EXHIBIT 10.27

 

Settlement, Release, and Indemnity Agreement

 

This settlement, release, and indemnity agreement (this “Agreement”) is entered
into as of February 3, 2015 (the “Execution Date”), by and between Overseas
Shipholding Group, Inc. (“OSG”), OSG Ship Management, Inc. (“OSM”), OSG Bulk
Ships, Inc. (“OBS”), and OSG International, Inc. (“OIN” and together with OSG,
OSM, and OBS, the “OSG Parties”) and James I. Edelson (“Edelson” and together
with the OSG Parties, the “Parties”) and shall become effective without further
action of the Parties on the date that the order of the United States Bankruptcy
Court for the District of Delaware (the “Bankruptcy Court”) approving this
Agreement and authorizing the OSG Parties’ performance hereunder (the “Approval
Order”) becomes a Final Order (such date, the “Effective Date”).1

 

WHEREAS on November 14, 2012, OSG and 180 of its affiliates (collectively, prior
to the effective date of the Plan (defined below) the “Debtors,” and,
thereafter, the “Reorganized Debtors”), filed voluntary petitions for relief
under Chapter 11 of the Bankruptcy Code (collectively, the “Chapter 11 Cases”)
in the Bankruptcy Court; and

 

WHEREAS Edelson subsequently filed five proofs of claim, assigned claim numbers
498, 1093, 1105, 1676, and 1678 (together, the “Edelson Claims”), in the Chapter
11 Cases, asserting various claims arising from or related to his employment as
general counsel of OSG; and

 

WHEREAS, on July 18, 2014, the Bankruptcy Court entered its Findings of Fact,
Conclusions of Law, and Order Confirming First Amended Joint Plan of
Reorganization of Overseas Shipholding Group, Inc., Et Al., Under Chapter 11 of
the Bankruptcy Code (D.I. 3683) (the “Confirmation Order”), confirming the First
Amended Joint Plan of Reorganization of Overseas Shipholding Group, Inc. et al.,
Under Chapter 11 of the Bankruptcy Code (D.I. 3701) (the “Plan”); and

 

WHEREAS the Plan designated the Edelson Claims as Disputed Claims; and

 

WHEREAS the Plan authorized the Reorganized Debtors and the Administrative and
Disputed Claims Agent to resolve all Disputed Claims; and

 

WHEREAS, following a series of good-faith, arm’s-length negotiations, conducted
with the assistance of counsel, the Parties desire to settle all potential
claims, including any and all alleged liabilities asserted against the Debtors
in the Edelson Claims, subject to entry of the Approval Order on the terms and
conditions set forth herein;

 

NOW THEREFORE, in consideration of the premises and the mutual agreements set
forth herein, the sufficiency of which is hereby acknowledged, and intending to
be legally bound hereby, the Parties agree as follows:

 

 

1 Unless otherwise noted, all capitalized terms used but not defined herein
shall have the meaning ascribed to them in the Plan.

 

 

 

 

1.          Settlement Sum. No later than ten (10) business days after the
Effective Date, the OSG Parties shall pay Edelson seven hundred eighty-two
thousand and thirty-seven United States dollars ($782,037.00), inclusive of
interests and costs, and subject to the withholding of all federal, state, city
or other taxes that the OSG Parties may reasonably determine are required to be
withheld pursuant to any applicable law or regulation (it being understood that
Edelson shall be responsible for payment of all taxes in respect of the payments
and benefits provided herein) (the “Settlement Sum”).

 

2.          Edelson Release: Edelson, for himself, his successors, agents,
assigns or those acting through or on his behalf (collectively, “Edelson Related
Persons”), hereby releases and forever discharges the OSG Parties, the Debtors,
the Reorganized Debtors, their parents, subsidiaries, divisions, and affiliates,
and each of their respective officers, directors, agents, representatives,
employees, predecessors, successors, insurers, attorneys, and assigns, from any
and all claims, demands, debts, damages, liabilities, injuries, actions, or
rights of action of any nature whatsoever, whether known or unknown, in law or
admiralty or equity, which he or any Edelson Related Persons had, now have, or
claim to have, for or by reason of any fact, cause, or thing whatsoever from the
beginning of the world to the Effective Date, other than the Preserved
Obligations (collectively, the “Edelson Released Claims”).

 

3.          The OSG Parties Release: In consideration of the foregoing release,
and as of the Effective Date, the OSG Parties, each for itself and its parents,
subsidiaries, divisions and affiliates, and their respective officers,
directors, administrators, predecessors, successors, agents, employees,
attorneys, assigns or those acting through or on behalf of any of the OSG
Parties (collectively, “OSG Related Persons”) hereby releases and forever
discharges Edelson and each of the Edelson Related Persons from any and all
claims, demands, debts, damages, liabilities, injuries, actions, or rights of
action of any nature whatsoever, whether known or unknown, in law or admiralty
or equity, which they or any OSG Related Persons had, now have, or claim to
have, for or by reason of any fact, cause, or thing whatsoever from the
beginning of the world to the Effective Date, other than the Preserved
Obligations (the “OSG Released Claims” and together with the Edelson released
Claims, the “Released Claims”).

 

4.          Preserved Obligations. Notwithstanding anything to the contrary
herein, nothing in this Agreement shall impact, and the Released Claims shall
not extend to:

 

a.any insurance policies, or claims asserted thereunder against parties other
than OSG Related Persons, in connection with Edelson’s employment by any of the
OSG Parties;

 

b.the right of Edelson, if any, in the event judgment is obtained against him in
any action or proceeding commenced by any party other than the OSG Parties
(whether now pending or hereafter commenced), to seek a judgment credit in such
litigation in accordance with applicable non-bankruptcy law;

 

c.any claims or causes of action for contribution or proportionate fault that
any party, other than the OSG Parties, who is a named defendant in an action or
proceeding may have against any person other than the OSG Parties that arises
from or is related to the claims asserted against them in such action;

 

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d.any obligations arising on or after January 1, 2015 from or in (i) the
ordinary course of Edelson’s employment with the OSG Parties, including without
limitation any bonus due to Edelson with respect to 2014, (ii) any agreements
between the OSG Parties or Edelson, dated on or after January 1, 2015, and (iii)
any retention payments due to Edelson pursuant to any Board approved retention
plans for which Edelson is eligible, in the event of which such plans shall
govern such rights and obligations;

 

e.any claims arising from any supplemental employee retirement plan arising from
Edelson’s employment by any of the OSG Parties, as provided for in the Plan; or

 

f.any obligations under this Agreement (collectively, the “Preserved
Obligations”).

 

5.          Preservation of Insurance. For the avoidance of doubt,
notwithstanding anything herein to the contrary, nothing in this Agreement,
including any releases set forth above, shall diminish, reduce, limit, impact or
impair the enforceability of any insurance policies or other policies of
insurance that may cover claims against Edelson, including, without limitation,
any claims of Edelson for insurance coverage or claims of Edelson under any
policies of insurance solely as to parties other than the OSG Parties, the
Debtors, the Reorganized Debtors, or the Administrative and Disputed Claims
Agent.

 

6.          Unknown Claims. Each of the Parties represents that it is familiar
with the provisions of California Civil Code Section 1542, agrees to expressly
waive any rights that may exist thereunder, as well as under any other statute
or common law principles of similar effect. California Civil Code Section 1542
provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR.

 

7.          Expungement of the Edelson Claims: Upon the Effective Date, the
Edelson Claims shall be deemed expunged with prejudice, and the Reorganized
Debtors’ Claims Agent shall be authorized to reflect such expungement on the
Reorganized Debtors’ claims register.

 

8.          Indemnity.

 

a.Edelson hereby indemnifies and shall keep indemnified, each of the OSG
Parties, the Debtors, the Reorganized Debtors, their parents, subsidiaries,
divisions, and affiliates, and each of their respective officers, directors,
agents, representatives, employees, predecessors, successors, insurers,
attorneys, and assigns against all costs and damages (including legal expenses)
incurred in any future actions Edelson or any Edelson Related Persons may bring
in respect of any of the Edelson Released Claims.

 

b.The OSG Parties hereby indemnify and shall keep indemnified, Edelson, his
successors and assigns, against all costs and damages (including legal expenses)
incurred in any future actions the OSG Parties may bring in respect of any of
the OSG Released Claims.

 

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9.          Miscellaneous.

 

a.           Bankruptcy Court Approval.

 

i.This Agreement, and the OSG Parties’ obligations hereunder, are at all times
subject to and conditional upon entry of the Approval Order.

 

ii.As soon as is reasonably practicable after the Execution Date, the OSG
Parties shall move the Bankruptcy Court for entry of the Approval Order. All
Parties shall use commercially reasonable efforts and work cooperatively in good
faith (including by executing and delivering such additional instruments,
notices, certificates, assurances and other documents and taking such further
actions as may be reasonably necessary or desirable) in order to obtain entry of
the Approval Order.

 

iii.In the event that the Bankruptcy Court declines to enter the Approval Order
this Agreement shall be deemed null and void and of no force or effect.

 

b.           Entire Agreement. This Agreement constitutes the entire agreement
of the Parties with respect to the subject matter hereof. This Agreement
supersedes all prior negotiations, agreements and understandings of the Parties
of any nature, whether oral or written, relating thereto.

 

c.           Amendments. This Agreement may be amended only by a written
agreement between the Parties hereto.

 

d.           Governing Law. This Agreement is governed by and shall be construed
in all respects in accordance with the laws of the State of New York without
regard to its conflict of laws principles.

 

e.           Severability. If in any proceedings a court will refuse to enforce
any provision of this Agreement, then such unenforceable provision will be
deemed eliminated from this Agreement for the purpose of such proceedings to the
extent necessary to permit the remaining provisions to be enforced. To the full
extent, however, that the provisions of any applicable law may be waived, they
are hereby waived to the end that this Agreement be deemed to be valid and a
binding agreement enforceable in accordance with its terms, and in the event
that any provision hereof will be found to be invalid or unenforceable, such
provision will be construed by limiting it so as to be valid and enforceable to
the maximum extent consistent with and possible under applicable law.

 

f.            Counterparts. This Agreement may be executed by facsimile or
portable document format (pdf) transmission and by counsel for each of the
Parties, in separate counterparts, each of which when so executed will be deemed
to be an original and all of which together will constitute one and the same
agreement.

 

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IN WITNESS WHEREOF, the Parties have duly executed this agreement as of the
Execution Date set forth above.

 

For the OSG Parties:

  For Edelson:       /s/Ian T. Blackley   /s/James I. Edelson Name: Capt. Ian T.
Blackley     Title:   Chief Executive Officer     Date:   February 3, 2015      
    For  the Administrative and     Disputed Claims Agent:           /s/ Kathryn
Schultea     Name: Kathryn Schultea     Title:   Managing Director    
Date:   February 3, 2015    

 

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