provided, however, that the Company shall not be required to
preserve any such right, license or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct
of
the business of the Company and its Subsidiaries, taken as a whole, and that
the
loss thereof is not adverse in any material respect to the Holders of the
Securities.
SECTION
4.06. Calculation of Original Issue
Discount. The Company shall file with the Trustee promptly at the
end of each calendar year (i) a written notice specifying the amount of
original issue discount (including daily rates and accrual periods) accrued
on
outstanding Securities as of the end of such year and (ii) such other
specific information relating to such original issue discount as may then be
relevant under the Internal Revenue Code of 1986, as amended from time to
time.
SECTION
4.07. Additional Amounts. If,
following any transactions permitted by Section 5.01, the Surviving Person
is
organized other than under the laws of the United States of America, any State
thereof or the District of Columbia, all payments made by the Surviving Person
under or with respect to the Securities shall be made free and clear of and
without withholding or deduction for or on account of any present or future
tax,
duty, levy, impost, assessment or other governmental charge (including
penalties, interest and other liabilities related thereto) (hereinafter
“Taxes”) imposed or levied by or on behalf of the government of the
Surviving Person’s country of incorporation or any political subdivision or any
authority or agency therein or thereof having power to tax, or within any other
jurisdiction in which the Surviving Person is organized or is otherwise resident
for tax purposes or any jurisdiction from or through which payment is made
(each
a “Relevant Taxing Jurisdiction”), unless the Surviving Person is
required to withhold or deduct Taxes by law or by the interpretation or
administration thereof.
If
the Surviving Person is so
required to withhold or deduct any amount for or on account of Taxes imposed
by
a Relevant Taxing Jurisdiction from any payment made under or with respect
to
the Securities, the Surviving Person shall pay such additional amounts
(“Additional Amounts”) as may be necessary so that the net amount
received by the Holders (including Additional Amounts) after such withholding
or
deduction will not be less than the amount the Holders would have received
if
such Taxes had not been withheld or deducted; provided, however,
that the foregoing obligation to pay Additional Amounts does not apply to (1)
any Taxes that would not have been so imposed but for the existence of any
present or former connection between the relevant Holder (or between a
fiduciary, settlor, beneficiary, member or shareholder of, or possessor of
power
over the relevant Holder, if the relevant Holder is an estate, nominee, trust
or
corporation) and the Relevant Taxing Jurisdiction (other than the mere receipt
of such payment or the ownership or holding outside of the Surviving Person’s
country of incorporation of such Security); or (2) any estate, inheritance,
gift, sales, excise, transfer, personal property tax or similar tax, assessment
or governmental charge; nor shall the Surviving Person be required to pay
Additional Amounts (a) if the payment could have been made without such
deduction or withholding if the beneficiary of the payment had presented the
Security for payment within 30 days after the date on which such payment or
such
Security became due and payable or the date on which payment thereof is duly
provided for, whichever is later (except to the extent that the Holder would
have been entitled to Additional Amounts had the Security been presented on
the
last day of such 30 day period), or (b) with respect to any payment of principal
of (or premium, if any, on) or interest on such Security to any Holder who
is a
fiduciary or partnership or any person other than the sole beneficial owner
of
such payment, to the extent that a beneficiary or settlor with respect to such
fiduciary, a member of such a partnership or the beneficial owner of such
payment would not have been entitled to the Additional Amounts had such
beneficiary, settlor, member or beneficial owner been the actual Holder of
such
Security.
Upon
request, the Surviving Person shall provide the Trustee with official receipts
or other documentation satisfactory to the Trustee evidencing the payment of
the
Taxes with respect to which Additional Amounts are paid.
Whenever
in this Indenture, a Board Resolution, a supplemental indenture hereto or an
Officers’ Certificate, or in any Security there is mentioned, in any context:
(1) the payment of principal; (2) purchase prices in connection with a
purchase of Securities; (3) interest; or (4) any other amount payable
on or with respect to any of the Securities, such reference shall be deemed
to
include payment of Additional Amounts provided for in this Section 4.07 to
the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof.
The
obligations described under this Section 4.07 shall survive any
termination, defeasance or discharge of this Indenture and shall apply mutatis
mutandis to any jurisdiction in which any successor Person to the Company or
any
Surviving Person is organized or any political subdivision or taxing authority
or agency thereof or therein.
SUCCESSOR
COMPANIES
SECTION
5.01. Merger, Consolidation or Sale of
Assets. Unless otherwise provided for a particular Series of
Securities by a Board Resolution, a supplemental indenture or an Officers’
Certificate, the Company shall not merge, consolidate or amalgamate with or
into
any other Person (other than a merger of a wholly owned Subsidiary of the
Company into the Company) or sell, transfer, assign, lease, convey or otherwise
dispose of all or substantially all of its Property in one transaction or series
of related transactions unless:
(a)
the
surviving Person (the “Surviving Person”) (if other than the Company) or
the Person to which such sale, transfer, assignment, lease, conveyance or
disposition is made expressly assumes, by supplemental indenture in form
satisfactory to the Trustee, executed and delivered to the Trustee by such
Person, the due and punctual payment of the principal of, and premium, if any,
and interest on, all the Securities of all Series outstanding, according to
their tenor, and the due and punctual performance and observance of all the
covenants and conditions of this Indenture to be performed by the
Company;
(b)
in
the case of a sale, transfer, assignment, lease, conveyance or other disposition
of all or substantially all the Property of the Company, such Property shall
have been transferred as an entirety or virtually as an entirety to one Person
and/or such Person’s Subsidiaries;
(c)
immediately before and immediately after giving effect to such transaction
or
series of related transactions, no Default or Event of Default shall have
occurred and be continuing; and
(d)
the
Company shall deliver, or cause to be delivered, to the Trustee, in form and
substance reasonably satisfactory to the Trustee, an Officers’ Certificate and
an Opinion of Counsel, each stating that such transaction and the supplemental
indenture, if any, in respect thereto comply with this Section 5.01 and
that all conditions precedent herein provided for relating to such transaction
have been complied with.
For
the
purposes of this Section 5.01, the sale, transfer, assignment, lease,
conveyance or other disposition of all the Property of one or more Subsidiaries
of the Company, which Property, if held by the Company instead of such
Subsidiaries, would constitute all or substantially all the Property of the
Company on a consolidated basis, shall be deemed to be the transfer of all
or
substantially all the Property of the Company.
SECTION
5.02. Surviving Person
Substituted. (a) In case of any such consolidation,
amalgamation, merger, sale, conveyance, assignment, transfer, lease or other
disposition and upon the assumption by the successor entity, by supplemental
indenture, executed and delivered to the Trustee and satisfactory in form to
the
Trustee, of the due and punctual payment of the principal of, premium, if any,
and interest on all of the Securities of all series outstanding and the due
and
punctual performance of all of the covenants and conditions of this Indenture
or
established with respect to each series of the Securities pursuant to
Section 2.02 to be performed by the Company with respect to each series,
such successor entity shall succeed to and be substituted for and may exercise
every right and power of the Company under this Indenture with the same effect
as if it had been named as the Company herein, and thereupon the predecessor
entity shall be relieved of all obligations and covenants under this Indenture
and the Securities.
(b) In
case of any such consolidation, amalgamation, merger, sale, conveyance,
assignment, transfer, lease or other disposition such changes in phraseology
and
form (but not in substance) may be made in the Securities thereafter to be
issued as may be appropriate.
(c) Nothing
contained in this Indenture or in any of the Securities shall prevent the
Company from merging into itself or acquiring by purchase or otherwise all
or
any part of the Property of any other Person (whether or not affiliated with
the
Company).
DEFAULTS
AND REMEDIES
SECTION
6.01. Events of
Default. Unless otherwise indicated for a particular Series of
Securities by a Board Resolution, a supplemental indenture hereto, or an
Officers’ Certificate, each of the following constitutes an “Event of
Default” with respect to each Series of Securities:
(1)
default in the payment of the principal or redemption price with respect to
any
Security of such Series when such amount becomes due and payable;
(2)
default in the payment of interest (including additional interest, if any,)
when
due on the Securities of such Series within 30 days of when such amount becomes
due and payable;
(3)
the
Company fails to comply with any of its covenants or agreements in the
Securities of such Series or this Indenture (other than a failure that is
subject to the foregoing clauses (1) or (2)) and such failure continues for
60 days after the notice specified below;
(4)
Debt
of the Company or any Subsidiary of the Company is not paid within any
applicable grace period after final maturity or is accelerated by the holders
thereof because of a default and the total amount of such Debt unpaid or
accelerated exceeds $25.0 million or its foreign currency equivalent at the
time without such Debt having been discharged or acceleration having been
rescinded or annulled within 10 days after receipt by the Company of notice
of
the default by the Trustee or Holders of not less than 25% in aggregate
principal amount of the Securities of such Series then outstanding;
(5)
the
Company or any Significant Subsidiary of the Company pursuant to or within
the
meaning of any Bankruptcy Law:
(A)
commences a voluntary case;
(B)
consents to the entry of an order for relief against it in an involuntary
case;
(C)
consents to the appointment of a Custodian of it or for any substantial part
of
its Property; or
(D)
makes
a general assignment for the benefit of its creditors;
or
takes
any comparable action under any foreign laws relating to
insolvency;
(6)
a
court of competent jurisdiction enters an order or decree under any Bankruptcy
Law that:
(A)
is
for relief against the Company or any Significant Subsidiary of the Company
in
an involuntary case;
(B)
appoints a Custodian of the Company or any Significant Subsidiary of the Company
or for any substantial part of its Property; or
(C)
orders the winding up or liquidation of the Company or any Significant
Subsidiary of the Company;
or
any
similar relief is granted under any foreign laws and the order or decree remains
unstayed and in effect for 60 days; or
(7)
any
judgment or judgments for the payment of money (to the extent not insured by
a
reputable and creditworthy issuer that has not contested coverage with respect
to the underlying claim) in an aggregate amount in excess of $25.0 million
or its foreign currency equivalent at the time is entered against the Company
or
any Subsidiary of the Company and that shall not be waived, satisfied or
discharged for any period of 60 consecutive days during which a stay of
enforcement shall not be in effect.
The
foregoing will constitute Events of Default whatever the reason for any such
Event of Default and whether it is voluntary or involuntary or is effected
by
operation of law or pursuant to any judgment, decree or order of any court
or
any order, rule or regulation of any administrative or governmental
body.
The
term
“Custodian” means, for the purposes of this Article Six, any receiver,
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A
Default
under clause (3) is not an Event of Default until the Trustee or the
Holders of at least 25% in principal amount of the outstanding Securities notify
the Company of the Default and the Company does not cure such Default within
the
time specified after receipt of such notice. Such notice must specify
the Default, demand that it be remedied and state that such notice is a “Notice
of Default.”
The
Company shall deliver to the Trustee, within 30 days after the occurrence
thereof, written notice in the form of an Officers’ Certificate of any Event of
Default and any event which with the giving of notice or the lapse of time
would
become an Event of Default, its status and what action the Company is taking
or
proposes to take with respect thereto.
SECTION
6.02. Acceleration. (a) If an Event
of Default with respect to any Series of Securities at the time outstanding
(other than an Event of Default specified in Section 6.01(5) or (6) with
respect to the Company) occurs and is continuing, the Trustee or the Holders
of
not less than 25% in aggregate principal amount of the outstanding Securities
of
that Series by notice to the Company in writing (and to the Trustee, if given
by
Holders of such Securities of such Series), may declare the principal amount
of
(or, in the case of Original Issue Discount Securities of that Series, the
portion thereby specified in the terms of such Security), premium, if any,
and
accrued and unpaid interest on all the Securities of that Series to be due
and
payable. Upon such a declaration, such amounts shall be due and
payable immediately. If an Event of Default specified in
Section 6.01(5) or (6) with respect to the Company occurs, the principal
amount of (or, in the case of Original Issue Discount Securities of that Series,
the portion thereby specified in the terms of such Security), premium, if any,
and accrued and unpaid interest on all the Securities of each Series of Security
shall ipso facto become and be immediately due and payable without any
declaration or other act on the part of the Trustee or any Holder.
(b) At
any time after the principal of the Securities of any Series of Securities
shall
have been so declared due and payable (or have become immediately due and
payable), and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the Holders of
a
majority in principal amount of the Securities of that Series then outstanding
hereunder, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences, and waive such Event of Default,
if: (i) the Company has paid or deposited with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Securities
of that Series and the principal of (and premium, if any, on) any and all
Securities of that Series that shall have become due otherwise than by
acceleration (with interest upon such principal and premium, if any, and, to
the
extent that such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the Securities
of
that Series to the date of such payment or deposit) and the amount payable
to
the Trustee under Section 7.07, and (ii) any and all Events of Default
under the Indenture with respect to such Series of Securities, other than the
nonpayment of principal (or, in the case of Original Issue Discount Securities
of that Series, the portion thereby specified in the terms of such Security)
on
Securities of that Series that shall not have become due by their terms, shall
have been remedied or waived as provided in Section 6.04. No
such rescission shall affect any subsequent Default or impair any right
consequent thereto.
SECTION
6.03. Other Remedies. If an
Event of Default with respect to any Series of Securities occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the principal amount of (or, in the case of Original Issue Discount
Securities of that Series, the portion thereby specified in the terms of such
Security), premium, if any, and accrued and unpaid interest on the Securities
of
that Series or to enforce the performance of any provision of the Securities
of
that Series or this Indenture.
The
Trustee may institute and maintain a suit or legal proceeding even if it does
not possess any of the Securities of a Series or does not produce any of them
in
the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default with respect
to
any Series of Securities shall not impair the right or remedy or constitute
a
waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are
cumulative.
SECTION
6.04. Waiver of Past
Defaults. The Holders of a majority in principal amount of the
Securities of any Series by notice to the Trustee may waive an existing Default
and its consequences except (i) a Default in the payment of the principal
amount of (or, in the case of Original Issue Discount Securities of that Series,
the portion thereby specified in the terms of such Security), premium, if any,
and accrued and unpaid interest on a Security of that Series, or (ii) a
Default in respect of a provision that under Section 9.02 cannot be amended
without the consent of each Holder of that Series affected. When a
Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.
SECTION
6.05. Control by
Majority. The Holders of a majority in principal amount of the
outstanding Securities of any Series may direct the time, method and place
of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee with respect to that
Series. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture or, subject to Section 7.01, that the
Trustee determines is unduly prejudicial to the rights of any other Holder
of
that Series or that would subject the Trustee to personal liability;
provided, however, that the Trustee may take any other action
deemed proper by the Trustee that is not inconsistent with such
direction. Prior to taking any action hereunder, the Trustee shall be
entitled to indemnity satisfactory to it against all losses and expenses caused
by taking or not taking such action.
SECTION
6.06. Limitation on
Suits. Except to enforce the right to receive payment of the
principal amount of (or, in the case of Original Issue Discount Securities,
the
portion thereby specified in the terms of such Security), premium, if any,
and
accrued and unpaid interest on a Security of any Series when due, no Holder
of a
Security of that Series may pursue any remedy with respect to this Indenture
or
the Securities of that Series unless:
(i) the
Holder previously gave the Trustee written notice stating that an Event of
Default with respect to that Series is continuing;
(ii) the
Holders of at least 25% in aggregate principal amount of the outstanding
Securities of that Series make a written request to the Trustee to pursue the
remedy;
(iii) such
Holder or Holders of that Series offer to the Trustee indemnity satisfactory
to
it to the Trustee against any loss, liability or expense;
(iv) the
Trustee does not comply with the request within 60 days after receipt of the
request and the offer of security or indemnity; and
(v) the
Holders of a majority in aggregate principal amount of the outstanding
Securities of that Series do not give the Trustee a direction inconsistent
with
the request during such 60-day period.
A
Holder
of Securities of any Series may not use this Indenture to prejudice the rights
of another Holder of that Series or to obtain a preference or priority over
another Holder of that Series (it being understood that the Trustee does not
have an affirmative duty to ascertain whether or not such actions or
forbearances are unduly prejudicial to such Holders).
SECTION
6.07. Rights of Holders to Receive
Payment. Notwithstanding any other provision of this Indenture,
the right of any Holder to receive payment of the principal amount of (or,
in
the case of Original Issue Discount Securities, the portion thereby specified
in
the terms of such Security), premium, if any, and accrued and unpaid interest
on
the Securities held by such Holder, on or after their Maturity, or to bring
suit
for the enforcement of any such payment on or after their Maturity, shall not
be
impaired or affected without the consent of such Holder.
SECTION
6.08. Collection Suit by
Trustee. If an Event of Default specified in Section 6.01(1)
or (2) occurs and is continuing, the Trustee may recover judgment in its own
name and as trustee of an express trust against the Company for the whole amount
then due and owing (together with interest on any unpaid interest to the extent
lawful) and the amounts provided for in Section 7.07.
SECTION
6.09. Trustee May File Proofs of
Claim. The Trustee may file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of
the
Trustee and the Holders allowed in any judicial proceedings relative to the
Company, its creditors or its Property and, unless prohibited by law or
applicable regulations, may vote on behalf of the Holders in any election of
a
trustee in bankruptcy or other Person performing similar functions, and any
Custodian in any such judicial proceeding is hereby authorized by each Holder
to
make payments to the Trustee and, in the event that the Trustee shall consent
to
the making of such payments directly to the Holders, to pay to the Trustee
any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts
due
the Trustee under Section 7.07.
SECTION
6.10. Priorities. If the
Trustee collects any money or Property pursuant to this Article Six with
respect to any Series of Securities, it shall pay out the money or Property
in
the following order:
FIRST: to
the Trustee for amounts due under Section 7.07;
SECOND: to
Holders for amounts due and unpaid on the Securities of that Series for the
principal amount of (or, in the case of Original Issue Discount Securities
of
that Series, the portion thereby specified in the terms of such Security),
premium, if any, and accrued and unpaid interest, ratably, without preference
or
priority of any kind, according to the amounts due and payable on the Securities
of that Series for the principal amount of (or, in the case of Original Issue
Discount Securities of that Series, the portion thereby specified in the terms
of such Security), premium, if any, and accrued and unpaid interest,
respectively; and
THIRD: to
the Company.
The
Trustee may fix a record date and payment date for any payment to Holders
pursuant to this Section. At least 15 days before such record date,
the Trustee shall mail to each Holder and the Company a notice that states
the
record date, the payment date and amount to be paid.
SECTION
6.11. Undertaking for
Costs. In any suit for the enforcement of any right or remedy
under this Indenture or in any suit against the Trustee for any action taken
or
omitted by it as Trustee, a court in its discretion may require the filing,
by
any party litigant in the suit, of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made
by
the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders
of more than 10% in principal amount of the then outstanding Securities of
any
Series.
SECTION
6.12. Waiver of Stay or Extension
Laws. The Company (to the extent it may lawfully do so) shall at
any time insist upon, plead, or in any manner whatsoever claim to take the
benefit or advantage of, any stay or extension law, wherever enacted, now or
at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, and shall
not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.
TRUSTEE
SECTION
7.01. Duties of
Trustee. (a) If an Event of Default has occurred and
is continuing with respect to any Series of Securities, the Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in its exercise thereof as a prudent Person would
exercise or use under the circumstances in the conduct of such Person’s own
affairs.
(b) Except
during the continuance of an Event of Default with respect to any Series of
Securities:
(1)
the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture with respect to the Securities of
that
Series, as modified or supplemented by a Board Resolution, a supplemental
indenture hereto or an Officers’ Certificate and no implied covenants or
obligations shall be read into this Indenture against the Trustee;
and
(2)
in
the absence of bad faith on its part, the Trustee may, with respect to
Securities of that Series, conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture. However, in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to
the
Trustee, the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture (but need
not
confirm or investigate the accuracy of mathematical calculations or other facts
stated therein).
(c) The
Trustee may not be relieved from liability for its own grossly negligent action,
its own negligent failure to act or its own willful misconduct, except
that:
(1)
this
paragraph does not limit the effect of paragraph (b) of this
Section;
(2)
the
Trustee shall not be liable for any error of judgment made in good faith by
a
Responsible Officer unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(3)
the
Trustee shall not be liable with respect to any action it takes or omits to
take
in good faith in accordance with a direction received by it pursuant to
Section 6.05.
(d) Every
provision of this Indenture that in any way relates to the Trustee is subject
to
paragraphs (a), (b) and (c) of this Section.
(e) The
Trustee shall not be liable for interest on any money received by it except
as
the Trustee may agree in writing with the Company.
(f) Money
held in trust by the Trustee need not be segregated from funds except to the
extent required by law.
(g) No
provision of this Indenture shall require the Trustee to expend or risk its
own
funds or otherwise incur financial liability in the performance of any of its
duties hereunder or in the exercise of any of its rights or powers, if it shall
have reasonable grounds to believe that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(h) Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions
of
this Section and to the provisions of the TIA.
SECTION
7.02. Rights of
Trustee. (a) The Trustee may conclusively rely on any
document believed by it to be genuine and to have been signed or presented
by
the proper Person. The Trustee need not investigate any fact or
matter stated in the document.
(b) Before
the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers’ Certificate or Opinion of Counsel.
(c) The
Trustee may act through agents or attorneys and shall not be responsible for
the
misconduct or negligence of any agent or attorney appointed with due
care.
(d) The
Trustee shall not be liable for any action it takes or omits to take in good
faith which it believes to be authorized or within its rights or powers;
provided, however, that the Trustee’s conduct does not constitute
willful misconduct or gross negligence.
(e) The
Trustee may consult with counsel of its choice, and the advice or opinion of
counsel with respect to legal matters relating to this Indenture and the
Securities, shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in
good faith and in accordance with the advice or opinion of such
counsel.
(f) Unless
otherwise specifically provided in this Indenture, any demand, request,
direction or notice from the Company shall be sufficient if signed by an Officer
of the Company.
(g) The
Trustee shall not be deemed to have notice of any Default or Event of Default
with respect to the Securities of any Series unless a Responsible Officer of
the
Trustee has actual knowledge thereof or unless written notice of any event
which
is in fact such a default is received by the Trustee at the Corporate Trust
Office of the Trustee, and such notice references such Securities and this
Indenture.
(h) The
rights, privileges, protections, immunities and benefits given to the Trustee,
including, without limitation, its right to be indemnified, are extended to
and
shall be enforceable by, the Trustee in each of its capacities hereunder, and
to
each agent, custodian and other Person employed to act hereunder.
(i) The
Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Holders
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee against
the
costs, expenses and liabilities which might be incurred by the Trustee in
compliance with such request or direction.
(j) The
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney at
the
sole cost of the Company and shall incur no liability or additional liability
of
any kind by reason of such inquiry or investigation.
(k) The
Trustee shall not be liable for any action taken, suffered, or omitted to be
taken by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture.
(l) In
no event shall the Trustee be responsible or liable for special, indirect,
or
consequential loss or damage of any kind whatsoever (including, but not limited
to, loss of profit) irrespective of whether the Trustee has been advised of
the
likelihood of such loss or damage and regardless of the form of
action.
(m) The
Trustee may request that the Company deliver a certificate setting forth the
names of individuals or titles of officers authorized at such time to take
specified actions pursuant to this Indenture.
SECTION
7.03. Individual Rights of
Trustee. The Trustee in its individual or any other capacity may
become the owner or pledgee of Securities and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee. Any Paying Agent, Registrar or co-paying agent may do the
same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.
SECTION
7.04. Trustee’s
Disclaimer. The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company’s use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture, in the Securities, or in any document executed in
connection with the sale of the Securities, other than those set forth in the
Trustee’s certificate of authentication.
SECTION
7.05. Notice of Defaults. If
a Default with respect to Securities of any Series occurs and is continuing
and
if it is actually known to a Responsible Officer of the Trustee, the Trustee
shall mail to each Holder of that Series notice of the Default within 90 days
after it occurs. The Trustee may withhold the notice if and so long
as a committee of its Responsible Officers in good faith determines that
withholding the notice is in the interests of Holders.
SECTION
7.06. Reports by Trustee to
Holder. Unless otherwise specified in the applicable Board
Resolution, supplemental indenture hereto or Officers’ Certificate, commencing
April 15, 2008 and as promptly as practicable after each subsequent April 15,
for so long as Securities remain outstanding, the Trustee shall mail to each
Holder a brief report dated as of such reporting date that complies with
§ 313(a) of the TIA. The Trustee shall also comply with
§ 313(b) of the TIA.
A
copy of
each report at the time of its mailing to Holders shall be filed with the SEC
and each stock exchange (if any) on which the Securities are
listed. The Company agrees to notify promptly the Trustee in writing
whenever the Securities become listed on any stock exchange and of any delisting
thereof.
SECTION
7.07. Compensation and
Indemnity. The Company shall pay to the Trustee from time to time
such compensation for its services as the Company and the Trustee shall from
time to time agree in writing. The Trustee’s compensation shall not
be limited by any law on compensation of a trustee of an express
trust. The Company shall reimburse the Trustee upon request for all
reasonable out-of-pocket expenses incurred or made by it, including costs of
collection, in addition to the compensation for its services. Such
expenses shall include the reasonable compensation and expenses, disbursements
and advances of the Trustee’s agents, counsel, accountants and experts. The
Company shall indemnify the Trustee against any and all loss, liability or
expense (including reasonable attorneys’ fees and expenses) incurred by or in
connection with the administration of this trust and the performance of its
duties hereunder. The Trustee shall notify the Company of any claim
for which it may seek indemnity promptly upon obtaining actual knowledge
thereof; provided, however, that any failure so to notify the
Company shall not relieve the Company of its indemnity obligations
hereunder. The Company need not reimburse any expense or indemnify
against any loss, liability or expense incurred by an indemnified party through
such party’s own willful misconduct, negligence or bad faith.
To
secure
the Company’s payment obligations in this Section 7.07, the Trustee shall
have a lien prior to the Securities on all money or Property held or collected
by the Trustee other than money or Property held in trust to pay the principal
of and interest and any additional payments on particular
Securities.
The
Company’s payment obligations pursuant to this Section 7.07 shall survive
the satisfaction or discharge of this Indenture or the resignation or removal
of
the Trustee. When the Trustee incurs expenses after the occurrence of
a Default specified in Section 6.01(5) or (6) with respect to the Company,
the expenses are intended to constitute expenses of administration under the
Bankruptcy Law.
SECTION
7.08. Replacement of
Trustee. The Trustee may resign at any time with respect to the
Securities of any Series by so notifying the Company. The Holders of
a majority in principal amount of the Securities of any Series may remove the
Trustee and may appoint a successor Trustee with respect to such Series of
Securities. The Company shall remove the Trustee if:
(a)
the
Trustee fails to comply with Section 7.10;
(b)
the
Trustee is adjudged bankrupt or insolvent;
(c)
a
receiver or other public officer takes charge of the Trustee or its Property;
or
(d)
the
Trustee otherwise becomes incapable of acting.
If
the
Trustee resigns, is removed by the Company or by the Holders of a majority
in
principal amount of the Securities of any Series and such Holders do not
reasonably promptly appoint a successor Trustee or if a vacancy exists in the
office of Trustee for any reason (the Trustee in such event being referred
to
herein as the retiring Trustee), the Company shall promptly appoint a successor
Trustee.
A
successor Trustee shall deliver a written acceptance of its appointment to
the
retiring Trustee and to the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its
succession to Holders of that Series of Securities. The retiring
Trustee shall promptly transfer all Property held by it as Trustee to the
successor Trustee, subject to the lien provided for in
Section 7.07.
If
a
successor Trustee does not take office within 60 days after the retiring Trustee
resigns or is removed, the retiring Trustee or the Holders of 10% in principal
amount of the Securities of that Series may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee.
If
the
Trustee fails to comply with Section 7.10, any Holder of that Series of
Securities may petition any court of competent jurisdiction for the removal
of
the Trustee and the appointment of a successor Trustee.
Notwithstanding
the replacement of the Trustee pursuant to this Section 7.08, the Company’s
obligations under Section 7.07 shall continue for the benefit of the
retiring Trustee.
SECTION
7.09. Successor Trustee by
Merger. If the Trustee consolidates with, merges or converts
into, or transfers all or substantially all its corporate trust business or
assets to, another corporation or banking association, the resulting, surviving
or transferee corporation without any further act shall be the successor
Trustee.
In
case
at the time such successor or successors by merger, conversion or consolidation
to the Trustee shall succeed to the trusts created by this Indenture any of
the
Securities shall have been authenticated but not delivered, any such successor
to the Trustee may adopt the certificate of authentication of any predecessor
trustee, and deliver such Securities so authenticated; and if at that time
any
of the Securities shall not have been authenticated, any such successor to
the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor to the Trustee; and in all such cases
such certificates shall have the full force which it is anywhere in the
Securities or in this Indenture provided that the certificate of the Trustee
shall have.
SECTION
7.10. Eligibility;
Disqualification. The Trustee shall at all times satisfy the
requirements of TIA § 310(a). The Trustee shall have a combined
capital and surplus of at least $50,000,000 as set forth in its most recent
published annual report of condition. The Trustee shall comply with
TIA § 310(b); provided, however, that there shall be excluded
from the operation of TIA § 310(b)(1) any indenture or indentures under
which other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such exclusion
set forth in TIA § 310(b)(1) are met.
SECTION
7.11. Preferential Collection of Claims
Against Company. The Trustee shall comply with TIA § 311(a),
excluding any creditor relationship listed in TIA § 311(b). A
Trustee who has resigned or has been removed shall be subject to TIA
§ 311(a) to the extent indicated.
LEGAL
DEFEASANCE, COVENANT DEFEASANCE AND SATISFACTION AND
DISCHARGE
SECTION
8.01. Option to Effect Legal Defeasance or
Covenant Defeasance. The Company may, at the option of its Board
of Directors evidenced by a resolution set forth in an Officers’ Certificate, at
any time, elect to have either Section 8.02 or 8.03 hereof be applied to
all outstanding Securities of any Series upon compliance with the conditions
set
forth below in this Article Eight.
SECTION
8.02. Legal Defeasance and
Discharge. Upon the Company’s exercise under Section 8.01
hereof of the option applicable to this Section 8.02, the Company shall,
subject to the satisfaction of the conditions set forth in Section 8.04
hereof, be deemed to have been discharged from its obligations with respect
to
all outstanding Securities of that Series on the date the conditions set forth
below are satisfied (hereinafter, “Legal Defeasance”). For
this purpose, Legal Defeasance means that the Company shall be deemed to have
paid and discharged the entire Debt represented by the outstanding Securities,
which shall thereafter be deemed to be “outstanding” only for the purposes of
Section 8.05 hereof and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such
Securities and this Indenture (and the Trustee, on demand of and at the expense
of the Company, shall execute proper instruments acknowledging the same), except
for the following provisions which shall survive until otherwise terminated
or
discharged hereunder:
(a)
the
Company’s obligations with respect to such Securities of that Series under
Article Two;
(b)
the
Company’s agreements set forth in Section 5.01 and 5.02;
(c)
the
rights, powers, trusts, duties and immunities of the Trustee hereunder and
the
Company’s obligations in connection therewith under Article Two and Article
Seven (including, but not limited to, the rights of the Trustee and the duties
of the Company under Section 7.07, which shall survive despite the satisfaction
in full of all obligations hereunder); and
(d) this
Article Eight.
Subject
to compliance with this Article Eight, the Company may exercise its option
under
this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.
SECTION
8.03. Covenant
Defeasance. Upon the Company’s exercise under Section 8.01
hereof of the option applicable to this Section 8.03 with respect to any
Series of Securities, the Company shall, subject to the satisfaction of the
conditions set forth in Section 8.04 hereof, be released from its
obligations under any covenants made applicable to the Series of Securities
which are subject to defeasance under the terms of a Board Resolution, a
supplemental indenture hereto or an Officers’ Certificate with respect to the
outstanding Securities of that Series on and after the date the conditions
set
forth in Section 8.04 are satisfied (hereinafter, “Covenant
Defeasance”), and the Securities of that Series shall thereafter be deemed
not “outstanding” for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed “outstanding”
for all other purposes hereunder (it being understood that such Securities
shall
not be deemed outstanding for accounting purposes). For this purpose,
Covenant Defeasance means that, with respect to the outstanding Securities
of
that Series, the Company may omit to comply with and shall have no liability
in
respect of any term, condition or limitation set forth in any such covenant,
whether directly or indirectly, by reason of any reference elsewhere herein
to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 6.01
hereof, but, except as specified above, the remainder of this Indenture and
such
Securities shall be unaffected thereby. In addition, upon the
Company’s exercise under Section 8.01 hereof of the option applicable to
this Section 8.03 hereof with respect to any Series of Securities, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof,
Section 6.01(3) hereof (solely with respect to the covenants described in
Sections 4.02) shall not constitute an Event of Default with respect to such
Securities.
SECTION
8.04. Conditions to Legal or Covenant
Defeasance. The following shall be the conditions to the
application of either Section 8.02 or 8.03 hereof to the outstanding
Securities:
In
order
to exercise either Legal Defeasance or Covenant Defeasance with respect to
any
Series of Securities:
(1)
the
Company must irrevocably deposit in trust with the Trustee money or U.S.
Government Obligations or a combination thereof for the payment of principal
of
and interest on the Securities of such Series to the Stated Maturity or
redemption, as the case may be;
(2)
the
Company shall have delivered to the Trustee a certificate from a nationally
recognized firm of independent registered public accountants expressing their
opinion that the payments of principal and interest when due on the deposited
U.S. Government Obligations plus any deposited money without investment will
provide cash at such times and in such amounts as will be sufficient to pay
principal and interest when due on all the Securities of such Series to the
Stated Maturity or redemption, as the case may be;
(3)
123
days pass after the deposit is made and during the 123 day period no Default
specified in Section 6.01(5) or (6) with respect to the Company occurs that
is
continuing at the end of the period;
(4)
no
Default or Event of Default with respect to that Series of Securities shall
have
occurred and be continuing on the date of such deposit (other than a Default
or
Event of Default with respect to that Series of Securities resulting from the
borrowing of funds to be applied to such deposit);
(5)
such
deposit does not constitute a default under any other agreement binding on
the
Company;
(6)
the
Company shall have delivered to the Trustee an Opinion of Counsel to the effect
that the trust resulting from the deposit does not require registration under
the Investment Company Act of 1940;
(7)
in
the case of Legal Defeasance, the Company shall have delivered to the Trustee
an
Opinion of Counsel stating that (i) the Company has received from, or there
has
been published by, the Internal Revenue Service a ruling, or (ii) since the
date
of this Indenture there has been a change in the applicable Federal income
tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel shall confirm that, the Holders of such Series of Securities will not
recognize income, gain or loss for Federal income tax purposes as a result
of
such defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred;
(8)
in
the case of the Covenant Defeasance, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders of such Series
of
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance had not occurred;
and
(9)
the
Company shall have delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent to the defeasance
and discharge of the Securities as contemplated by this Article Eight have
been
complied with.
SECTION
8.05. Deposited Money and U.S. Government
Obligations to be Held in Trust; Other Miscellaneous
Provisions. Subject to Section 8.06 hereof, all money and
noncallable U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee, collectively for
purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04
hereof in respect of the outstanding Securities of the Series shall be held
in
trust and applied by the Trustee, in accordance with the provisions of such
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as Paying Agent) as the Trustee
may
determine, to the Holders of such Securities of all sums due and to become
due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by
law.
The
Company shall pay and indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against the cash or noncallable U.S. Government
Obligations deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding
Securities of that Series.
Anything
in this Article Eight to the contrary notwithstanding, the Trustee shall deliver
or pay to the Company from time to time upon the request of the Company any
money or noncallable U.S. Government Obligations held by it as provided in
Section 8.04 hereof which, in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under
Section 8.04(2) hereof), are in excess of the amount thereof that would
then be required to be deposited to effect an equivalent Legal Defeasance or
Covenant Defeasance.
SECTION
8.06. Repayment to
Company. Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment of the principal
of, premium, if any, or interest on any Security and remaining unclaimed for
two
years after such principal, and premium, if any, or interest has become due
and
payable shall be paid to the Company on its request or, if then held by the
Company, shall be discharged from such trust; and the Holder of such Security
shall thereafter look only to the Company for payment thereof, and all liability
of the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before
being required to make any such repayment, shall at the expense of the Company
cause to be published once, in the New York Times and The Wall Street Journal
(national edition), notice that such money remains unclaimed and that, after
a
date specified therein, which shall not be less than 30 days from the date
of
such notification or publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION
8.07. Reinstatement. If the
Trustee or Paying Agent is unable to apply any Dollars or noncallable U.S.
Government Obligations in accordance with Section 8.02 or 8.03 hereof, as
the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
then
the Company’s obligations under this Indenture and the Securities shall be
revived and reinstated as though no deposit had occurred pursuant to
Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent
is permitted to apply all such money in accordance with Section 8.02 or
8.03 hereof, as the case may be; provided, however, that, if the
Company makes any payment of principal of, premium, if any, or interest on
any
Security following the reinstatement of its obligations, the Company shall
be
subrogated to the rights of the Holders of such Securities to receive such
payment from the money held by the Trustee or Paying Agent.
SECTION
8.08. Satisfaction and Discharge of
Indenture. If at any time: (a) the Company shall
have delivered to the Trustee for cancellation all Securities of a Series
theretofore authenticated (other than any Securities that shall have been
destroyed, lost or stolen and that shall have been replaced or paid as provided
in Section 2.09 and Securities for whose payment money and/or U.S.
Government Obligations have theretofore been deposited in trust or segregated
and held in trust by the Company and thereupon repaid to the Company or
discharged from such trust, as provided in Section 8.06); or (b) all
such Securities of a particular Series not theretofore delivered to the Trustee
for cancellation shall have become due and payable, or are by their terms to
become due and payable within one year or are to be called for redemption within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption, and the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders of that Series of Securities, cash in
United States Dollars, noncallable U.S. Government Obligations, or a combination
thereof, in such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay at maturity or upon
redemption all Securities of that Series not theretofore delivered to the
Trustee for cancellation, including principal of, premium, if any, and interest
due or to become due to such date of maturity or date fixed for redemption,
as
the case may be, and if the Company shall also pay or cause to be paid all
other
sums payable hereunder with respect to such Series by the Company, and shall
have delivered to the Trustee an Opinion of Counsel and an Officers’
Certificate, each stating that all conditions precedent relating to the
satisfaction and discharge of this Indenture with respect to such Series have
been complied with, then this Indenture shall thereupon cease to be of further
effect with respect to such Series except for:
(i)
(a) the Company’s obligations with respect to such Securities of that
Series under Article Two;
(b)
the
Company’s agreements set forth in Section 5.01 and 5.02;
(c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder and
the
Company’s obligations in connection therewith (including, but not limited to,
the rights of the Trustee and the duties of the Company under Section 7.07,
which shall survive despite the satisfaction in full of all obligations
hereunder); and
(d) this
Article Eight,
each
of
which shall survive until the Securities of such Series have been paid in full
(thereafter, the Company’s obligations in Section 7.07 only shall
survive).
Upon
the
Company’s exercise of this Section 8.08, the Trustee, on demand of the Company
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture with respect to
such Series of Securities.
AMENDMENTS
SECTION
9.01. Without Consent of
Holders. The Company and the Trustee may amend or supplement this
Indenture or the Securities without the consent of any Holder:
(1) to
evidence the succession of another Person to the Company pursuant to
Article Five and the assumption by such successor of the
Company’s covenants, agreements and obligations
in this Indenture and in the Securities;
(2) to
provide for the issuance of additional Securities in accordance with the
limitations set forth herein;
(3) to
surrender any right or power conferred upon the Company by this Indenture,
to
add to the covenants of the Company such further covenants, restrictions,
conditions or provisions for the protection of the Holders of all or any Series
of Securities as the Board of Directors of the Company shall consider to be
for
the protection of the Holders of such Securities, and to make the occurrence,
or
the occurrence and continuance, of a default in respect of any such additional
covenants, restrictions, conditions or provisions a Default or an Event of
Default under this Indenture; provided, however, that with respect
to any such additional covenant, restriction, condition or provision, such
amendment may provide for a period of grace after default, which may be shorter
or longer than that allowed in the case of other Defaults, may provide for
an
immediate enforcement upon such Default, may limit the remedies available to
the
Trustee upon such Default or may limit the right of Holders of a majority in
aggregate principal amount of the Securities of any Series to waive such
default;
(4) to
cure any ambiguity or correct or supplement any provision contained in this
Indenture, in any supplemental indenture or in any Securities that may be
defective or inconsistent with any other provision contained
therein;
(5) to
convey, transfer, assign, mortgage or pledge any Property to or with the
Trustee, or to make such other provisions in regard to matters or questions
arising under this Indenture as shall not adversely affect the interests of
any
Holders of Securities of any Series;
(6) to
modify or amend this Indenture in such a manner as to permit the qualification
of this Indenture or any supplemental indenture hereto under the TIA as then
in
effect;
(7) to
add or to change any of the provisions of this Indenture to provide that
Securities in bearer form may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal or premium with respect
to Securities in registered form or of principal, premium or interest with
respect to Securities in bearer form, or to permit Securities in registered
form
to be exchanged for Securities in bearer form, so as to not adversely affect
the
interests of the Holders or any coupons of any Series in any material respect
or
permit or facilitate the issuance of Securities of any Series in uncertificated
form;
(8) to
secure the Securities;
(9) to
make any change that does not adversely affect the rights of any
Holder;
(10) to
add to, change, or eliminate any of the provisions of this Indenture with
respect to one or more Series of Securities, so long as any such addition,
change or elimination not otherwise permitted under this Indenture shall
(A) neither apply to any Security of any Series created prior to the
execution of such supplemental indenture and entitled to the benefit of such
provision nor modify the rights of the Holders of any such Security with respect
to the benefit of such provision or (B) become effective only when there is
no such Security outstanding;
(11) to
evidence and provide for the acceptance of appointment by a successor or
separate Trustee with respect to the Securities of one or more Series and to
add
to or change any of the provisions of this Indenture as shall be necessary
to
provide for or facilitate the administration of this Indenture by more than
one
Trustee; or
(12) to
establish the form or terms of Securities and coupons of any Series pursuant
to
Article Two.
SECTION
9.02. With Consent of
Holders. The Company and the Trustee may amend this Indenture or
the Securities of any Series without notice to any Holder but with the written
consent of the Holders of at least a majority in principal amount of the
Securities of each Series then outstanding (including consents obtained in
connection with a tender offer or exchange offer for the Securities) affected
by
such amendment. However, without the consent of each Holder affected,
an amendment may not:
(1)
reduce the principal amount of Securities whose Holders must consent to an
amendment, modification, supplement or waiver;
(2)
reduce the rate of or extend the time for payment of interest on any
Security;
(3)
reduce the principal of or change the Stated Maturity of any
Security;
(4)
reduce the amount payable upon the redemption of any Security or add redemption
provisions to any Security;
(5)
make
any Security payable in money other than that stated in this Indenture or the
Security; or
(6)
make
any change in Section 4.07, 6.04 or 6.07 hereof or in the foregoing
amendment and waiver provisions.
It
shall
not be necessary for the consent of the Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such consent approves the substance thereof. After an amendment under
this Section becomes effective, the Company shall mail to all affected Holders
a
notice briefly describing such amendment. The failure to give such
notice to all such Holders, or any defect therein, shall not impair or affect
the validity of an amendment under this Section.
SECTION
9.03. Compliance with Trust Indenture
Act. Every amendment or supplement to this Indenture or the
Securities shall comply with the TIA as then in effect.
SECTION
9.04. Revocation and Effect of Consents and
Waivers. A consent to an amendment or a waiver by a Holder of a
Security shall bind the Holder and every subsequent Holder of that Security
or
portion of the Security that evidences the same debt as the consenting Holder’s
Security, even if notation of the consent or waiver is not made on the
Security. However, any such Holder or subsequent Holder may revoke
the consent or waiver as to such Holder’s Security or portion of the Security if
the Trustee receives the notice of revocation before the date the amendment
or
waiver becomes effective. After an amendment or waiver becomes
effective, it shall bind every Holder. An amendment or waiver becomes
effective once both (i) the requisite number of consents have been received
by the Company or the Trustee and (ii) such amendment or waiver has been
executed by the Company and the Trustee.
The
Company may, but shall not be obligated to, fix a record date for the purpose
of
determining the Holders entitled to give their consent or take any other action
described above or required or permitted to be taken pursuant to this
Indenture. If a record date is fixed, then notwithstanding the
immediately preceding paragraph, those Persons who were Holders at such record
date (or their duly designated proxies), and only those Persons, shall be
entitled to give such consent or to revoke any consent previously given or
to
take any such action, whether or not such Persons continue to be Holders after
such record date. No such consent shall be valid or effective for
more than 120 days after such record date.
SECTION
9.05. Notation on or Exchange of
Securities. If an amendment changes the terms of a Security, the
Trustee may require the Holder of the Security to deliver it to the
Trustee. The Trustee may place an appropriate notation on the
Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines,
the Company in exchange for the Security shall issue and the Trustee shall
authenticate a new Security that reflects the changed terms. Failure
to make the appropriate notation or to issue a new Security shall not affect
the
validity of such amendment.
SECTION
9.06. Trustee to Sign
Amendments. The Trustee shall sign any amendment authorized
pursuant to this Article Nine if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does,
the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it
and
to receive, and (subject to Section 7.02) shall be fully protected in
relying upon, an Officers’ Certificate and an Opinion of Counsel stating that
such amendment is authorized or permitted by this Indenture.
SECTION
9.07. Payment for
Consent. Neither the Company nor any Affiliate of the Company
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture or the Securities unless such consideration is offered to
be
paid to all Holders, ratably, that so consent, waive or agree to amend in the
time frame set forth in solicitation documents relating to such consent, waiver
or agreement.
MISCELLANEOUS
SECTION
10.01. Trust Indenture Act
Controls. If any provision of this Indenture limits, qualifies or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
SECTION
10.02. Notices. Any notice
or communication shall be in writing and delivered in person or mailed by
first-class mail addressed as follows:
If
to the
Company:
Double
Hull Tankers, Inc.
26
New
Street
St
Helier, Jersey JE23RA
Channel
Islands
If
to the
Trustee:
[ ]
Attn: [ ]
Telecopy: [ ]
The
Company or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.
Any
notice or communication mailed to a Holder shall be mailed to the Holder at
the
Holder’s address as it appears on the registration books of the Registrar and
shall be sufficiently given if so mailed within the time
prescribed.
Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above, it is duly given, whether
or not the addressee receives it.
SECTION
10.03. Communication by Holders with Other
Holders. Holders may communicate pursuant to TIA § 312(b)
with other Holders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else
shall have the protection of TIA § 312(c).
SECTION
10.04. Certificate and Opinion as to
Conditions Precedent. Upon any request or application by the
Company to the Trustee to take or refrain from taking any action under this
Indenture, the Company shall furnish to the Trustee:
(1)
an
Officers’ Certificate in form and substance reasonably satisfactory to the
Trustee stating that, in the opinion of the signers, all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have
been
complied with; and
(2)
an
Opinion of Counsel in form and substance reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent
have
been complied with.
SECTION
10.05. Statements Required in Certificate
or Opinion. Each certificate or opinion with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:
(1)
a
statement that the individual making such certificate or opinion has read such
covenant or condition;
(2)
a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based;
(3)
a
statement that, in the opinion of such individual, he has made such examination
or investigation as is necessary to enable him to express an informed opinion
as
to whether or not such covenant or condition has been complied with;
and
(4)
a
statement as to whether or not, in the opinion of such individual, such covenant
or condition has been complied with.
SECTION
10.06. Acts of
Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture
to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person
or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to
the
Company. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the “Act” of
Holders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this
Section.
(b) The
fact and date of the execution by any Person of any such instrument or writing
may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to such officer the execution thereof. Where
such execution is by a signer acting in a capacity other than such signer’s
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer’s authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The
ownership of bearer securities may be proved by the production of such bearer
securities or by a certificate executed by any trust company, bank, banker
or
other depositary, wherever situated, if such certificate shall be deemed by
the
Trustee to be satisfactory, showing that at the date therein mentioned such
Person had on deposit with such depositary, or exhibited to it, the bearer
securities therein described; or such facts may be proved by the certificate
or
affidavit of the Person holding such bearer securities, if such certificate
or
affidavit is deemed by the Trustee to be satisfactory. The Trustee
and the Company may assume that such ownership of any bearer security continues
until (i) another such certificate or affidavit bearing a later date issued
in respect of the same bearer security is produced, (ii) such bearer
security is produced to the Trustee by some other Person, (iii) such bearer
security is surrendered in exchange for a registered security or (iv) such
bearer security is no longer outstanding. The ownership of bearer
securities may also be proved in any other manner which the Trustee deems
sufficient.
(d) The
ownership of registered securities shall be proved by the register maintained
by
the Registrar.
(e) Any
request, demand, authorization, direction, notice, consent, waiver or other
Act
of the Holder of any Security shall bind every future Holder of the same
Security and the holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company
in
reliance thereon, whether or not notation of such action is made upon such
Security.
(f) If
the Company shall solicit from the Holders any request, demand, authorization,
direction, notice, consent, waiver or other Act, the Company may, at its option,
by or pursuant to a Board Resolution, fix in advance a record date for the
determination of Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Company shall have
no
obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may
be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and
for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the
Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than six months
after the record date.
(g) The
Depositary, as a Holder, may appoint agents and otherwise authorize Participants
to give or take any request, demand, authorization, direction, notice, consent,
waiver or other action which a Holder is entitled to give or take under the
Indenture.
SECTION
10.07. Rules by Trustee, Paying Agent and
Registrar. The Trustee may make reasonable rules for action by or
a meeting of Holders. The Registrar and the Paying Agent may make
reasonable rules for their functions.
SECTION
10.08. Legal Holidays. A
“Legal Holiday” is a Saturday, Sunday or other day on which banking
institutions in New York State are authorized or required by law to
close. If a payment date is a Legal Holiday, payment shall be made on
the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a record date is a Legal
Holiday, the record date shall not be affected.
SECTION
10.09. Governing Law.THIS
INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS
OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. EACH OF THE COMPANY
AND THE TRUSTEE 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 INDENTURE, THE NOTES OR THE TRANSACTION
CONTEMPLATED HEREBY.
SECTION
10.10. No Recourse Against
Others. A director, officer, employee or shareholder, as such, of
any Company shall not have any liability for any obligations of the Company
under the Securities or this Indenture or for any claim based on, in respect
of
or by reason of such obligations or their creation. By accepting a
Security, each Holder shall waive and release all such
liability. This waiver and release shall be part of the consideration
for the issuance of the Securities.
SECTION
10.11. Successors. All
agreements of the Company in this Indenture and the Securities shall bind its
successors. All agreements of the Trustee in this Indenture shall
bind its successors.
SECTION
10.12. Multiple
Originals. The parties may sign any number of copies of this
Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy of the
Indenture is enough to prove this Indenture.
SECTION
10.13. Table of Contents;
Headings. The table of contents, cross-reference sheet and
headings of the Articles and Sections of this Indenture have been inserted
for
convenience of reference only, are not intended to be considered a part hereof
and shall not modify or restrict any of the terms or provisions
hereof.
SECTION
10.14. Severability. If any
provision in this Indenture is deemed unenforceable, it shall not affect the
validity or enforceability of any other provision set forth herein, or of the
Indenture as a whole.
IN
WITNESS WHEREOF, the parties have caused this Indenture to be duly executed
as
of the date first written above.
| DOUBLE HULL TANKERS, INC., | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
| [ ], | |||
| as Trustee | |||
|
|
By:
|
||
| Name: | |||
| Title: | |||
49
Exhibit
5.1
REEDER
& SIMPSON P.C.
ATTORNEYS
AT LAW
|
P.O.
Box 601
RRE
Commercial Center
Majuro,
MH 96960
Marshall
Islands
|
Telephone:
011-692-625-3602
Facsimile:
011-692-625-3603
Email:
dreeder@ntamar.net
simpson@otenet.gr
|
October
29, 2007
Ladies
and Gentlemen:
Re:
Double Hull Tankers, Inc. (the
“Company”)
Ladies
and Gentlemen:
We
are
licensed to practice law in the Republic of the Marshall Islands (the
“RMI”), and are members in good standing of the bar
of
the RMI. We are acting as special RMI counsel to the Company, a RMI
non-resident domestic corporation, in connection with the registration by the
Company of $200,000,000 aggregate initial public offering price of its (i)
shares of common stock, par value US$0.01 per share (the “Common
Stock”), (ii) shares of preferred stock, par value US$0.01 per
share (the “Preferred Stock”), and (iii) senior or
subordinated debt securities (the “Debt Securities”),
or any combination thereof, under the Securities Act of 1933, as amended (the
“Securities Act”), from time to time, in or pursuant
to one or more offerings on terms to be determined at the time of sale, on
a
Registration Statement on Form F-3 filed with the Securities and Exchange
Commission (the “Commission”), and all amendments
thereto (such registration statement as so amended, being hereinafter referred
to as the “Registration Statement”).
In
connection with the opinion, we have examined electronic copies, certified
or
otherwise identified to our satisfaction, of the Registration Statement and
the
exhibits attached thereto and such other documents, corporate records and other
instruments as we have deemed necessary or appropriate for the purposes of
this
opinion, including without limitations, resolutions adopted by the board of
directors of the Company on August 22, 2007. We have also made such
examinations of matters of laws as we deemed necessary in connection with the
opinion expressed herein.
We
express no opinion as to matters governed by, or the effect or applicability
of
any laws of any jurisdiction other than the laws of the RMI which are in effect
as the date hereof. This opinion speaks as of the date hereof, and it
should be recognized that changes may occur in the laws of the RMI after the
date of this letter which may affect the opinions set forth
herein. We assume no obligation to advise the parties, their counsel,
or any other party seeking to rely upon this opinion, of any such changes,
whether or not material, or of any other matter which may hereinafter be brought
to our attention.
Based
upon and subject to the assumptions, qualifications and limitations herein,
we
are of the opinion that the Common Stock and the Preferred Stock have been
duly
authorized, and when the Common Stock and the Preferred Stock is issued, sold
and paid for as contemplated in the prospectus included in the Registration
Statement, will be validly issued, fully paid and non-assessable and that the
Debt Securities will constitute valid and legally binding obligations of the
Company enforceable against the Company in accordance with their
terms.
We
hereby
consent to the filing of this opinion with the Commission as an exhibit to
the
Registration Statement. We also consent to the reference to our firm
under the caption “Legal Matters” in the Registration
Statement. In giving this consent, we do not thereby admit that we
are included in the category of persons whose consent is required under Section
7 of the Securities Act or the rules and regulations of the
Commission.
Sincerely,
/s/
Dennis J. Reeder
Reeder
& Simpson
Dennis
J.
Reeder
Exhibit
8.1
October
29, 2007
Ladies
and Gentlemen:
We
have
acted as special United States counsel to Double Hull Tankers, Inc., a
company incorporated under the laws of the Marshall Islands (the “Company”), in
connection with the registration by the Company of up to an aggregate of
US
$200,000,000 of securities which may include common shares, preferred shares
and
debt securities under the Securities Act of 1933, as amended (the “Securities
Act”), on a Registration Statement on Form F-3 filed with the Securities
and Exchange Commission (the “Commission”), and all amendments thereto (such
registration statement, as so amended, being hereinafter referred to as the
“Registration Statement”).
In
rendering our opinion, we have reviewed the Registration Statement and have
examined such records, representations, documents, certificates or other
instruments as in our judgment are necessary or appropriate to enable us
to
render the opinion expressed below. In this examination, we have
assumed the legal capacity of all natural persons, the genuineness of all
signatures, the authenticity of all documents submitted to us as originals,
the
conformity to original documents of all documents submitted to us as certified,
conformed, or photostatic copies, and the authenticity of the originals of
such
copies. In making our examination of documents executed, or to be
executed, by the parties indicated therein, we have assumed that each party,
including the Company, is duly organized and existing under the laws of the
applicable jurisdiction of its organization and had, or will have, the power,
corporate or other, to enter into and perform all obligations thereunder,
and we
have also assumed the due authorization by all requisite action, corporate
or
other, and execution and delivery by each party indicated in the documents
and
that such documents constitute, or will constitute, valid and binding
obligations of each party.
In
rendering our opinion, we have considered the applicable provisions of the
Internal Revenue Code of 1986, as amended (the “Code”), regulations promulgated
thereunder by the U.S. Department of Treasury (the “Regulations”), pertinent
judicial authorities, rulings of the U.S. Internal Revenue Service, and such
other authorities as we have considered relevant, in each case as in effect
on
the date hereof. It should be noted that the Code, Regulations,
judicial decisions, administrative interpretations and other authorities
are
2
subject
to change at any time, possibly with retroactive effect. It should
also be noted that (as discussed in the Registration Statement) there is
no
direct legal authority addressing certain of the issues relevant to our opinion
– in particular, the issue regarding whether the Company is currently a passive
foreign investment company. A material change in any of the materials
or authorities upon which our opinion is based could affect the conclusions
set
forth herein. There can be no assurance, moreover, that any opinion
expressed herein will be accepted by the Internal Revenue Service, or if
challenged, by a court.
Based
upon the foregoing, although the discussion in the Registration Statement
under
the heading “Tax Considerations – United States Federal Income Tax
Considerations” does not purport to discuss all possible United States federal
income tax consequences of the acquisition, ownership and disposition of
Company
common stock, we hereby confirm that the statements of law (including the
qualifications thereto) under such heading represent our opinion of the material
United States federal income tax consequences of the acquisition, ownership
and
disposition of Company common stock, subject to certain assumptions expressly
described in the Registration Statement under such heading.
We
express no other opinion, except as set forth above. We disclaim any
undertaking to advise you of any subsequent changes in the facts stated or
assumed herein or subsequent changes in applicable law. Any changes
in the facts set forth or assumed herein may affect the conclusions stated
herein.
We
hereby
consent to the filing of this opinion with the Commission as Exhibit 8.1 to
the Registration Statement. We also consent to the reference to our
firm under the caption “Legal Matters” in the prospectus forming a part of the
Registration Statement. In giving this consent, we do not thereby
admit that we are included in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the
Commission.
Very
truly yours,
|
|
/s/ Cravath, Swaine & Moore LLP | ||
Double
Hull Tankers, Inc.
26
New Street
St.
Helier, Jersey JE23RA
Channel
Islands
O
Exhibit
10.3.1
MEMORANDUM
OF AGREEMENT Norwegian Shipbrokers’ Association’s Memorandum of
Agreement for sale and purchase of ships. Adopted by The Baltic and
International Maritime Council (BIMCO) in
1956. Code-name SALEFORM 1993 Revised 1966,
1983 and 1986/87. Dated: 6th July
2007 ORIGINAL First Suezmax Tanker Corporation, Majuro,
Marshall Islands hereinafter called the Sellers, have agreed 1
to sell, and Double Hull Tankers Inc., or Nominee hereinafter called the Buyers,
have agreed to buy 2 Name: MT
“BESIKTAS” 3 Classification
Society/Class: American Bureau of Shipping (ABS) 4
Built: 2001 By: HHI, S.
Korea 5 Flag: Marshall
Islands Place of Registration: Majuro,
Marshall Islands 6 Call
Sign: TCBS Grt/Nrt: 82250/53432 7
Registration Number: 317 8 hereinafter
called the Vessel, on the following terms and
conditions: 9 Definitions 10 Printed
by BIMCO’s idea “Banking days” are days on which banks are open both
in the country of the currency 11 stipulated for the Purchase
Price in Clause 1 and in the place of closing stipulated in Clause
8. 12 “In writing” or “written” means a
letter handed over from the Sellers to the Buyers or vice
versa, 13 a registered letter, telex, telefax or other modern
form of written communication. 14 “Classification
Society” or “Class” means the Society referred to in line
4. 15 1. Purchase Price USD 92,700,000
(ninety two million seven hundred thousand United States 16
Dollars) in
cash. 2. Deposit 17 As
security for the correct fulfilment of this Agreement the Buyers shall pay
a
deposit of 10% 18 (ten per cent) of the Purchase Price within
three (3) banking days from the date of this 19
Agreement. This deposit shall be placed with Den Norske Bank (DNB)
NOR, New York 20 and held by them in a joint account for the
Sellers and the Buyers, to be released in accordance 21 with
joint written instructions of the Sellers and the Buyers. Interest,
if any, to be credited to the 22 Buyers. Any fee
charged for holding the said deposit shall be borne equally by the Sellers
and
the 23
Buyers. 24 3. Payment 25 The
said Purchase Price shall be paid in full free of bank charges
to 26 OSG International Inc., C/O JP Morgan Chase Bank New York
ABA 021000021 Swift: CHASUS33 Account 232-1015113 on delivery of the
Vessel, but not later than 3 banking days after the Vessel is in every
respect 27 physically ready for delivery in accordance with the
terms and conditions of this Agreement and 28 Notice of
Readiness has been given in accordance with Clause
5. 29 4. Inspections 30 a)* The
Buyers 31 This document is a computer generated
SALEFORM 1993 form printed by authority of the Norwegian Shipbrokers’
Association. Any insertion or deletion to the form must be clearly
visible. In the event of any modification made to the pre-printed
text of this document which is not clearly visible, the text of the original
approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result
of discrepancies between the original approved document and this computer
generated document.
32
have accepted the Vessel based on an inspection report commissioned by OSG
Ship 33 Management Inc., carried out in Trieste, Italy during June
29-30, 2007 and the sale is outright and definite, subject only to the terms
and
conditions of this Agreement. 34 35 36 37 38 39 40 41 42 43 44
45 46 47 48 * 4 a) and 4b) are alternatives; delete
whichever is not applicable. In the absence of
deletions, 49 alternative 4a) to
apply. 50 5. Notices, time and place of
delivery 51 a) The Sellers shall keep the
Buyers well informed of the Vessel’s itinerary and shall 52 provide
the Buyers with 30, 20, 10, 5, 3 days, approximate, and 1 days definite notice
of the 53 estimated time of arrival at the intended place of underwater
inspection/delivery. When the Vessel is at the
place 54 of delivery and in every respect physically ready for
delivery in accordance with this 55 Agreement, the Sellers
shall give the Buyers a written Notice of Readiness for
delivery. 56 b) The Vessel shall be delivered
and taken over safely afloat at a safe and accessible berth
or 57 anchorage at/in US Gulf and Europe including
Turkey. 58 in the Sellers’
option. 59 Expected time of
delivery: Between 1st November 2007 and 20th December
2007 60 Date of cancelling (see Clauses 5 c), 6 b)
(iii) and 14): 21st December 2007 in Buyers 61
option. c) If the Sellers anticipate that, notwithstanding
the exercise of due diligence by them, the 62 Vessel will not
be ready for delivery by the cancelling date they may notify the Buyers
in 63 writing stating the date when they anticipate that the
Vessel will be ready for delivery and 64 propose a new
cancelling date. Upon receipt of such notification the Buyers shall
have the 65 option of either cancelling this Agreement in
accordance with Clause 14 within 7 running 66 days of receipt
of the notice or of accepting the new date as the new cancelling
date. If the 67 Buyers have not declared their
option within 7 running days of receipt of the Sellers’ 68
notification or if the Buyers accept the new date, the date proposed in the
Sellers’ notification 69 shall be deemed to be the new
cancelling date and shall be substituted for the cancelling 70
date stipulated in line 61. 71 If this Agreement is
maintained with the new cancelling date all other terms and
conditions 72 hereof including those contained in Clauses 5 a)
and 5 c) shall remain unaltered and in full 73 force and
effect. Cancellation or failure to cancel shall be entirely without
prejudice to any 74 claim for damages the Buyers may have under
Clause 14 for the Vessel not being ready by 75 the original
cancelling date. 76 d) Should the Vessel
become an actual, constructive or compromised total loss before
delivery 77 the deposit together with interest earned shall be
released immediately to the Buyers 78 whereafter this Agreement
shall be null and
void. 79 6. Drydocking/Divers
Inspection 80 81 82 83 This document is a computer
generated SALEFORM 1993 form printed by authority of the Norwegian Shipbrokers’
Association. Any insertion or deletion to the form must be clearly
visible. In the event of any modification made to the pre-printed
text of this document which is not clearly visible, the text of the original
approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result
of discrepancies between the original approved document and this computer
generated document.
84
85 86 87 b)** (i) The Vessel is to be delivered without
drydocking. However, the Buyers shall 88 have the
right at their expense to arrange for an underwater inspection by a diver
approved 89 by the Classification Society prior to the delivery
of the Vessel. The Sellers shall at their 90 cost make the
Vessel available for such inspection. The extent of the inspection
and the 91 conditions under which it is performed shall be to
the satisfaction of the Classification 92
Society. If the conditions at the port of delivery are unsuitable for
such inspection, the 93 Sellers shall make the Vessel available
at a suitable alternative place near to the delivery 94
port. 95. (ii) If the rudder, propeller,
bottom or other underwater parts below the deepest load line 96
are found broken, damaged or defective so as to affect the Vessel’s class, then
unless 97 repairs can be carried out afloat to the satisfaction
of the Classification Society and in the 98 event that the
Classification Society for such damage/s would impose a recommendation that
would require the vessel to be repaired promptly and prior to her scheduled
dry
dock then, the Sellers Shall arrange for the Vessel to be drydocked at their
expense for inspection by the 99 Classification Society of the
Vessel’s underwater parts below the deepest load line, the 100
extent of the inspection being in accordance with the Classification Society’s
rules. If the 101 rudder, propeller, bottom or other
underwater parts below the deepest load line are found 102
broken, damaged or defective so as to affect the Vessel’s class, such defects
shall be made 103 Good by the Sellers at their expense to the
satisfaction of the Classification Society 104 without
condition/recommendation*. In such event the Sellers are to pay
also for the cost of 105 the underwater inspection and the
Classification Society’s attendance. 106 If however,
in case of damage/s imposing a recommendation but the vessel is not
required 107 to be dry docked before her next scheduled dry
dock, then the vessel will not be dry docked/repaired but the Sellers shall
pay
to the Buyers the estimated cost to repair such damage/s in a way which is
acceptable to the Classification Society and which shall be the direct cost
of
the repair for such damage only (so excluding dry dock fees). This
amount to be based on the average of two quotations given by two reputable
independent repair yards in the delivery area as chosen and obtained one
by the
Sellers and one by the Buyers. The amount as agreed shall be deducted
from the balance of the purchase price at the time of
delivery. (iii) If the Vessel is to be drydocked pursuant
to Clause 6 b) (ii) and no suitable drydocking facilities are available at
the
port of delivery, the Sellers shall take the Vessel 108 to a
port where suitable drydocking facilities are available, whether within or
outside the 109 delivery range as per Clause 5
b). Once drydocking has taken place the Sellers shall
deliver 110 the Vessel at a port within the delivery range as
per Clause 5 b) which shall, for the 111 purpose of this
Clause, become the new port of delivery. In such event the cancelling
date 112 provided for in Clause 5 b)) shall be extended by the
additional time required for the 113 drydocking and extra
steaming, but limited to a maximum of 14 running
days. 114 c) If the Vessel is drydocked
pursuant to Clause 6 a) or 6 b)
above 115 (i) the Classification Society
may require survey of the tailshaft system, the extent of 116
the survey being to the satisfaction of the Classification
surveyor. If such survey is not 117 required by the
Classification Society, the Buyers shall have the right to require the
tailshaft 118 to be drawn and surveyed by the Classification
Society, the extent of the survey being in 119 accordance with
the Classification Society’s rules for tailshaft survey and consistent
with 120 the current stage of the Vessel’s survey
cycle. The Buyers shall declare whether they 121
require the tailshaft to be drawn and surveyed not later than by the completion
of the 122 inspection by the Classification
Society. The drawing and refitting of the tailshaft shall
be 123 arranged by the Sellers. Should any
parts of the tailshaft system be condemned or found 124
defective so as to affect the Vessel’s class, those parts shall be renewed or
made good at 125 the Sellers’ expense to the satisfaction of
the Classification Society without 126
condition/recommendation*. 127 (ii) the
expenses relating to the survey of the tailshaft system shall be
borne 128 by the Buyers unless the Classification Society
requires such survey to be carried out, in 129 which case the
Sellers shall pay these expenses. The Sellers shall also pay the
expenses 130 if the Buyers require the survey and parts of the
system are condemned or found defective 131 or broken so as to
affect the Vessel’s class*. 132 This document is a
computer generated SALEFORM 1993 form printed by authority of the Norwegian
Shipbrokers’ Association. Any insertion or deletion to the form must
be clearly visible. In the event of any modification made to the
pre-printed text of this document which is not clearly visible, the text
of the
original approved document shall apply. BIMCO and the Norwegian
Shipbrokers’ Association assume no responsibility for any loss, damage or
expense as a result of discrepancies between the original approved document
and
this computer generated document.
(iii) the
expenses in connection with putting the Vessel in and taking her out
of 133 drydock, including the drydock dues and the
Classification Society’s fees shall be paid by 134 the Sellers
if the Classification Society issues any condition/recommendation* as a
result 135 of the survey or if it requires survey of the
tailshaft system, in all other cases the Buyers 136 shall pay
the aforesaid expenses, dues and
fees. 137 (iv) the Buyers’ representative
shall have the right to be present in the drydock, but 138
without interfering with the work or decisions of the Classification
surveyor. 139 (v) the Buyer shall have
the right to have the underwater parts of the Vessel 140
cleaned and painted at their risk and expense without interfering with the
Sellers’ or the 141 Classification surveyor’s work, if any, and
without affecting the Vessel’s timely
delivery. If, 142 however, the Buyers’ work in
drydock is still in progress when the Sellers have 143
completed the work which the Sellers are required to do, the additional docking
time 144 needed to complete the Buyers’ work shall be for the
Buyers’ risk and expense. In the event 145 that the
Buyers’ work requires such additional time, the Sellers may upon completion of
the 146 Sellers’ work tender Notice of Readiness for delivery
whilst the Vessel is still in drydock 147 and the Buyers shall
be obliged to take delivery in accordance with Clause 3,
whether 148 the Vessel is in drydock or not and irrespective of
Clause 5 b). 149 * Notes, if any, the
surveyor’s report which are accepted by the Classification
Society 150 without condition/recommendation are not to be
taken into account. 151 ** 6 a) and 6 b)
are alternatives; delete whichever is not applicable. In the absence
of deletions, 152 alternative 6 a) to
apply. 153 7. Spares/bunkers,
etc. 154 The Sellers shall deliver the Vessel to the
Buyers with everything belonging to her on board and on 155
shore. All spare parts and spare equipment 156
belonging to the Vessel at the time of inspection used or 157
unused, whether on board or not shall become the Buyers’ property, but spares on
order are to be 158 excluded. Forwarding charges, if
any, shall be for the Buyers’ account. The Sellers are not required
to 159 replace spare parts which 160 are taken
out of spare and used as replacement prior to delivery, but the replaced
items
shall be the 161 property of the Buyers. The radio
installation and navigational equipment shall be included in the
sale 162 without extra payment. Unused stores and
provisions shall be 163 included in the sale and be taken over
by the Buyers without extra payment. 164 The Sellers
have the right to take ashore crockery, plates, cutlery, linen and other
articles bearing the 165 Sellers’ flag or name, provided they
replace same with similar unmarked items. Library, forms,
etc., 166 exclusively for use in the Sellers’ vessel(s), shall
be excluded without compensation. Captain’s, 167
Officers, and Crew’s personal belongings including the slop chest are to be
excluded from the sale, 168 as well as the following additional
items (including items on hire): Unitor Gas Bottles,
Crew 169 personal laptop computers and Sellers own/private
files but not Vessels records. 170 171 172 173
174 8. Documentation 175 The
place of closing: Istanbul, Turkey or any other place which mutually
agreed to be more practical 176 between the Sellers and the
Buyers. In exchange for payment of the Purchase Price the Sellers shall furnish
the Buyers with delivery 177 documents,
namely: 178 a) Legal Bill of Sale, in two
originals, 179 warranting that the Vessel is free from all
encumbrances, mortgages 180 and maritime liens or any other
debts or claims whatsoever, duly notarially attested and 181
legalized by the consul of Buyers’ country or apostilled by other competent
authority. 182 b) Current Certificate of
Ownership issued by the competent authorities of the flag state
of 183 the Vessel, evidencing that the vessel is owned by
the Sellers, dated the day of Sellers 184 tendering the Notice
of Readiness for delivery. This document is a computer generated
SALEFORM 1993 form printed by authority of the Norwegian Shipbrokers’
Association. Any insertion or deletion to the form must be clearly
visible. In the event of any modification made to the pre-printed
text of this document which is not clearly visible, the text of the original
approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a
result
of discrepancies between the original approved document and this computer
generated document.
c) Confirmation
of Class issued within 72 hours prior to
delivery. 185 d) Current Certificate of
encumberance issued by the competent authorities stating that
the 186 Vessel is free from registered encumbrances/mortgages,
dated the day of Sellers tendering the Notice of 187 Readiness
for delivery e) Certificate of Deletion of the Vessel from
the Vessel’s registry or other official evidence of 188
deletion appropriate to the Vessel’s registry at the time of delivery, or, in
the event that the 189 registry does not as a matter of
practice issue such documentation immediately, a written 190
undertaking by the Sellers to effect deletion from the Vessel’s registry
forthwith and furnish a 191 Certificate or other official
evidence of deletion to the Buyers promptly and latest within
1 192 (one) week after the Purchase Price has been paid and the
Vessel has been
delivered. 193 f) Notarized and
Apostilled copy of the Minutes of Meeting of the Board of Directors and
Shareholders of Sellers authorizing sale of the Vessel and appointing person
to
execute Bill of Sale and proceed with delivery formalities on the terms set
forth in this Agreement (the “MOA”). g) Power of Attorney
in favor of person(s) authorized to execute and deliver the Bill of Sale
and all
documents relevant to the sale and delivery of the
vessel. h) Good Standing Certificate of Sellers to be
issued by the Marshall Islands Registry dated not more than fifteen (15)
days
prior to the closing/delivery date. i) Copy of Sellers
Articles of Incorporation and Bye Laws. j) Certificate of Ownership
and Encumberance to be issued by the appropriate authorities, evidencing
Vessel
owned by the Sellers and free from all registered encumbrances and mortgages,
to
be dated on the delivery date and be issued and delivered to Buyers
simultaneously with payment of the purchase price. k) Commercial
invoice in triplicate marked ‘fully paid’ giving details of the vessel and the
full purchase price. l) Permission from the Marshall Islands
Authorities to transfer the vessel to the Buyer for re-registration under
the
Marshall Island flag. m) Any such additional documents as
may reasonably be required by the competent authorities 194 for
the purpose of registering the Vessel, provided the Buyers notify the Sellers
of
any such 195 documents as soon as possible after the date of
this Agreement. 196 (The certificates as per above
paragraph b) and d) will be in one document only) The Buyers or
Buyers shareholder shall furnish the Sellers with the following
documents: n) Minutes of the Meeting of the Board of
Directors of the Buyers authorizing purchase of the vessel as per the MOA
from
Sellers and appointing person(s) to execute the Protocol of Delivery and
Acceptance and all relevant documents and proceed with delivery formalities
to
be notorized by a Notary Public and Apostilled. o) Power
of Attorney of the Buyers, in favor of the Buyers empowering person(s) to
conduct all matters relating to the purchase of the Vessel on behalf of the
Buyers, including accept delivery of the Vessel from the Sellers and release
the
deposit and pay the balance of the purchase price and any other money payable
to
the Sellers, signing the Protocol of Delivery and Acceptance and attending
all
relevant matters, to be notarized by a Notary Public and
Apostilled. All above documents to be either in English or be
accompanied by a certified, true English translation. At the time of
delivery the Buyers and Sellers shall sign and deliver to each other a Protocol
of 197 Delivery and Acceptance confirming the transfer of the
title to the vessel and the place, date and time 198 of
delivery of the Vessel from the Sellers to the
Buyers. 199 At the time of delivery the Sellers
shall hand to the Buyers the classification certificate(s) as well as
all 200 plans etc., which are on board the
Vessel. Other certificates which are on board the Vessel shall
also 201 be handed over to the Buyers unless the Sellers are
required to retain same, in which case the 202 Buyers to have
the right to take copies. Other technical documentation which
may 203 be in the Sellers’ possession shall be promptly
forwarded to the Buyers at their expense, if they so 204
request. The Sellers may keep the Vessel’s log books but the Buyers
to have the right to take 205 This document is a
computer generated SALEFORM 1993 form printed by authority of the Norwegian
Shipbrokers’ Association. Any insertion or deletion to the form must
be clearly visible. In the event of any modification made to the
pre-printed text of this document which is not clearly visible, the text
of the
original approved document shall apply. BIMCO and the Norwegian
Shipbrokers’ Association assume no responsibility for any loss, damage or
expense as a result of discrepancies between the original approved document
and
this computer generated document.
copies
of
same. 206 9. Encumbrances 207
The Sellers warrant that the Vessel, at the time of delivery, is free from
all
charters, encumbrances, 208 mortgages and maritime liens or any
other debts whatsoever. The Sellers hereby undertake 209 to
indemnify the Buyers against all consequences of claims made against the
Vessel
which have 210 been incurred prior to the time of
delivery. 211 10. Taxes,
etc. 212 Any taxes, fees and expenses in connection with the
purchase and registration under the Buyers’ flag 213 shall be
for the Buyers’ account, whereas similar charges in connection with the closing
of the Sellers’ 214 register shall be for the Sellers’
account. 215 11. Condition on
delivery 216 The Vessel with everything belonging to
her shall be at the Sellers’ risk and expense until she is 217
delivered to the Buyers, but subject to the terms and conditions of this
Agreement she shall be 218 delivered and taken over as she was
at the time of inspection, fair wear and tear excepted. 219
However, the Vessel shall be delivered with her class maintained without
condition/recommendation*, 220 free of average damage affecting
the Vessel’s class, and with her classification certificates
and 221 national certificates, as well as all other
certificates the Vessel had at the time of inspection, valid
and 222 unextended without condition/recommendation* by Class
or the relevant authorities at the time of 223
delivery. 224 “Inspection” in this Clause 11, shall mean the
Buyers’ inspection according to Clause 4 a) or 4 b), if 225
applicable, or the Buyers’ inspection prior to the signing of this Agreement. If
the Vessel is taken over 226 without inspection, the date of
this Agreement shall be the relevant
date. 227 * Notes, if any, in the
surveyor’s report which are accepted by the Classification
Society 228 without condition/recommendation are not to be
taken into
account. 229 12. Name/markings 230 Upon
delivery the Buyers undertake to change the name of the Vessel and alter
funnel
markings. 231 13.Buyers’
default 232 Should the deposit not be paid in
accordance with Clause 2, the Sellers have the right to cancel
this 233 Agreement, and they shall be entitled to claim
compensation for their losses and for all expenses 234 incurred
together with interest. 235 Should the Purchase Price not be
paid in accordance with Clause 3, the Sellers have the right
to 236 cancel the Agreement, in which case the deposit together
with interest earned shall be released to the 237
Sellers. If the deposit does not cover their loss, the Sellers shall
be entitled to claim further 238 compensation for their losses
and for all expenses incurred together with
interest. 239 14. Sellers’
default 240 Should the Sellers fail to give Notice
of Readiness in accordance with Clause 5a or fail to be
ready 241 to validly complete a legal transfer by the date
stipulated in line 61 the Buyers shall have 242 the option of
cancelling this Agreement provided always that the Sellers shall be granted
a 243 maximum of 3 banking days after Notice of Readiness has
been given to make arrangements 244 for the documentation set
out in Clause 8. If after Notice of Readiness has been given but
before 245 the Buyers have taken delivery, the Vessel ceases to
be physically ready for delivery and is not 246 made physically
ready again in every respect by the date stipulated in line 61. and new
Notice
of 247 Readiness given, the Buyers shall retain their option to
cancel. In the event that the Buyers elect 248 to
cancel this Agreement the deposit together with interest earned shall be
released to them 249 immediately. 250 Should
the Sellers fail to give Notice of Readiness by the date stipulated in
line 61
or fail to be ready 251 to validly complete a legal transfer as
aforesaid they shall make due compensation to the Buyers
for 252 their loss and for all expenses together with interest
if their failure is due to proven 253 negligence and whether or
not the Buyers cancel this Agreement. 254
15. Buyers’ representatives 255 After this Agreement
has been signed by both parties and the deposit has been lodged, the
Buyers 256 This document is a computer generated
SALEFORM 1993 form printed by authority of the Norwegian Shipbrokers’
Association. Any insertion or deletion to the form must be clearly
visible. In the event of any modification made to the pre-printed
text of this document which is not clearly visible, the text of the original
approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as
a result
of discrepancies between the original approved document and this computer
generated document.
have
the right to place two representatives on board the Vessel at their sole risk
and expense 257 who can remain onboard until
Delivery. 258 These representatives are on board for the
purpose of familiarisation and in the capacity of 259 observers
only, and they shall not interfere in any respect with the operation of the
Vessel. The 260 Buyers’ representatives shall sign
the Sellers’ letter of indemnity prior to their embarkation. Buyers
have 261 the right to rotate their representatives as
practical. 16. Arbitration 262
a)* This Agreement shall be governed by and construed in accordance
with English law and 263 any dispute arising out of this
Agreement shall be referred to arbitration in London in 264
accordance with the Arbitration Acts 1950 and 1979 or any statutory modification
or 265 re-enactment thereof for the time being in force, one
arbitrator being appointed by each 266 party. On the
receipt by one party of the nomination in writing of the other party’s
arbitrator, 267 that party shall appoint their arbitrator
within fourteen days, failing which the decision of the 268
single arbitrator appointed shall apply. If two arbitrators properly appointed
shall not agree 269 they shall appoint an umpire whose decision
shall be final. 270 271 272 273 274 275 276 278 279 280
281 * 16 a) 16 b) and 16 c) are alternatives; delete
whichever is not applicable. In the absence of 282
deletions, alternative 16 a) to
apply. 283 17. Notices All
notices required to be given in accordance with this Agreement shall be in
writing, by fax or e-mail, and shall be addressed to the following with copy
to
the Broker: To the
Sellers: Copyright: Norwegian Shipbrokers’ Association,
Oslo, Norway. Mr. Marc La Monte C/O OSG Ship Mgt., Inc. 666 3rd
Avenue New York, N.Y. 10017, USA Tel: 212 578 1812 Fax: 212 578 1991
Email: osgs&p@osg.com To the Buyers: Double Hull
Tankers Inc. 26 New Street St Helier Jersey, Channel Islands OJ
Diesen Tel (47) 908 31012 Email: ojdiesen@dhtankers.je Or Eirik Uboe
Tel (47) 41292712 Email: eu@tankersservices.com This document is a
computer generated SALEFORM 1993 form printed by authority of the Norwegian
Shipbrokers’ Association. Any insertion or deletion to the form must
be clearly visible. In the event of any modification made to the
pre-printed text of this document which is not clearly visible, the text of
the
original approved document shall apply. BIMCO and the Norwegian
Shipbrokers’ Association assume no responsibility for any loss, damage or
expense as a result of discrepancies between the original approved document
and
this computer generated document.
This
agreement has been issued in two (2) originals, one for the Sellers and one
for
the Buyers and shall not be binding unless and until signed by both parties
via
fax or e-mail. THE SELLERS First Suezmax Tanker
Corporation By: /s/ James I.
Edelson James I.
Edelson Vice
President THE BUYERS /s/ O. J. Diesen OLE Jacob Diesen
CEO This document is a computer generated SALEFORM 1993 form printed
by authority of the Norwegian Shipbrokers’ Association. Any insertion
or deletion to the form must be clearly visible. In the event of any
modification made to the pre-printed text of this document which is not clearly
visible, the text of the original approved document shall
apply. BIMCO and the Norwegian Shipbrokers’ Association assume no
responsibility for any loss, damage or expense as a result of discrepancies
between the original approved document and this computer generated
document.
Exhibit
10.3.2
MEMORANDUM OF AGREEMENT Dated: 28th August 2007 Dignity Tanker Corporation hereinafter called the Sellers, have agreed to sell, and 1 Double Hull Tankers Inc., or Nominee hereinafter called the Buyers, have agreed to buy 2 Name: Ottoman Dignity 3 Classification Society/Class: Det Norske Veritas (DNV) 4 Built: 20 November 2000 By: Hyundai Heavy Industries, Ulsan, Korea 5 Flag: Marshall Island Place of Registration: Marshall Islands 6 Call Sign: TCMQ Grt/Nrt: 79,751/48,804 7 IMO Number: 9198666 8 hereinafter called the Vessel, on the following terms and conditions: 9 Definitions 10 “Banking days” are days on which banks are open both in the 11 United States, Turkey , Germany, Switzerland and United Kingdom. 12 “In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, 13 a registered letter, e-mail, telefax or other modern form of written communication. 14 “Classification Society” or “Class” means the Society referred to in line 4. 15 1. Purchase Price 16 USD 90,330,000.00 (United States Dollars Ninety Million Three Hundred Thirty Thousand) cash on delivery, without any deductions into Sellers’ nominated bank. 2. Deposit 17 As security for the correct fulfillment of this Agreement the Buyers shall pay a deposit of 10% 18 (ten percent) of the Purchase Price within 3 (three) banking days from the time that this Agreement has been 19 signed by both parties on fax/e-mail exchanges – or from when the escrow account is opened, whichever 19 is later. 19 This deposit shall be placed with [TBA] 20 and held by them in a joint interest bearing account for the Sellers and the Buyers, to be released in accordance 21 with joint written instructions of the Sellers and the Buyers. Interest, if any, to be credited to the 22 Buyers. Any fee charged for holding the said deposit shall be borne equally by the Sellers and the 23 Buyers. 24 3. Payment 25 The said Purchase Price shall be paid in full free of bank charges to [TBA] 26 on delivery of the Vessel, but not later than 3 banking days after the Vessel is in every respect 27
MEMORANDUM
OF AGREEMENTDated: 28th August 2007Dignity Tanker Corporation hereinafter
called
the Sellers, have agreed to sell, and le Hull Tankers Inc., or Nominee
hereinafter called the Buyers, have agreed to buy 2Name: Ottoman
Dignity 3Classification Society/Class: Det
physically
ready for delivery in accordance with the terms and conditions of this Agreement
and 28 Notice of Readiness has been given in accordance with Clause
5. 29 4. Inspections 30 a)* The
Buyers 31 have accepted the Vessel based on an inspection report
commissioned by OSG Ship 31 Management Inc., carried out at Savona,
Italy on August 6-7, 2007 32 and the sale is outright and
definite, 33 subject only to the terms and conditions of this
Agreement. 34 5. Notices, time and place of
delivery 51 a) The Sellers shall keep the
Buyers well informed of the Vessel’s itinerary and shall 52 provide
the Buyers with 30, 21, 14, 7 and 5 days approximate notice of the expected
date
of the 53 vessel’s arrival at the 53 intended place of
delivery and 3, 2, 1 days definite notices of the 54 date Sellers
expect the vessel to be ready for delivery. When the Vessel is at the
place 54 of delivery and in every respect physically ready for
delivery in accordance with this 55 Agreement, the Sellers shall give
the Buyers a written Notice of Readiness for
delivery. 56 b) The Vessel shall be delivered
and taken over charter free, free of cargo, safely afloat at a
safe 57 and accessible berth or 57 anchorage in United
Kingdom Continent or Mediterranean Port 58 in the Sellers’
option. 59 Expected time of delivery: Between
December 15, 2007 and February 7, 2008 in Sellers’
option. 60 Date of canceling (see Clauses 5 c), 6 b) (iii)
and 14): February 7, 2008 in Buyers’
option. 61 c) If the sellers anticipate that,
notwithstanding the exercise of due diligence by them, the 62 Vessel
will not be ready for delivery by the canceling date they may notify the Buyers
in 63 writing stating the date when they anticipate that the Vessel
will be ready for delivery and 64 propose a new canceling date. Upon
receipt of such notification the Buyers shall have the 65 option of
either canceling this Agreement in accordance with Clause 14 within 7
running 66 days of receipt of the notice or of accepting the new date
as the new canceling date. If the 67
Buyers
have not declared their option within 7 running days of receipt of the
Sellers’ 68 notification or if the Buyers accept the new date, the
date proposed in the Sellers’ 69 notification shall be deemed to be
the new canceling date and shall be substituted for the canceling 70
date stipulated in line 61. 71 If this Agreement is
maintained with the new canceling date all other terms and
conditions 72 hereof including those contained in Clauses 5 a) and 5
c) shall remain unaltered and in full 73 force and effect.
Cancellation or failure to cancel shall be entirely without prejudice to
any 74 claim for damages the Buyers may have under Clause 14 for the
Vessel not being ready by 75 the original canceling
date. 76 d) Should the Vessel become an actual,
constructive or compromised total loss before delivery 77 the deposit
together with interest earned shall be released immediately to the
Buyers 78 whereafter this Agreement shall be null and
void. 79 6. Drydocking/Divers
Inspection 80 b)** (i) The Vessel is
to be delivered without drydocking. However, the Buyers shall 88 have
the right at their expense to arrange for an underwater inspection by a diver
approved 89 by the Classification Society prior to the delivery of the Vessel.
The Sellers shall at their 90 cost make the Vessel available for such
inspection. The extent of the inspection and the 91 conditions under
which it is performed shall be to the satisfaction of the
Classification 92 Society. If the conditions at the port of delivery
are unsuitable for such inspection, the 93 Sellers shall make the
Vessel available at a suitable alternative place near to the
delivery 94 port. 95 (ii) If the
rudder, propeller, bottom or other underwater parts below the deepest load
line 96 are found broken, damaged or defective so as to affect the
Vessel’s class, then unless 97 repairs can be carried out afloat to
the satisfaction of the Classification Society, the Sellers 98 shall arrange
for
the Vessel to be drydocked at their expense for inspection by the 99
Classification Society of the Vessel’s underwater parts below the deepest load
line, the 100 extent of the inspection being in accordance with the
Classification Society’s rules. If the 101 rudder, propeller, bottom
or other underwater parts below the deepest load line are found 102
broken, damaged or defective so as to affect the Vessel’s class, such defects
shall be made 103 good by the Sellers at their expense to the
satisfaction of the Classification Society 104 without
condition/recommendation*. In such event the Sellers are to pay also for the
cost of 105 the underwater inspection and the Classification
Society’s attendance. 106 (iii) If the Vessel
is to be drydocked pursuant to Clause 6 b) (ii) and no suitable dry- 107 docking
facilities are available at the port of delivery, the Sellers shall take the
Vessel 108 to a port where suitable drydocking facilities are
available, whether within or outside the 109 delivery range as per
Clause 5 b). Once drydocking has taken place the Sellers shall
deliver 110 the Vessel at a port within the delivery range as per
Clause 5 b) which shall, for the 111 purpose of this Clause, become
the new port of delivery. In such event the canceling date 112
provided for in Clause 5 b) shall be extended by the additional time required
for the 113 drydocking and extra steaming, but limited to a maximum
of 14 running days. 114 c) If the Vessel is
drydocked pursuant to Clause 6 a) or 6 b) above. 115
(i) the
Classification Society may require survey of the tailshaft system, the extent
of 116 the survey being to the satisfaction of the Classification
surveyor. If such survey is not 117 required by the Classification
Society, the Buyers shall have the right to require the tailshaft 118
to be drawn and surveyed by the Classification Society, the extent of the survey
being in 119 accordance with the Classification Society’s rules for
tailshaft survey and consistent with 120 the current stage of the
Vessel’s survey cycle. The Buyers shall declare whether they 121
require the tailshaft to be drawn and surveyed not later than by the completion
of the 122 inspection by the Classification Society. The drawing and
refitting of the tailshaft shall be 123 arranged by the Sellers.
Should any parts of the tailshaft system be condemned or found 124
defective so as to affect the Vessel’s class, those parts shall be renewed or
made good at 125 the Sellers’ expense to the satisfaction of the
Classification Society without 126
condition/recommendation*. 127 (ii) the
expenses relating to the survey of the tailshaft system shall be
borne 128 by the Buyers unless the Classification Society requires
such survey to be carried out, in 129 which case the Sellers shall
pay these expenses. The Sellers shall also pay the expenses 130 if
the Buyers require the survey and parts of the system are condemned or found
defective 131 or broken so as to affect the Vessel’s
class*. 132 (iii) the expenses in connection
with putting the Vessel in and taking her out of 133 drydock,
including the drydock dues and the Classification Society’s fees shall be paid
by 134 the Sellers if the Classification Society issues any
condition/recommendation* as a result 135 of the survey or if it
requires survey of the tailshaft system. In all other cases the
Buyers 136 shall pay the aforesaid expenses, dues and
fees. 137 (iv) the Buyers’ representative shall
have the right to be present in the drydock, but 138 without
interfering with the work or decisions of the Classification
surveyor. 139 (v) the buyers shall have the
right to have the underwater parts of the Vessel 140 cleaned and
painted at their risk and expense without interfering with the Sellers’ or
the 141 Classification surveyor’s work, if any, and without affecting
the Vessel’s timely delivery. If, 142 however, the Buyers’ work in
drydock is still in progress when the Sellers have 143 completed the
work which the Sellers are required to do, the additional docking
time 144 needed to complete the Buyers’ work shall be for the Buyers’
risk and expense. In the event 145 that the Buyers’ work requires
such additional time, the Sellers may upon completion of the 146
Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still
in drydock 147 and the Buyers shall be obliged to take delivery in
accordance with Clause 3, whether 148 the Vessel is in drydock or not
and irrespective of Clause 5 b). 149 * Notes,
if any, in the surveyor’s report which are accepted by the Classification
Society 150 without condition/recommendation are not to be taken into
account. 151 153 7. Spares/bunkers,
etc. 154 The Sellers shall deliver the Vessel to the
Buyers with everything belonging to her included in the sale, on 155
board and on 155 shore and on order at the time of physical
inspection. All spare parts and spare equipment including 156 spare
tail-end shaft(s) and/or spare 156 propeller(s)/propeller blade(s),
belonging to the Vessel at the time of inspection used or 157 unused,
whether on board or not shall become the Buyers’ property. 158
Forwarding charges, if any, shall be for the Buyers’ account. The Sellers are
not required to 159 replace spare parts including spare tail-end
shaft(s) and spare propeller(s)/propeller blade(s) which 160 are
taken out of spare and used as replacement prior to delivery, but the replaced
items shall be the 161 property of the Buyers. The radio installation
and navigational equipment shall be included in the sale 162 without
extra payment if they are the property of the Sellers. Broached/unbroached
stores and 163
provisions
shall be 163 included in the sale and be taken over by the Buyers
without extra payment. 164 The Sellers have the right to
take ashore crockery, plates, cutlery, linen and other articles
bearing 165 the Sellers’ flag or name, provided they replace same
with similar unmarked items. Library, forms, etc. 166 exclusively for
use in the Sellers’ vessel(s), shall be excluded without compensation,
Captain’s, 167 Officers’ and Crew’s personal belongings including the
slop chest are to be excluded from the sale, 168 as well as the
following additional items (including items on
hire): 169 [TBA] 8. Documentation 175 The
place of closing: [TBA] 176 In exchange for payment of the
Purchase Price the Sellers shall furnish the Buyers with delivery 177
documents, set forth in Exhibit A to this
Agreement. 178 At the time of delivery the Buyers and
Sellers shall sign and deliver to each other a Protocol of 197
Delivery and Acceptance confirming the date and time of delivery of the Vessel
from the 198 Sellers to the Buyers. 199 At the
time of delivery the Sellers shall hand to the Buyers the classification
certificate(s) as well as all 200 plans, etc., which are on board the
Vessel. Other certificates which are on board the Vessel shall
also 201 be handed over to the Buyers unless the Sellers are required
to retain same, in which case the 202 Buyers to have the right to
take copies. Other technical documentation including plans,
instruction 203 Books and manuals which are, to the best of
Sellers’/Managers’ knowledge in English which may 203
be
in the Sellers’ possession shall be promptly forwarded to the Buyers at their
expense, if they so 204 request. The Sellers may keep the Vessel’s
log books but the Buyers to have the right to take 205 copies of
same. 206 9. Encumbrances 207 The
Sellers warrant that the Vessel, at the time of delivery, is free from all
charters, encumbrances, 208 mortgages and maritime liens or any other
debts whatsoever. The Sellers hereby undertake 209 to indemnify the
Buyers against all consequences of claims made against the Vessel which have
210
been incurred prior to the time of
delivery. 211 10. Taxes,
etc. 212 Any taxes, fees and expenses in connection with
the purchase and registration under the Buyers’ flag 213 shall be for
the Buyers’ account, whereas similar charges in connection with the closing of
the Sellers’ 214 register shall be for the Sellers’
account. 215 11. Condition on
delivery 216 The Vessel with everything belonging to her
shall be at the Sellers’ risk and expense until she is 217 delivered
to the Buyers, but subject to the terms and conditions of this Agreement she
shall be 218 delivered and taken over in substantially the same condition as
she
was at the time of inspection, 219 fair wear and tear
excepted. 219 However, the Vessel shall be delivered with
her class fully maintained without condition/recommendation*, 220
free of average damage affecting the Vessel’s class, and with her classification
certificates, 221 as well as all other certificates the Vessel had at
the time of inspection, clean, valid and 222 unextended without
condition/recommendation* by Class or the relevant authorities for a minimum
of
6 (six) 223 months after the date of delivery. All continuous survey
cycles to be fully up to date at the time of 223
delivery. 224 “Inspection” in this Clause 11, shall mean
the Buyers’ inspection according to Clause 4a) or 4b), if 225
applicable, or the Buyers’ inspection prior to the signing of this
Agreement. 226 * Notes, if any, in the surveyor’s report
which are accepted by the Classification Society 228 without
condition/recommendation are not to be taken into account.
229 12. Name/markings 230 Upon
delivery the Buyers undertake to change the name of the Vessel and alter funnel
markings. 231 13. Buyers’
default 232 Should the deposit not be paid in accordance
with Clause 2, the Sellers have the right to cancel this 233
Agreement, and they shall be entitled to claim compensation for their losses
and
for all expenses 234 incurred together with 8% (eight percent)
interest. 235 Should the Purchase Price not be paid in accordance
with Clause 3, the Sellers have the right to 236 cancel the
Agreement, in which case the deposit together with interest earned shall be
released to the 237 Sellers. If the deposit does not cover their loss, the
Sellers shall be entitled to claim further 238 compensation for their
losses and for all expenses incurred together with 8% (eight percent)
interest. 239 14. Sellers’
default 240
Should
the Sellers fail to give Notice of Readiness in accordance with Clause 5 a)
or
fail to be ready 241 to validly complete a legal transfer by the date
stipulated in line 61 the Buyers shall have 242 the option of
canceling this Agreement provided always that the Sellers shall be granted
a 243 maximum of 3 banking days after Notice of Readiness has been
given to make arrangements 244 for the documentation set out in
Clause 8. If after Notice of Readiness has been given but before 245
the Buyers have taken delivery, the Vessel ceases to be physically ready for
delivery and is not 246 made physically ready again in every respect
by the date stipulated in line 61 and new Notice of 247 Readiness
given, the Buyers shall retain their option to cancel. In the event that the
Buyers elect 248 to cancel this Agreement the deposit together with
interest earned shall be released to them 249
immediately. 250 Should the Sellers fail to give Notice of
Readiness by the date stipulated in line 61 or fail to be ready 251
to validly complete a legal transfer as aforesaid they shall make due
compensation to the Buyers for 252 their loss and for all expenses
together with interest if their failure is due to proven 253
negligence and whether or not the Buyers cancel this
Agreement. 254 15. Buyers’
representatives 255 After this Agreement has been signed
by both parties and the deposit has been lodged, the Buyers 256 have
the right to place two representatives on board the Vessel at their sole risk
and expense upon 257 arrival at a mutually convenient place earliest
45 (forty-five) days prior to the intended delivery date. 258 258
These representatives are on board at Buyers’ risk and expense for the purpose
of familiarization and in 259 the capacity of 259
observers only, and they shall not interfere in any respect with the operation
of the Vessel. The 260 Buyers’ representatives shall sign the
Sellers’ letter of indemnity prior to their
embarkation. 261 16. Arbitration 262 a)* This
Agreement shall be governed by and construed in accordance with English law
and
263 any dispute arising out of this Agreement shall be referred to arbitration
in London in 264 accordance with the Arbitration Acts 1950 and 1979
or any statutory modification or 265 re-enactment thereof for the time being
in
force, one arbitrator being appointed by each 266 party. On the
receipt by one party of the nomination in writing of the other party’s
arbitrator, 267 that party shall appoint their arbitrator within
fourteen days, failing which the decision of the 268 single
arbitrator appointed shall apply. If two arbitrators properly appointed shall
not agree 269 they shall appoint an umpire whose decision shall be
final. 270 * 16 a), 16 b) and 16 c) are
alternatives, delete whichever is not applicable. In the absence
of 282 deletions, alternative 16 a) to
apply. 283 Clauses 17 to 19 and Exhibit A inclusive are
deemed incorporated and considered an integral part of this
Agreement.
Clause
17 This Agreement or any interest herein may not be assigned by
either party without the prior written consent of the other. Any assignment
by
either of the parties hereto in violation of the foregoing sentence shall be
void. This Agreement may not be modified in any respect except in writing signed
by both parties and shall be binding upon and shall insure to the benefit of
the
parties hereto and their respective successors and assigns. Clause
18 If the Buyers shall be unable to accept delivery of the Vessel due
to outbreak of war, restraint of Government, princes or people or other reasons
that may be brought about by force majeure, Buyers may terminate this Agreement
without liability upon either party and in such event the deposit referred
to in
Clause 2. of this Agreement shall be released and returned forthwith in full
to
the Buyers together with interest. If the Sellers shall not be able
to deliver the Vessel due to outbreak of war, restraint of Government, princes
or people or other reasons that may be brought about by force majeure, Sellers
may terminate this Agreement without liability upon either party and in such
event the deposit referred to in Clause 2. of this Agreement shall be released
and returned forthwith in full to the Buyers together with
interest. Clause 19 The parties hereto agree that the
price, terms, and conditions of this Agreement will not be disclosed until
it
may be otherwise mutually agreed, unless such disclosure is required to be
made
in order to comply with any law, regulation, order or process binding on either
of the parties or their respective parents, subsidiaries, agents, directors,
officers or legal or accounting advisors. Should, however, details of
the sale become known or reported in the market, neither the Buyers nor the
Sellers shall have the right to withdraw from the sale or fail to fulfill their
obligations under this Agreement. On behalf of the Sellers: /s/ Mark
Lamonte Name: Mark Lamonte Title: Vice President On behalf
of the Buyers: Name: Title.
EXHIBIT
A List of documents to be provided by the Sellers 1. Bill
of Sale (3 originals) in a form acceptable to the Marshall Islands Maritime
Authority warranting that the Vessel is free from all encumbrances, mortgages
and maritime liens or any other debts or claims whatsoever, duly
notarised; 2. Resolutions or other evidence from the Owners of the
Vessel authorising the sale of the Vessel and the Memorandum of Agreement
between the Sellers and the Buyers and inter alia appointing relevant attorneys
to attend the closing meeting and the physical delivery of the Vessel and to
sign all relevant documentation including, but not limited to, the Bill of
Sale,
the Protocol of Delivery and Acceptance and the deposit release
letter. 3. Sellers’ Power of Attorney empowering the attorneys to
attend the closing meeting and the physical delivery of the Vessel and to sign
all relevant documentation including, but not limited to, the Bill of Sale,
the
Protocol of Delivery and Acceptance and the deposit release letter duly
notarized; 4. Extract from the public commercial registry for the
Vessel; 5. Copy of Sellers’ Articles of Incorporation and By Laws and
Incumbency Certificate; 6. Certificate of Ownership and Encumbrances
issued by the appropriate authorities showing that the Vessel is owned by the
Sellers and is free of any registered encumbrances dated the date of
closing; 7. A certificate of deletion from the Vessel’s current
registry and Marshall Islands permission to transfer of the Vessel to the Buyers
for re-registration under Marshall Islands flag or Buyers nominated
flag; 8. Confirmation of class issued within 3 business days prior to
delivery showing that the Vessel is in class free of any recommendations and
fit
to proceed to sea; 9. Copies of all national and international
trading/classification certificates; 10. Commercial Invoice for the
Vessel marked “fully paid”; 11. Protocol of Delivery and
Acceptance;
12.
Letter of Undertaking that immediately following payment of the purchase
money,
Sellers will instruct their representative on board to physically deliver
the
Vessel to the Buyers; 13. All other documents reasonably required by
the Buyers for registration purposes provided that such requirement is
communicated within fifteen days prior to the Vessel’s intended date of
delivery. Buyers to make best efforts to provide the list of the required
documents as early as possible. [TBA] 14. Certificate of Good
Standing of Sellers issued by the appropriate authorities. The Buyers
or Buyers’ shareholder shall furnish the Sellers with the following
documents: 15. Minutes of the Meeting of the Board of Directors of
the Buyers or the Buyers’ shareholders authorising purchase of the Vessel as per
the MOA from Sellers appointing person(s) to execute the Protocol of Delivery
and Acceptance and all relevant documents and proceed with delivery formalities
to be notarized by a Notary Public and Apostiled. 16. Power of
Attorney of the Buyers or the Buyers’ shareholders, in favour of the Buyers
empowering person(s) to conduct all matters relating to the purchase of the
Vessel on behalf of the Buyers, including accept delivery of the Vessel from
the
Sellers and release the deposit and pay the balance of the purchase price
and
any other money payable to the Sellers, signing the Protocol of Delivery
and
Acceptance and attending all relevant matters, to be notarized by a Notary
Public and Apostiled.
Exhibit
12.1
| Ratio of earnings to fixed charges | |||||||||||||
|
Successor
|
Predecessor
|
||||||||||||
|
Period
|
6
months ended
|
Year
ended
|
Oct. 18 to |
Jan.
1 to
|
Year
ended
|
Year
ended
|
Year
ended
|
||||||
|
($000)
|
June
30, 2007
|
Dec.
31, 2006
|
Dec.
31, 2005
|
Oct.
17, 2005
|
Dec.
31, 2004
|
Dec.
31, 2003
|
Dec.
31, 2002
|
||||||
|
Earnings:
|
|||||||||||||
|
Net
Income
|
7,418
|
|
35,750
|
9,469
|
43,641
|
86,690
|
29,431
|
-4,763
|
|||||
|
+Fixed
Charges
|
3,495
|
13,957
|
|
2,872
|
3,596
|
8,645
|
5,933
|
7,781
|
|||||
|
Total
Earnings
|
10,913
|
49,707
|
12,341
|
47,237
|
95,335
|
35,364
|
3,018
|
||||||
|
Fixed
Charges:
|
|||||||||||||
|
Interest
incl. amortization of debt issuance cost
|
3,495
|
13,957
|
2,872
|
3,596
|
8,645
|
5,933
|
7,781
|
||||||
|
Total
Fixed Charges
|
3,495
|
13,957
|
2,872
|
3,596
|
8,645
|
5,933
|
7,781
|
||||||
|
Ratio
of Earnings to Fixed Charges
|
3.12
|
3.56
|
4.30
|
13.14
|
11.03
|
5.96
|
*
|
||||||
|
*For
the year ended December 31, 2002, earnings were insufficient to
cover
fixed charges by $4.8 million.
|
|||||||||||||
Exhibit
21.1
Subsidiaries
of Double Hull Tankers, Inc.
|
Name
|
Jurisdiction
|
|
Ania
Aframax Corporation
|
Marshall
Islands
|
|
Ann
Tanker Corporation
|
Marshall
Islands
|
|
Cathy
Tanker Corporation
|
Marshall
Islands
|
|
Chris
Tanker Corporation
|
Marshall
Islands
|
|
London
Tanker Corporation
|
Marshall
Islands
|
|
Newcastle
Tanker Corporation
|
Marshall
Islands
|
|
Rebecca
Tanker Corporation
|
Marshall
Islands
|
|
Regal
Unity Corporation
|
Marshall
Islands
|
|
Sophie
Tanker Corporation
|
Marshall
Islands
|
Exhibit
23.1
Consent
of Independent Registered Public Accounting Firm
We
consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form F-3 No. 333-_________)
and related Prospectus of Double Hull Tankers, Inc. for the registration
of up to $200,000,000 of its securities and to the incorporation by reference
therein of our reports dated March 15, 2007 and March 31, 2006, with respect
to
the consolidated financial statements of Double Hull Tankers Inc. and its
predecessor OSG Crude included in
Double Hull Tankers
Inc's Annual Report (Form 20-F) for the year ended
December 31, 2006, filed with the Securities and Exchange
Commission.
/s/
Ernst & Young
LLP
New
York,
New York
October
23, 2007