Exhibit 10.6.2

 

DIRECTOR AND OFFICER INDEMNITY AGREEMENT

 

This agreement (the “Agreement”) is made and entered into as of the 20th day of
January, 2009, by and between OSG America L.P., a Delaware limited partnership
(the “Partnership”), and Henry P. Flinter, (the “Indemnitee”).

 

RECITALS

 

A.                                   The Indemnitee is a Director OSG America
LLC, a Delaware limited liability company and the general partner of the
Partnership (the “General Partner”).

 

B.                                     Both the Partnership and the Indemnitee
recognize the increased risk of litigation and other claims being asserted
against directors and officers of public entities in today’s environment.

 

C.                                     Section 17-108 of the Delaware Revised
Uniform Limited Partnership Act, 6 Del. C. Section 17-101, et seq., (the “Act”)
expressly recognizes that, subject to such standards and restrictions as may be
set forth in its partnership agreement, a limited partnership may, and shall
have the power to, indemnify and hold harmless any person from and against any
and all claims and demands whatsoever.

 

D.                                    Subject to the limitations set forth
therein, Section 7.07 of the Amended and Restated Agreement of Limited
Partnership of the Partnership (the “Partnership Agreement”) requires the
Partnership to indemnify and advance expenses to the directors and officers of
the General Partner to the fullest extent permitted by law and the Indemnitee
has been serving and continues to serve as a Director of the General Partner in
part in reliance on such provision.

 

E.                                      In recognition of the Indemnitee’s need
for substantial protection against any potential personal liability in order to
assure the Indemnitee’s continued service to the Partnership and General Partner
in an effective manner and the Indemnitee’s reliance on the provisions of the
Partnership Agreement and in part to provide the Indemnitee with specific
contractual assurance that the protection promised by the Partnership Agreement
will be available to the Indemnitee, the Partnership wishes to provide in this
Agreement for the indemnification of and the advancing of expenses to the
Indemnitee to the fullest extent (whether partial or complete) permitted by the
Partnership Agreement and as set forth in this Agreement, and, to the extent
insurance is maintained, for the continued coverage of the Indemnitee under the
Partnership’s directors’ and officers’ liability insurance policies.

 

In consideration of the foregoing and the mutual covenants contained herein, and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto agree as follows:

 

1.                                       CERTAIN DEFINITIONS.

 

(A)                                  “AFFILIATE” MEANS, WITH RESPECT TO ANY
PERSON, ANY OTHER PERSON THAT DIRECTLY OR INDIRECTLY THROUGH ONE OR MORE
INTERMEDIARIES CONTROLS, IS CONTROLLED BY OR IS UNDER

 

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COMMON CONTROL WITH, SUCH PERSON. AS USED HEREIN, THE TERM “CONTROL” MEANS THE
POSSESSION, DIRECT OR INDIRECT, OF THE POWER TO DIRECT OR CAUSE THE DIRECTION OF
THE MANAGEMENT AND POLICIES OF A PERSON, WHETHER THROUGH OWNERSHIP OF VOTING
SECURITIES, BY CONTRACT OR OTHERWISE.

 

(B)                                 “BOARD OF DIRECTORS” MEANS THE BOARD OF
DIRECTORS OF THE GENERAL PARTNER.

 

(C)                                  “CHANGE IN CONTROL” MEANS, AND SHALL BE
DEEMED TO HAVE OCCURRED UPON ONE OR MORE OF THE FOLLOWING EVENTS: (I) ANY
TRANSACTION RESULTING IN THE PARTNERSHIP (OR ITS SUCCESSOR OR SURVIVOR BY WAY OF
MERGER, CONSOLIDATION, OR SOME OTHER TRANSACTION, OR A PARENT OR SUBSIDIARY
THEREOF) CEASING TO BE AN AFFILIATE OF OSG (OR ITS SUCCESSOR OR SURVIVOR BY WAY
OF MERGER, CONSOLIDATION, OR SOME OTHER TRANSACTION, OR A PARENT OR SUBSIDIARY
THEREOF); (II) THE LIMITED PARTNERS OF THE PARTNERSHIP APPROVE, IN ONE
TRANSACTION OR A SERIES OF TRANSACTIONS, A PLAN OF COMPLETE LIQUIDATION OF THE
PARTNERSHIP; (III) THE SALE OR OTHER DISPOSITION BY EITHER THE GENERAL PARTNER
OR THE PARTNERSHIP OF ALL OR SUBSTANTIALLY ALL OF ITS ASSETS, OR THE SALE OR
OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE PARTNERSHIP’S
SUBSIDIARIES, IN ONE OR MORE TRANSACTIONS TO ANY PERSON OTHER THAN THE GENERAL
PARTNER OR AN AFFILIATE OF THE GENERAL PARTNER; OR (IV) A TRANSACTION RESULTING
IN A PERSON OTHER THAN OSG (OR ITS SUCCESSOR OR SURVIVOR BY WAY OF MERGER,
CONSOLIDATION, OR SOME OTHER TRANSACTION, OR A PARENT OR SUBSIDIARY THEREOF) OR
AN AFFILIATE THEREOF BEING THE GENERAL PARTNER OF THE PARTNERSHIP (OR ITS
SUCCESSOR OR SURVIVOR BY WAY OF MERGER, CONSOLIDATION, OR SOME OTHER
TRANSACTION, OR A PARENT OR SUBSIDIARY THEREOF).

 

(D)                                 “EXPENSES” MEANS ALL DIRECT AND INDIRECT
COSTS OF ANY TYPE OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, ALL
ATTORNEYS’ FEES AND RELATED DISBURSEMENTS AND OTHER OUT-OF- POCKET COSTS)
ACTUALLY AND REASONABLY INCURRED BY THE INDEMNITEE IN CONNECTION WITH THE
INVESTIGATION, DEFENSE OR APPEAL OF OR BEING A WITNESS IN, PARTICIPATING IN OR
PREPARING TO DEFEND A PROCEEDING OR ESTABLISHING OR ENFORCING A RIGHT TO
(I) INDEMNIFICATION OR ADVANCEMENT OF EXPENSES UNDER THIS AGREEMENT, THE
PARTNERSHIP AGREEMENT, THE ACT OR OTHERWISE OR (II) DIRECTORS’ AND OFFICERS’
LIABILITY INSURANCE COVERAGE; PROVIDED, HOWEVER, THAT EXPENSES SHALL NOT INCLUDE
ANY JUDGMENTS, FINES OR PENALTIES OR AMOUNTS PAID IN SETTLEMENT OF A
PROCEEDING.  SHOULD ANY PAYMENTS BY THE PARTNERSHIP UNDER THIS AGREEMENT BE
DETERMINED TO BE SUBJECT TO ANY FEDERAL, STATE OR LOCAL INCOME OR EXCISE TAX,
“EXPENSES” SHALL ALSO INCLUDE SUCH AMOUNTS AS ARE NECESSARY TO PLACE THE
INDEMNITEE IN THE SAME AFTER-TAX POSITION (AFTER GIVING EFFECT TO ALL APPLICABLE
TAXES) AS THE INDEMNITEE WOULD HAVE BEEN IN HAD NO SUCH TAX BEEN DETERMINED TO
APPLY TO SUCH PAYMENTS.

 

(E)                                  “INDEMNIFIABLE EVENT” IS ANY EVENT OR
OCCURRENCE RELATED TO THE FACT THAT THE INDEMNITEE IS OR WAS A DIRECTOR OR
OFFICER OF THE GENERAL PARTNER, OR IS OR WAS SERVING AT THE REQUEST OF THE
GENERAL PARTNER AS A DIRECTOR, OFFICER, EMPLOYEE, TRUSTEE OR AGENT OF ANOTHER
CORPORATION, PARTNERSHIP, JOINT VENTURE, TRUST, NONPROFIT ENTITY OR OTHER ENTITY
(INCLUDING SERVICE WITH RESPECT TO EMPLOYEE BENEFIT PLANS), OR BY REASON OF
ANYTHING DONE OR NOT DONE BY THE INDEMNITEE IN ANY SUCH CAPACITY.

 

(F)                                    “INDEMNIFICATION PERIOD” SHALL BE SUCH
PERIOD AS THE INDEMNITEE SHALL CONTINUE TO SERVE AS A DIRECTOR OR OFFICER OF THE
GENERAL PARTNER, OR SHALL CONTINUE AT THE REQUEST OF THE GENERAL PARTNER TO
SERVE AS A DIRECTOR, OFFICER, EMPLOYEE, TRUSTEE OR AGENT OF ANOTHER CORPORATION,
PARTNERSHIP, JOINT VENTURE, TRUST, NONPROFIT ENTITY OR OTHER ENTITY, AND
THEREAFTER SO

 

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LONG AS THE INDEMNITEE SHALL BE SUBJECT TO ANY POSSIBLE PROCEEDING ARISING OUT
OF THE INDEMNITEE’S TENURE IN THE FOREGOING POSITIONS.

 

(G)                                 “LOSSES” ARE ANY JUDGMENTS, FINES, PENALTIES
AND AMOUNTS PAID IN SETTLEMENT (INCLUDING ALL INTEREST ASSESSMENTS AND OTHER
CHARGES PAID OR PAYABLE IN CONNECTION WITH OR IN RESPECT OF SUCH JUDGMENTS,
FINES, PENALTIES OR AMOUNTS PAID IN SETTLEMENT) OF ANY PROCEEDING.

 

(H)                                 “OSG” MEANS OVERSEAS SHIPHOLDING
GROUP, INC., A DELAWARE CORPORATION.

 

(I)                                     “PERSON” MEANS AN INDIVIDUAL OR A
CORPORATION, FIRM, LIMITED LIABILITY COMPANY, PARTNERSHIP, JOINT VENTURE, TRUST,
UNINCORPORATED ORGANIZATION, ASSOCIATION, GOVERNMENT AGENCY OR POLITICAL
SUBDIVISION THEREOF OR OTHER ENTITY.

 

(J)                                     “PROCEEDING” SHALL MEAN ANY COMPLETED,
ACTUAL, PENDING OR THREATENED ACTION, SUIT, CLAIM, INQUIRY OR PROCEEDING,
WHETHER CIVIL, CRIMINAL, ADMINISTRATIVE OR INVESTIGATIVE (INCLUDING AN ACTION BY
OR IN THE RIGHT OF THE PARTNERSHIP) AND WHETHER FORMAL OR INFORMAL.

 

(K)                                  “REVIEWING PARTY” SHALL MEAN (I) THE BOARD
OF DIRECTORS (PROVIDED THAT A MAJORITY OF DIRECTORS ARE NOT PARTIES TO THE
PROCEEDING), (II) A PERSON OR BODY SELECTED BY THE BOARD OF DIRECTORS OR
(III) IF THERE HAS BEEN A CHANGE IN CONTROL, THE SPECIAL INDEPENDENT COUNSEL
REFERRED TO IN SECTION 5.

 

2.                                       INDEMNIFICATION AND ADVANCEMENT OF
EXPENSES.  SUBJECT TO THE LIMITATIONS SET FORTH IN SECTION 4:

 

(A)                                  INDEMNIFICATION.  THE PARTNERSHIP SHALL
INDEMNIFY AND HOLD HARMLESS THE INDEMNITEE, TO THE FULLEST EXTENT PERMITTED BY
THE PARTNERSHIP AGREEMENT, AS SOON AS PRACTICABLE AFTER WRITTEN DEMAND IS
PRESENTED TO THE PARTNERSHIP, IN THE EVENT THE INDEMNITEE WAS OR IS MADE OR IS
THREATENED TO BE MADE A PARTY TO OR WITNESS IN OR IS OTHERWISE INVOLVED IN A
PROCEEDING BY REASON, IN WHOLE OR IN PART, OF AN INDEMNIFIABLE EVENT AGAINST ALL
EXPENSES AND LOSSES INCURRED BY THE INDEMNITEE IN CONNECTION WITH SUCH
PROCEEDING.  IN THE EVENT OF ANY CHANGE, AFTER THE DATE OF THIS AGREEMENT, IN
ANY APPLICABLE LAW, STATUTE OR RULE REGARDING THE RIGHT OF A DELAWARE LIMITED
PARTNERSHIP TO INDEMNIFY ANY DIRECTOR OR OFFICER OF ITS GENERAL PARTNER, SUCH
CHANGE, TO THE EXTENT IT WOULD EXPAND THE INDEMNITEE’S RIGHTS UNDER THIS
AGREEMENT, SHALL BE INCLUDED WITHIN THE INDEMNITEE’S RIGHTS AND THE
PARTNERSHIP’S OBLIGATIONS UNDER THIS AGREEMENT, AND, TO THE EXTENT IT WOULD
NARROW THE INDEMNITEE’S RIGHTS OR THE PARTNERSHIP’S OBLIGATIONS UNDER THIS
AGREEMENT, SHALL BE EXCLUDED FROM THIS AGREEMENT; PROVIDED, HOWEVER, THAT ANY
CHANGE REQUIRED BY APPLICABLE LAWS, STATUTES OR RULES TO BE APPLIED TO THIS
AGREEMENT SHALL BE SO APPLIED REGARDLESS OF WHETHER THE EFFECT OF SUCH CHANGE IS
TO NARROW THE INDEMNITEE’S RIGHTS OR THE PARTNERSHIP’S OBLIGATIONS UNDER THIS
AGREEMENT.

 

(B)                                 ADVANCEMENT OF EXPENSES.  THE PARTNERSHIP
SHALL, TO THE FULLEST EXTENT PERMITTED BY THE PARTNERSHIP AGREEMENT, PAY THE
EXPENSES INCURRED BY THE INDEMNITEE AS SOON AS PRACTICABLE AFTER WRITTEN DEMAND
IS PRESENTED TO THE PARTNERSHIP IN THE EVENT THE INDEMNITEE WAS OR IS MADE OR IS
THREATENED TO BE MADE A PARTY TO OR WITNESS IN OR IS OTHERWISE INVOLVED IN A
PROCEEDING BY REASON, IN WHOLE OR IN PART, OF AN INDEMNIFIABLE EVENT IN ADVANCE
OF ITS FINAL DISPOSITION; PROVIDED, HOWEVER, THAT, TO THE EXTENT REQUIRED BY
LAW, SUCH PAYMENT OF EXPENSES IN

 

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ADVANCE OF THE FINAL DISPOSITION OF THE PROCEEDING SHALL BE MADE ONLY UPON
RECEIPT OF AN UNDERTAKING BY THE INDEMNITEE TO REPAY ALL AMOUNTS ADVANCED IF IT
SHOULD BE ULTIMATELY DETERMINED THAT THE INDEMNITEE IS NOT ENTITLED TO BE
INDEMNIFIED UNDER THIS AGREEMENT, THE ACT OR OTHERWISE.

 

(C)                                  PARTIAL INDEMNITY.  IF THE INDEMNITEE IS
ENTITLED UNDER ANY PROVISION OF THIS AGREEMENT TO INDEMNIFICATION BY THE
PARTNERSHIP FOR SOME OR A PORTION OF THE LOSSES OR EXPENSES, BUT NOT, HOWEVER,
FOR ALL OF THE TOTAL AMOUNT THEREOF, THE PARTNERSHIP SHALL INDEMNIFY THE
INDEMNITEE FOR THE PORTION THEREOF TO WHICH THE INDEMNITEE IS ENTITLED. 
NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, TO THE EXTENT THAT THE
INDEMNITEE HAS BEEN SUCCESSFUL ON THE MERITS OR OTHERWISE IN DEFENSE OF ANY
ISSUE OR MATTER THEREIN, INCLUDING DISMISSAL WITHOUT PREJUDICE, THE INDEMNITEE
SHALL BE INDEMNIFIED AGAINST ALL EXPENSES INCURRED IN CONNECTION THEREWITH.

 

(D)                                 CONTRIBUTION.  IF THE INDEMNIFICATION
PROVIDED IN SECTION 2(A) FOR ANY REASON IS HELD BY A COURT OF COMPETENT
JURISDICTION TO BE UNAVAILABLE TO THE INDEMNITEE, THEN IN RESPECT OF ANY
INDEMNIFIABLE EVENT, THE PARTNERSHIP SHALL CONTRIBUTE TO THE AMOUNT OF EXPENSES
AND LOSSES PAID IN SETTLEMENT ACTUALLY INCURRED AND PAID OR PAYABLE BY THE
INDEMNITEE IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT (I) THE RELATIVE
BENEFITS RECEIVED BY THE PARTNERSHIP ON THE ONE HAND AND THE INDEMNITEE ON THE
OTHER HAND FROM THE TRANSACTION FROM WHICH SUCH PROCEEDING AROSE AND (II) THE
RELATIVE FAULT OF THE PARTNERSHIP ON THE ONE HAND AND OF THE INDEMNITEE ON THE
OTHER HAND IN CONNECTION WITH THE EVENTS WHICH RESULTED IN SUCH EXPENSES AND
LOSSES, AS WELL AS ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS.  THE RELATIVE
FAULT OF THE PARTNERSHIP ON THE ONE HAND AND OF THE INDEMNITEE ON THE OTHER HAND
SHALL BE DETERMINED BY REFERENCE TO, AMONG OTHER THINGS, THE PARTIES’ RELATIVE
INTENT, KNOWLEDGE, ACCESS TO INFORMATION AND OPPORTUNITY TO CORRECT OR PREVENT
THE CIRCUMSTANCES RESULTING IN SUCH EXPENSES, JUDGMENTS, FINES OR SETTLEMENT
AMOUNTS.  THE PARTNERSHIP AND THE INDEMNITEE AGREE THAT IT WOULD NOT BE JUST AND
EQUITABLE IF CONTRIBUTION PURSUANT TO THIS SECTION 2(D) WERE DETERMINED BY PRO
RATA ALLOCATION OR ANY OTHER METHOD OF ALLOCATION WHICH DOES NOT TAKE ACCOUNT OF
THE FOREGOING EQUITABLE CONSIDERATIONS.

 

(E)                                  ENFORCEMENT.  IF A CLAIM FOR
INDEMNIFICATION (FOLLOWING THE FINAL DISPOSITION OF SUCH PROCEEDING) UNDER
SECTION 2(A) OR ADVANCEMENT OF EXPENSES UNDER SECTION 2(B) IS NOT PAID IN FULL
WITHIN THIRTY DAYS AFTER A WRITTEN CLAIM THEREFOR BY THE INDEMNITEE HAS BEEN
PRESENTED TO THE PARTNERSHIP, THE INDEMNITEE MAY FILE SUIT AGAINST THE
PARTNERSHIP TO RECOVER THE UNPAID AMOUNT OF SUCH CLAIM AND, IF SUCCESSFUL IN
WHOLE OR IN PART, SHALL BE ENTITLED TO BE PAID THE EXPENSE OF PROSECUTING SUCH
CLAIM.  IN ADDITION, THE INDEMNITEE MAY FILE SUIT AGAINST THE PARTNERSHIP TO
ESTABLISH A RIGHT TO INDEMNIFICATION OR ADVANCEMENT OF EXPENSES ARISING UNDER
THIS AGREEMENT, THE PARTNERSHIP AGREEMENT, THE ACT OR OTHERWISE.  IN ANY SUCH
ACTION THE PARTNERSHIP SHALL HAVE THE BURDEN OF PROVING BY CLEAR AND CONVINCING
EVIDENCE THAT THE INDEMNITEE IS NOT ENTITLED TO THE REQUESTED INDEMNIFICATION OR
ADVANCEMENT OF EXPENSES UNDER APPLICABLE LAW.

 

3.                                       NOTIFICATION AND DEFENSE OF
PROCEEDING.  PROMPTLY AFTER RECEIPT BY THE INDEMNITEE OF NOTICE OF THE
COMMENCEMENT OF OR THREAT OF THE COMMENCEMENT OF ANY PROCEEDING, THE INDEMNITEE
SHALL, IF A REQUEST FOR INDEMNIFICATION IN RESPECT THEREOF IS TO BE MADE AGAINST
THE PARTNERSHIP UNDER THIS AGREEMENT, NOTIFY THE PARTNERSHIP OF THE COMMENCEMENT
THEREOF; BUT THE FAILURE TO NOTIFY THE PARTNERSHIP WILL NOT RELIEVE THE
PARTNERSHIP FROM ANY LIABILITY WHICH IT MAY HAVE TO THE INDEMNITEE UNDER THIS
AGREEMENT OR OTHERWISE UNLESS AND ONLY TO THE EXTENT THAT SUCH

 

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OMISSION CAN BE SHOWN TO HAVE PREJUDICED THE PARTNERSHIP’S ABILITY TO DEFEND THE
PROCEEDING.  EXCEPT AS OTHERWISE PROVIDED BELOW, THE PARTNERSHIP SHALL BE
ENTITLED TO ASSUME THE DEFENSE OF SUCH PROCEEDING, WITH COUNSEL APPROVED BY THE
INDEMNITEE (WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD).  AFTER NOTICE
FROM THE PARTNERSHIP TO THE INDEMNITEE OF ITS ELECTION TO ASSUME THE DEFENSE
THEREOF, THE PARTNERSHIP WILL NOT BE LIABLE TO THE INDEMNITEE UNDER THIS
AGREEMENT FOR ANY LEGAL OR OTHER EXPENSES SUBSEQUENTLY INCURRED BY THE
INDEMNITEE IN CONNECTION WITH THE DEFENSE THEREOF OTHER THAN REASONABLE COSTS OF
INVESTIGATION OR AS OTHERWISE PROVIDED BELOW.  THE INDEMNITEE SHALL HAVE THE
RIGHT TO EMPLOY ITS COUNSEL IN SUCH PROCEEDING, BUT THE FEES AND EXPENSES OF
SUCH COUNSEL INCURRED AFTER NOTICE FROM THE PARTNERSHIP OF ITS ASSUMPTION OF THE
DEFENSE THEREOF SHALL BE AT THE EXPENSE OF THE INDEMNITEE UNLESS (I) THE
EMPLOYMENT OF COUNSEL BY THE INDEMNITEE HAS BEEN AUTHORIZED BY THE PARTNERSHIP,
(II) THE INDEMNITEE SHALL HAVE REASONABLY CONCLUDED THAT THERE MAY BE A CONFLICT
OF INTEREST BETWEEN THE PARTNERSHIP AND THE INDEMNITEE IN THE CONDUCT OF THE
DEFENSE OF SUCH PROCEEDING OR (III) THE PARTNERSHIP SHALL NOT IN FACT HAVE
EMPLOYED COUNSEL TO ASSUME THE DEFENSE OF SUCH PROCEEDING, IN EACH OF WHICH
CASES THE FEES AND EXPENSES OF COUNSEL SHALL BE AT THE EXPENSE OF THE
PARTNERSHIP.  THE PARTNERSHIP SHALL NOT BE ENTITLED TO ASSUME THE DEFENSE OF ANY
PROCEEDING BROUGHT BY OR ON BEHALF OF THE PARTNERSHIP OR AS TO WHICH THE
INDEMNITEE SHALL HAVE MADE THE CONCLUSION PROVIDED FOR IN CLAUSE (II) OF THIS
SECTION 3.  THE PARTNERSHIP SHALL NOT SETTLE ANY PROCEEDING IN ANY MANNER, WHICH
WOULD IMPOSE ANY PENALTY, LIMITATION, ADMISSION, LOSS OR EXPENSE ON THE
INDEMNITEE WITHOUT THE INDEMNITEE’S PRIOR WRITTEN CONSENT.  NEITHER THE
PARTNERSHIP NOR THE INDEMNITEE WILL UNREASONABLY WITHHOLD ITS CONSENT TO ANY
PROPOSED SETTLEMENT, PROVIDED THAT THE INDEMNITEE MAY, IN THE INDEMNITEE’S SOLE
DISCRETION, WITHHOLD CONSENT TO ANY PROPOSED SETTLEMENT THAT WOULD IMPOSE ANY
PENALTY, LIMITATION, ADMISSION, LOSS OR EXPENSE ON THE INDEMNITEE.

 

4.                                       LIMITATION ON INDEMNIFICATION. 
NOTWITHSTANDING THE TERMS OF SECTION 2:

 

(A)                                  THE OBLIGATIONS OF THE PARTNERSHIP SET
FORTH IN SECTION 2 SHALL BE SUBJECT TO THE CONDITION THAT THE REVIEWING PARTY
SHALL NOT HAVE DETERMINED (BASED ON A WRITTEN OPINION OF OUTSIDE COUNSEL IN ALL
CASES) THAT THE INDEMNITEE WOULD NOT BE PERMITTED TO BE SO INDEMNIFIED UNDER THE
PARTNERSHIP AGREEMENT; PROVIDED, HOWEVER, THAT IF THE INDEMNITEE HAS COMMENCED
OR THEREAFTER COMMENCES LEGAL PROCEEDINGS IN A COURT OF COMPETENT JURISDICTION
TO SECURE A DETERMINATION THAT THE INDEMNITEE SHOULD BE INDEMNIFIED UNDER THE
PARTNERSHIP AGREEMENT, ANY DETERMINATION MADE BY THE REVIEWING PARTY THAT THE
INDEMNITEE WOULD NOT BE PERMITTED TO BE INDEMNIFIED UNDER APPLICABLE LAW SHALL
NOT BE BINDING AND THE INDEMNITEE SHALL NOT BE REQUIRED TO REIMBURSE THE
PARTNERSHIP FOR ANY ADVANCEMENT OF EXPENSES UNTIL A FINAL JUDICIAL DETERMINATION
IS MADE WITH RESPECT THERETO (AS TO WHICH ALL RIGHTS OF APPEAL THEREFROM HAVE
BEEN EXHAUSTED OR LAPSED) AND THE PARTNERSHIP SHALL NOT BE OBLIGATED TO
INDEMNIFY OR ADVANCE TO THE INDEMNITEE ANY ADDITIONAL AMOUNTS COVERED BY SUCH
REVIEWING PARTY DETERMINATION (UNLESS THERE HAS BEEN A DETERMINATION BY A COURT
OF COMPETENT JURISDICTION THAT THE INDEMNITEE WOULD BE PERMITTED TO BE SO
INDEMNIFIED UNDER APPLICABLE LAW);

 

(B)                                 THE PARTNERSHIP SHALL NOT BE REQUIRED TO
INDEMNIFY OR ADVANCE EXPENSES TO THE INDEMNITEE WITH RESPECT TO A PROCEEDING (OR
PART THEREOF) BY THE INDEMNITEE (AND NOT BY WAY OF DEFENSE), EXCEPT IF THE
COMMENCEMENT OF SUCH PROCEEDING (I) WAS AUTHORIZED IN THE SPECIFIC CASE BY THE
BOARD OF DIRECTORS OR (II) BROUGHT TO ESTABLISH OR ENFORCE A RIGHT TO
INDEMNIFICATION AND/OR ADVANCEMENT OF EXPENSES ARISING UNDER THIS AGREEMENT, THE
PARTNERSHIP AGREEMENT, THE ACT OR OTHERWISE;

 

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(C)                                  THE PARTNERSHIP SHALL NOT BE OBLIGATED
PURSUANT TO THE TERMS OF THIS AGREEMENT TO INDEMNIFY THE INDEMNITEE FOR ANY
AMOUNTS PAID IN SETTLEMENT OF A PROCEEDING UNLESS THE PARTNERSHIP CONSENTS IN
ADVANCE IN WRITING TO SUCH SETTLEMENT, WHICH CONSENT SHALL NOT BE UNREASONABLY
WITHHELD;

 

(D)                                 THE PARTNERSHIP SHALL NOT BE OBLIGATED
PURSUANT TO THE TERMS OF THIS AGREEMENT TO INDEMNIFY THE INDEMNITEE ON ACCOUNT
OF ANY SUIT IN WHICH JUDGMENT IS RENDERED AGAINST THE INDEMNITEE FOR AN
ACCOUNTING OF PROFITS MADE FROM THE PURCHASE OR SALE BY THE INDEMNITEE OF
SECURITIES OF THE PARTNERSHIP PURSUANT TO THE PROVISIONS OF SECTION L6(B) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED OR SIMILAR PROVISIONS OF ANY
FEDERAL, STATE OR LOCAL STATUTORY LAW;

 

(E)                                  THE PARTNERSHIP SHALL NOT BE OBLIGATED
PURSUANT TO THE TERMS OF THIS AGREEMENT TO INDEMNIFY THE INDEMNITEE IF A FINAL
DECISION BY A COURT HAVING JURISDICTION IN THE MATTER SHALL DETERMINE THAT SUCH
INDEMNIFICATION IS NOT LAWFUL; AND

 

(F)                                    THE PARTNERSHIP SHALL NOT BE OBLIGATED
PURSUANT TO THE TERMS OF THIS AGREEMENT TO MAKE ANY PAYMENT IN CONNECTION WITH
ANY PROCEEDING TO THE EXTENT THE INDEMNITEE HAS OTHERWISE ACTUALLY RECEIVED
PAYMENT (UNDER ANY INSURANCE POLICY OR OTHERWISE) OF THE AMOUNTS OTHERWISE
INDEMNIFIABLE UNDER THIS AGREEMENT.

 

5.                                       CHANGE IN CONTROL.  THE PARTNERSHIP
AGREES THAT IF THERE IS A CHANGE IN CONTROL, THEN WITH RESPECT TO ALL MATTERS
THEREAFTER ARISING CONCERNING THE RIGHTS OF THE INDEMNITEE TO INDEMNITY PAYMENTS
AND EXPENSE ADVANCES UNDER THIS AGREEMENT, THE PARTNERSHIP AGREEMENT AND ANY
OTHER AGREEMENTS NOW OR HEREAFTER IN EFFECT RELATING TO PROCEEDINGS FOR
INDEMNIFIABLE EVENTS, THE PARTNERSHIP SHALL SEEK LEGAL ADVICE ONLY FROM SPECIAL
INDEPENDENT COUNSEL SELECTED BY THE INDEMNITEE AND APPROVED BY THE BOARD OF
DIRECTORS (WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD), AND WHO HAS NOT
OTHERWISE PERFORMED SERVICES FOR THE PARTNERSHIP (OTHER THAN IN CONNECTION WITH
SUCH MATTERS) OR THE INDEMNITEE.  WITHOUT LIMITING THE BOARD OF DIRECTOR’S
OBLIGATION NOT TO UNREASONABLY WITHHOLD ITS APPROVAL, IN THE EVENT THAT THE
INDEMNITEE AND THE PARTNERSHIP ARE UNABLE TO AGREE ON THE SELECTION OF THE
SPECIAL INDEPENDENT COUNSEL, SUCH SPECIAL INDEPENDENT COUNSEL SHALL BE SELECTED
BY LOT FROM AMONG AT LEAST FIVE NATIONALLY RECOGNIZED LAW FIRMS EACH IN NEW YORK
CITY, NEW YORK, EACH HAVING NO LESS THAN 250 LAWYERS.  SUCH SELECTION SHALL BE
MADE IN THE PRESENCE OF THE INDEMNITEE (AND THE INDEMNITEE’S LEGAL COUNSEL OR
EITHER OF THEM, AS THE INDEMNITEE MAY ELECT).  SUCH SPECIAL INDEPENDENT COUNSEL,
AMONG OTHER THINGS, SHALL DETERMINE WHETHER AND TO WHAT EXTENT THE INDEMNITEE
WOULD BE PERMITTED TO BE INDEMNIFIED UNDER APPLICABLE LAW AND SHALL RENDER ITS
WRITTEN OPINION TO THE PARTNERSHIP AND THE INDEMNITEE TO SUCH EFFECT.  THE
PARTNERSHIP AGREES TO PAY THE REASONABLE FEES OF THE SPECIAL INDEPENDENT COUNSEL
REFERRED TO ABOVE AND TO FULLY INDEMNIFY SUCH COUNSEL AGAINST ANY AND ALL
EXPENSES (INCLUDING ATTORNEYS’ FEES), PROCEEDINGS, LIABILITIES AND DAMAGES
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ITS ENGAGEMENT PURSUANT TO THIS
AGREEMENT.

 

6.                                       SUBROGATION.  IN THE EVENT OF PAYMENT
TO THE INDEMNITEE UNDER THIS AGREEMENT, THE PARTNERSHIP SHALL BE SUBROGATED TO
THE EXTENT OF SUCH PAYMENT TO ALL OF THE RIGHTS OF RECOVERY OF THE INDEMNITEE,
WHO SHALL EXECUTE ALL PAPERS REQUIRED AND SHALL DO EVERYTHING THAT MAY BE
NECESSARY TO SECURE SUCH RIGHTS, INCLUDING THE EXECUTION OF SUCH DOCUMENTS
NECESSARY TO ENABLE THE PARTNERSHIP EFFECTIVELY TO BRING SUIT TO ENFORCE SUCH
RIGHTS.

 

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7.                                       NO PRESUMPTIONS.  FOR PURPOSES OF THIS
AGREEMENT, THE TERMINATION OF ANY PROCEEDING AGAINST THE INDEMNITEE BY JUDGMENT,
ORDER, SETTLEMENT (WHETHER WITH OR WITHOUT COURT APPROVAL) OR CONVICTION, OR
UPON A PLEA OF NOLO CONTENDERE, OR ITS EQUIVALENT, SHALL NOT CREATE A
PRESUMPTION THAT THE INDEMNITEE DID NOT MEET ANY PARTICULAR STANDARD OF CONDUCT
OR HAVE ANY PARTICULAR BELIEF OR THAT A COURT HAS DETERMINED THAT
INDEMNIFICATION IS NOT PERMITTED BY APPLICABLE LAW.  IN ADDITION, NEITHER THE
FAILURE OF THE REVIEWING PARTY TO HAVE MADE A DETERMINATION AS TO WHETHER THE
INDEMNITEE HAS MET ANY PARTICULAR STANDARD OF CONDUCT OR HAD ANY PARTICULAR
BELIEF, NOR AN ACTUAL DETERMINATION BY THE REVIEWING PARTY THAT THE INDEMNITEE
HAS NOT MET SUCH STANDARD OF CONDUCT OR DID NOT HAVE SUCH BELIEF SHALL BE A
DEFENSE TO THE INDEMNITEE’S PROCEEDING FOR INDEMNIFICATION OR CREATE A
PRESUMPTION THAT THE INDEMNITEE HAS NOT MET ANY PARTICULAR STANDARD OF CONDUCT
OR DID NOT HAVE ANY PARTICULAR BELIEF.

 

8.                                       NON-EXCLUSIVITY.  THE RIGHTS CONFERRED
ON THE INDEMNITEE BY THIS AGREEMENT SHALL BE IN ADDITION TO, AND SHALL NOT BE
DEEMED EXCLUSIVE OF, ANY OTHER RIGHTS WHICH THE INDEMNITEE MAY HAVE OR HEREAFTER
ACQUIRE UNDER ANY STATUTE, THE CERTIFICATE OF LIMITED PARTNERSHIP OF THE
PARTNERSHIP AND THE PARTNERSHIP AGREEMENT, ANY OTHER AGREEMENT, VOTE OF
UNITHOLDERS OR A RESOLUTION OF DIRECTORS, OR OTHERWISE, AND TO THE EXTENT THAT
DURING THE INDEMNIFICATION PERIOD SUCH RIGHTS ARE MORE FAVORABLE THAN THE RIGHTS
CURRENTLY PROVIDED UNDER THIS AGREEMENT TO THE INDEMNITEE, THE INDEMNITEE SHALL
BE ENTITLED TO THE FULL BENEFITS OF SUCH MORE FAVORABLE RIGHTS TO THE EXTENT
PERMITTED BY LAW.  OTHER THAN AS SET FORTH IN THIS SECTION 8, IN THE CASE OF ANY
INCONSISTENCY BETWEEN THE INDEMNIFICATION PROVISIONS OF THIS AGREEMENT AND ANY
OTHER AGREEMENT RELATING TO THE INDEMNIFICATION OF THE INDEMNITEE, THE
INDEMNIFICATION PROVISIONS OF THIS AGREEMENT SHALL CONTROL.

 

9.                                       LIABILITY INSURANCE.  THE PARTNERSHIP
MAY, TO THE EXTENT THAT THE BOARD OF DIRECTORS IN GOOD FAITH DETERMINES IT TO BE
ECONOMICALLY REASONABLE, MAINTAIN A POLICY OF DIRECTORS’ AND OFFICERS’ LIABILITY
INSURANCE, ON SUCH TERMS CONDITIONS AS MAY BE APPROVED BY THE BOARD OF
DIRECTORS.  TO THE EXTENT THE PARTNERSHIP MAINTAINS DIRECTORS’ AND OFFICERS’
LIABILITY INSURANCE, THE INDEMNITEE SHALL BE COVERED BY SUCH POLICY IN SUCH A
MANNER AS TO PROVIDE THE INDEMNITEE THE SAME RIGHTS AND BENEFITS AS ARE ACCORDED
TO THE MOST FAVORABLY INSURED OF THE GENERAL PARTNER’S DIRECTORS, IF THE
INDEMNITEE IS A DIRECTOR, OR OF THE GENERAL PARTNER’S OFFICERS, IF THE
INDEMNITEE IS NOT A DIRECTOR BUT IS AN OFFICER.  NOTICE OF ANY TERMINATION OR
FAILURE TO RENEW SUCH POLICY SHALL BE PROVIDED TO THE INDEMNITEE PROMPTLY UPON
THE PARTNERSHIP’S BECOMING AWARE OF SUCH TERMINATION OR FAILURE TO RENEW.  THE
PARTNERSHIP SHALL PROVIDE TO THE INDEMNITEE COPIES OF ALL SUCH INSURANCE
POLICIES AND ANY ENDORSEMENTS THERETO WHENEVER SUCH DOCUMENTS HAVE BEEN PROVIDED
TO THE PARTNERSHIP.

 

10.                                 AMENDMENT/WAIVER.  NO SUPPLEMENT,
MODIFICATION OR AMENDMENT OF THIS AGREEMENT SHALL BE BINDING UNLESS EXECUTED IN
WRITING BY BOTH OF THE PARTIES HERETO.  NO WAIVER OF ANY OF THE PROVISIONS OF
THIS AGREEMENT SHALL BE DEEMED OR SHALL CONSTITUTE A WAIVER OF ANY OTHER
PROVISIONS OF THIS AGREEMENT (WHETHER OR NOT SIMILAR) NOR SHALL SUCH WAIVER
CONSTITUTE A CONTINUING WAIVER.  ANY WAIVER TO THIS AGREEMENT SHALL BE IN
WRITING.

 

11.                                 BINDING EFFECT.  THIS AGREEMENT SHALL BE
BINDING UPON AND INURE TO THE BENEFIT OF AND BE ENFORCEABLE BY THE PARTIES
HERETO AND THEIR RESPECTIVE SUCCESSORS, INCLUDING ANY DIRECT OR INDIRECT
SUCCESSOR BY PURCHASE, MERGER, CONSOLIDATION OR OTHERWISE TO ALL OR
SUBSTANTIALLY ALL OF

 

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THE BUSINESS AND/OR ASSETS OF THE PARTNERSHIP, ASSIGNS, SPOUSES, HEIRS, AND
PERSONAL AND LEGAL REPRESENTATIVES.

 

12.                                 SURVIVAL.  THIS AGREEMENT SHALL CONTINUE IN
EFFECT DURING THE INDEMNIFICATION PERIOD, REGARDLESS OF WHETHER THE INDEMNITEE
CONTINUES TO SERVE AS AN OFFICER OR DIRECTOR OF THE GENERAL PARTNER OR OF ANY
OTHER ENTERPRISE AT THE GENERAL PARTNER’S REQUEST.

 

13.                                 SEVERABILITY.  THE PROVISIONS OF THIS
AGREEMENT SHALL BE SEVERABLE IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT
(INCLUDING ANY PROVISION WITHIN A SINGLE SECTION, PARAGRAPH OR SENTENCE) IS HELD
BY A COURT OF COMPETENT JURISDICTION TO BE INVALID, VOID OR OTHERWISE
UNENFORCEABLE, AND THE REMAINING PROVISIONS SHALL REMAIN ENFORCEABLE TO THE
FULLEST EXTENT PERMITTED BY LAW.

 

14.                                 PERIOD OF LIMITATIONS.  NO LEGAL ACTION
SHALL BE BROUGHT AND NO CAUSE OF ACTION SHALL BE ASSERTED BY OR IN THE RIGHT OF
THE PARTNERSHIP AGAINST THE INDEMNITEE OR THE INDEMNITEE’S ESTATE, SPOUSE,
HEIRS, EXECUTORS OR PERSONAL OR LEGAL REPRESENTATIVES AFTER THE EXPIRATION OF
THREE YEARS FROM THE DATE OF ACCRUAL OF SUCH CAUSE OF ACTION, AND ANY CLAIM OR
CAUSE OF ACTION OF THE PARTNERSHIP SHALL BE EXTINGUISHED AND DEEMED RELEASED
UNLESS ASSERTED BY THE TIMELY FILING OF A LEGAL ACTION WITHIN SUCH THREE YEAR
PERIOD; PROVIDED, HOWEVER, THAT IF ANY SHORTER PERIOD OF LIMITATIONS IS
OTHERWISE APPLICABLE TO ANY SUCH CAUSE OF ACTION, SUCH SHORTER PERIOD SHALL
GOVERN.

 

15.                                 COUNTERPARTS.  THIS AGREEMENT MAY BE
EXECUTED IN COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED TO BE AN ORIGINAL AND
ALL OF WHICH TOGETHER SHALL BE DEEMED TO BE ONE AND THE SAME INSTRUMENT,
NOTWITHSTANDING THAT BOTH PARTIES ARE NOT SIGNATORIES TO THE ORIGINAL OR SAME
COUNTERPART.

 

16.                                 GOVERNING LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS.

 

 

 

OSG AMERICA L.P.,

 

 

 

By:

  OSG America LLC, its general partner

 

 

 

 

 

 

 

By

  /s/Myles R. Itkin

 

 

  Myles R. Itkin

 

 

  Chief Financial Officer

 

 

 

 

 

 

 

 

  /s/ Henry Flinter

 

 

  Henry P. Flinter

 

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