Exhibit 10.5


 


 




 





 


ADMINISTRATIVE
SERVICES AGREEMENT


 


BETWEEN


 


OSG AMERICA
L.P., AND


 


OSG SHIP
MANAGEMENT, INC.


 




 





 

















 


TABLE OF CONTENTS


 


	
   

  	
  Page

  
	
   

  	
   

  
	
  SECTION 1. Definitions.

  	
  1

  
	
   

  	
   

  
	
  SECTION 2. Administrative Services.

  	
  2

  
	
   

  	
   

  
	
  SECTION 3. Covenants.

  	
  2

  
	
   

  	
   

  
	
  SECTION 4. Non-exclusivity.

  	
  3

  
	
   

  	
   

  
	
  SECTION 5. Confidential Information.

  	
  3

  
	
   

  	
   

  
	
  SECTION 6. Reimbursement of Costs and Expenses.

  	
  3

  
	
   

  	
   

  
	
  SECTION 7. General Relationship between the Parties.

  	
  3

  
	
   

  	
   

  
	
  SECTION 8. Indemnity.

  	
  3

  
	
   

  	
   

  
	
  SECTION 9. Consequential Damages.

  	
  4

  
	
   

  	
   

  
	
  SECTION 10. Term and Termination.

  	
  4

  
	
   

  	
   

  
	
  SECTION 11. Costs and Expenses Upon Termination.

  	
  4

  
	
   

  	
   

  
	
  SECTION 12. Surrender of Books and Records.

  	
  4

  
	
   

  	
   

  
	
  SECTION 13. Force Majeure.

  	
  5

  
	
   

  	
   

  
	
  SECTION 14. Entire Agreement.

  	
  5

  
	
   

  	
   

  
	
  SECTION 15. Severability.

  	
  5

  
	
   

  	
   

  
	
  SECTION 16. Currency.

  	
  5

  
	
   

  	
   

  
	
  SECTION 17. Choice of Law; Submission to Jurisdiction.

  	
  5

  
	
   

  	
   

  
	
  SECTION 18. Notice.

  	
  5

  
	
   

  	
   

  
	
  SECTION 19. Subcontracting and Assignment.

  	
  6

  
	
   

  	
   

  
	
  SECTION 20. Amendments; Waivers.

  	
  6

  
	
   

  	
   

  
	
  SECTION 21. Counterparts.

  	
  6

  



 

















 


 


FORM OF ADMINISTRATIVE SERVICES AGREEMENT


 


ADMINISTRATIVE SERVICES AGREEMENT (this “Agreement”),
dated as of                 ,
2007, between OSG AMERICA L.P., a Delaware limited partnership (“OSG MLP”)
and OSG SHIP MANAGEMENT, INC., a Delaware corporation (“OSGM”).


 


WHEREAS OSG
MLP, a limited partnership whose units are listed and will trade on the New
York Stock Exchange, requires certain non-strategic administrative services;
and


 


WHEREAS OSG
MLP wishes to engage OSGM to provide such non-strategic administrative services
to OSG MLP on the terms and subject to the conditions of this Agreement.


 


NOW,
THEREFORE, in consideration of the foregoing and the respective covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties (as
defined below) hereto agree as follows:


 


SECTION 1. Definitions.
For the purposes of this Agreement:


 


“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
common control with, the Person in question. 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.


 


“Change of
Control” means, with respect to any Person (the “Applicable Person”),
any of the following events: 
(a) any sale, lease, exchange or other transfer (in one transaction
or a series of related transactions) of all or substantially all of the
Applicable Person’s assets to any other Person, unless immediately following
such sale, lease, exchange or other transfer such assets are owned, directly or
indirectly, by the Applicable Person; (b) the consolidation or merger of
the Applicable Person with or into another Person pursuant to a transaction in
which the outstanding Voting Securities of the Applicable Person are changed
into or exchanged for cash, securities or other property, other than any such
transaction where (i) the outstanding Voting Securities of the Applicable
Person are changed into or exchanged for Voting Securities of the surviving
Person or its parent and (ii) the holders of the Voting Securities of the
Applicable Person immediately prior to such transaction own, directly or
indirectly, not less than a majority of the outstanding Voting Securities of
the surviving Person or its parent immediately after such transaction; and
(c) a “person” or “group” (within the meaning of Sections 13(d) or
14(d)(2) of the Exchange Act) (other than OSG or its Affiliates, with respect
to OSG MLP General Partner), being or becoming the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50%
of all of the 


 

















 


then
outstanding Voting Securities of the Applicable Person, except in a merger or
consolidation which would not constitute a Change of Control under
clause (b) above.


 


“Costs and
Expenses” has the meaning set forth in Section 6.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


“Limited
Partnership Agreement” means the amended and restated agreement of limited
partnership of OSG MLP dated as of [DATE], as amended, supplemented or otherwise
modified from time to time.


 


“OSG MLP General
Partner” means OSG America LLC, a Delaware limited liability company, that
is the general partner of OSG MLP and any successor general partner of OSG MLP
approved pursuant to Section 11.01 or Section 11.02 of the Limited Partnership
Agreement or the transferee of or successor to all of the general partner
interest in OSG MLP pursuant to Section 4.06 of the Limited Partnership
Agreement; provided, however, that such transferee or successor
agrees to assume the rights and duties of OSG MLP General Partner under this
Agreement and to be bound by the provisions of this Agreement;


 


“OSG MLP
Group” means OSG MLP and its subsidiaries.


 


“Parties”
means the parties to this Agreement and their successors and permitted assigns.


 


“Person”
means an individual, corporation, partnership, joint venture, trust, limited
liability company, unincorporated organization or any other entity.


 


“Services”
has the meaning set forth in Section 2.


 


“Unitholders”
means holders of units representing limited partnership interests in OSG MLP.


 


“Voting
Securities” means securities of any class of Person entitling the holders
thereof to vote in the election of members of the board of directors or other
similar governing body of the Person.


 


SECTION 2. Administrative
Services. OSGM shall provide to any member of the OSG MLP Group such of the
non-strategic administrative services set forth in Schedule A to this
Agreement (the “Services”), in a commercially reasonable manner, as OSG
MLP, may from time to time reasonably request or direct, all such Services to
be provided under the supervision of OSG MLP, as represented by OSG MLP General
Partner in its capacity as the general partner of OSG MLP.


 


SECTION 3. Covenants.
During the term of this Agreement OSGM shall:


 


(a) diligently
provide or subcontract for the provision of (in accordance with Section 19) the
Services to the OSG MLP Group as an independent 


 


2

















 


contractor,
and be responsible to OSG MLP for the due and proper performance of same;


 


(b) retain at
all times a qualified staff so as to maintain a level of expertise sufficient
to provide the Services; and


 


(c) keep full
and proper books, records and accounts showing clearly all transactions
relating to its provision of the Services in accordance with established
general commercial practices and in accordance with United States generally
accepted accounting principles, and allow OSG MLP and its representatives to
audit and examine such books, records and accounts at any time during customary
business hours.


 


SECTION 4. Non-exclusivity.
OSGM and its employees may provide services of a nature similar to the
Services to any other Person. There is no obligation for OSGM to provide the
Services to the OSG MLP Group on an exclusive basis.


 


SECTION 5. Confidential
Information. OSGM shall be obligated to keep confidential, both during and
after the term of this Agreement, all information it has acquired or developed
in the course of providing Services under this Agreement. OSGM MLP shall be
entitled to any equitable remedy available at law or equity, including specific
performance, against a breach by OSGM of this obligation. OSGM shall not resist
such application for relief on the basis that OSG MLP has an adequate remedy at
law, and OSGM shall waive any requirement for the securing or posting of any
bond in connection with such remedy.


 


SECTION 6. Reimbursement
of Costs and Expenses. In consideration for OSGM providing the Services, OSG
MLP shall reimburse OSGM the costs and expenses set forth in Schedule B
to this Agreement (the “Costs and Expenses”) in the manner provided in Schedule B
to this Agreement.


 


SECTION 7. General
Relationship between the Parties. The relationship between the Parties is
that of independent contractor. The Parties to this Agreement do not intend,
and nothing herein shall be interpreted so as, to create a partnership, joint
venture, employee or agency relationship between OSGM and any one or more of OSG
MLP, OSG MLP General Partner in its capacity as general partner on behalf of OSG
MLP or any member of the OSG MLP Group.


 


SECTION 8. Indemnity.
OSG MLP shall indemnify and hold harmless OSGM and its directors, officers,
employees and agents against all actions, proceedings, claims, demands or
liabilities which may be brought against them due to this Agreement including,
without limitation, all actions, proceedings, claims, demands or liabilities
brought under the environmental laws of any jurisdiction, and against and in
respect of all costs and expenses (including legal costs and expenses on a full
indemnity basis) they may suffer or incur due to defending or settling same; provided,
however that such indemnity shall exclude any or all losses, actions,
proceedings, claims, demands, costs, 


 


3

















 


damages,
expenses and liabilities whatsoever which may be caused by or due to the gross
negligence or willful misconduct of OSGM or its employees or agents.


 


SECTION 9. Consequential
Damages. NEITHER OSGM NOR ANY OF ITS AFFILIATES SHALL BE LIABLE FOR ANY
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY ANY MEMBER OF THE OSG
MLP GROUP, OR FOR PUNITIVE DAMAGES, WITH RESPECT TO ANY TERM OR THE SUBJECT
MATTER OF THIS AGREEMENT, EVEN IF INFORMED OF THE POSSIBILITY THEREOF IN ADVANCE.
THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION, INCLUDING, WITHOUT LIMITATION,
BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, FRAUD,
MISREPRESENTATION AND OTHER TORTS.


 


SECTION 10. Term
and Termination. This Agreement shall commence as of the date first above
written and shall continue for successive one year terms unless terminated by
either Party hereto on not less than 60 days’ notice prior to the end of the
then current term. Notwithstanding the foregoing a Party may terminate this
Agreement at any time if:


 


(a) in the case of OSG MLP, there is a Change
of Control of OSGM and in the case of OSGM, if there is a Change of Control
of OSG MLP;


 


(b) the other
Party breaches this Agreement;


 


(c) a receiver
is appointed for all or substantially all of the property of the other Party;


 


(d) an order
is made to wind-up the other Party;


 


(e) a final
judgment, order or decree which materially and adversely affects the ability of
the other Party to perform this Agreement shall have been obtained or entered
against that Party and such judgment, order or decree shall not have been
vacated, discharged or stayed; or


 


(f) the other
Party makes a general assignment for the benefit of its creditors, files a
petition in bankruptcy or for liquidation, is adjudged insolvent or bankrupt,
commences any proceeding for a reorganization or arrangement of debts,
dissolution or liquidation under any law or statute or of any jurisdiction
applicable thereto or if any such proceeding shall be commenced.


 


SECTION 11. Costs
and Expenses Upon Termination. Upon termination of this Agreement in
accordance with Section 10, OSG MLP shall be obligated to pay OSGM any and all
amounts payable pursuant to Section 6 for Services provided prior to the time
of termination.


 


SECTION 12. Surrender
of Books and Records. Upon termination of this Agreement, OSGM shall
forthwith surrender to OSG MLP any and all books, records, documents and other
property in the possession or control of OSGM relating to this 


 


4

















 


Agreement and
to the business or affairs of OSG MLP and any member of the OSG MLP Group and, except
as required by law, shall not retain any copies of same.


 


SECTION 13. Force
Majeure. Neither party shall be liable for any failure to perform this
Agreement due to any cause beyond its reasonable control.


 


SECTION 14. Entire
Agreement. This Agreement constitutes the entire agreement of the Parties
relating to the matters contained herein, superseding all prior contracts or
agreements, whether oral or written, relating to the matters contained herein.


 


SECTION 15. Severability.
If any provision of this Agreement (or any portion thereof) or the
application of any such provision (or any portion thereof) to any Person or
circumstance shall be held invalid, illegal or unenforceable in any respect by
a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof (or the remaining
portion thereof) or the application of such provision to any other Persons or
circumstances.


 


SECTION 16. Currency.
Unless stated otherwise, all currency references herein are to United
States Dollars.


 


SECTION 17. Choice
of Law; Submission to Jurisdiction. This Agreement shall be subject to and
governed by the laws of the State of New York, without regard to any
conflicts-of-law rule or principle that might refer the construction or
interpretation of this Agreement to the laws of another jurisdiction. Each
Party hereby submits to the jurisdiction of the state and Federal courts
located in the State of New York and to venue in New York, New York.


 


SECTION 18. Notice.
All notices or other communications required or permitted to be given
hereunder shall be in writing and shall be delivered by hand or sent by
facsimile or sent, postage prepaid, by registered, certified or express mail or
overnight courier service and shall be deemed given when so delivered by hand
or facsimile, or if mailed, three days after mailing (one business day in the
case of express mail or overnight courier service) to the Parties at the
following addresses (or at such other address for a Party as shall be specified
by like notice):


 


	
   

  	
  (a) if to OSGM:

  
	
   

  	
   

  
	
   

  	
   

  	
  Overseas Shipping Group, Inc.

  
	
   

  	
   

  	
  666 Third Avenue

  
	
   

  	
   

  	
  New York, NY 10017

  
	
   

  	
   

  	
  Attention: Chief Financial Officer

  
	
   

  	
   

  	
  Facsimile: (212) 578 1832

  
	
   

  	
   

  
	
   

  	
  (b) if to OSG MLP:

  
	
   

  	
   

  
	
   

  	
   

  	
  OSG America L.P.

  
	
   

  	
   

  	
  Two Harbour Place

  
	
   

  	
   

  	
  302 Knights Run Avenue

  



 


5

















 


	
   

  	
   

  	
  Suite 1200

  
	
   

  	
   

  	
  Tampa, FL 33602

  
	
   

  	
   

  	
  Attention: Chief Executive Officer

  
	
   

  	
   

  	
  Facsimile:

  



 


 


SECTION 19. Subcontracting
and Assignment. OSGM shall not assign this Agreement to any Person that is
not a subsidiary or Affiliate of OSGM except upon written consent of OSG MLP. OSGM
may freely subcontract or sublicense its obligations to provide any Service
under this Agreement, so long as OSGM remains liable for performance of the
Services and its obligations under this Agreement.


 


SECTION 20. Amendments;
Waivers. (a) No provision of this Agreement may be amended or waived unless
such amendment or waiver is in writing and signed, in the case of an amendment,
by the Parties hereto, or in the case of a waiver, by the Party against whom
the waiver is to be effective; provided, however, that after the
completion of OSG MLP’s initial public offering of common units representing
limited partner interests, OSG MLP may not, without the prior approval of the
conflicts committee of the board of directors of the OSG MLP General Partner
or, if there is no such committee, the independent members of such board of
directors, agree to any amendment or modification of this Agreement that the
OSG MLP General Partner determines will adversely affect the holders of such
common units. The Parties hereto agree that, for purposes of this Section 20,
any material change in the nature, quantity or duration of the Services to be
provided under this Agreement shall constitute a modification of this Agreement.


 


(b) The
failure of any Party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of such rights nor shall
any single or partial exercise by any Party to this Agreement of any of its
rights under this Agreement preclude any other or further exercise of such
rights or remedies under this Agreement. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law or otherwise.


 


SECTION 21. Counterparts.
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more such counterparts have been signed by each of the Parties and
delivered to the other Party.


 


[Signature Page follows]


 


6

















 


IN WITNESS
WHEREOF, the Parties have executed this Agreement on, and effective as of, the
date first written above.


 


	
   

  	
  OSG AMERICA L.P.,

  
	
   

  	
   

  
	
   

  	
        by OSG
  AMERICA LLC, its general partner,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OSG SHIP MANAGEMENT, INC.,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
    Name:

  
	
   

  	
   

  	
    Title:

  



 

















 


SCHEDULE A


 


 


Services


 


OSGM shall
provide such of the following Services to any member of the OSG MLP Group, as OSG
MLP General Partner may from time to time request and direct OSGM to provide
pursuant to Section 2:


 


(a)                                 keep
and maintain at all times books, records and accounts which shall contain
particulars of receipts and disbursements relating to the assets and
liabilities of the OSG MLP Group, which books, records and accounts shall be
kept and maintained in accordance with normal commercial practices that will
permit any member of the OSG MLP Group to prepare or cause to be prepared
financial statements in accordance with U.S. generally accepted accounting
principles, and keep and maintain at all times such additional books, records
and accounts as the OSG MLP Group is required to keep and maintain under
applicable U.S. federal securities laws and regulations and the Internal
Revenue Code of 1986 and related regulations, all as amended from time to time;


 


(b)                                 prepare
all returns, filings and documents that OSG MLP is required to prepare pursuant
to the Limited Partnership Agreement or that are otherwise necessary or
desirable in connection with the conduct of OSG MLP Group’s business, in each
case, for the review and approval of OSG MLP; and after such returns, filings
and documents have been reviewed and approved by OSG MLP, file such returns,
filings and documents, as applicable, with the relevant authority;


 


(c)                                  advise,
or arrange for the provision of advice, as to OSG MLP’s obligations under
applicable U.S. securities laws and regulations, including its continuous
disclosure obligations under applicable U.S. securities laws and regulations
and the rules and regulations of the New York Stock Exchange and any other
securities exchange upon which OSG MLP’s securities are listed or otherwise
admitted for trading; prepare all reports and documents that OSG MLP is
required to prepare pursuant to such laws, rules and regulations or that are
otherwise necessary or desirable, in each case, for the review and approval of
OSG MLP; and after such reports and documents have been reviewed and approved
by OSG MLP, file, disseminate, post on the Internet, mail or otherwise
distribute such reports and documents, as OSG MLP may request or direct; provided,
however, that nothing herein shall permit or authorize OSGM to act for
or on behalf of OSG MLP in dealing with any regulatory authority, except to the
extent specifically authorized by OSG MLP;


 


(d)                                 provide,
or arrange for the provision of, investor relations services to Unitholders and
financial markets; provided, however, that nothing herein 


 


A-1





















 


shall permit
or authorize OSGM to determine the content of any communication by OSG MLP with
its Unitholders or the financial markets;


 


(e)                                  provide,
or arrange for the provision of, all administrative matters in respect of (i)
the calling and arranging all meetings of Unitholders pursuant to the Limited
Partnership Agreement, (ii) the preparation of any materials (including notices
of meetings and information circulars) in respect thereof for the review and
approval of OSG MLP and (iii) after such materials have been reviewed and
approved by OSG MLP, the filing, posting on the Internet, mailing or other distribution
of such materials as OSG MLP may request or direct;


 


(f)                                   provide,
or arrange for the provision of, such audit, internal audit, accounting,
engineering, legal, insurance and other professional services as may be
necessary or desirable for the conduct of the OSG MLP Group’s business; provided,
however, that nothing herein shall authorize or permit OSGM to select
and appoint the auditor of OSG MLP, which shall be selected and appointed in
accordance with the provisions of the Limited Partnership Agreement for the
appointment of the auditor of OSG MLP or as otherwise required by applicable law,
or to communicate with the auditor other than in the ordinary course of making
such books and records of OSG MLP available for review as the auditor may
require and to respond to queries from the auditor with respect to the accounts
and statements prepared by, or the preparation of which were arranged by, OSGM,
and in particular OSGM will not have any of the authorities, rights or responsibilities
of the audit committee of OSG MLP General Partner, but shall provide, or
arrange for the provision of, information to such committee as may from time to
time be required or requested; provided, further, however,
that nothing herein shall entitle OSGM to retain legal counsel for the OSG MLP Group
unless such selection is specifically approved by OSG MLP;


 


(g)                                  provide,
or arrange for the provision of, administrative, advisory, arrangement,
negotiation, documentation, compliance or monitoring services in connection
with any new or existing financing for OSG MLP, including any interest rate
swap agreements, foreign currency contracts, forward exchange contracts and any
other hedging arrangements;


 


(h)                                 provide,
or arrange for the provision of, administrative, advisory, negotiation or
documentation services in connection any acquisition or divestment of any asset
of the OSG MLP;


 


(i)                                     provide,
or arrange for the provision of, administrative, advisory, negotiation or documentation
services in connection with any offering of securities by OSG MLP;


 


A-2

















 


(j)                                    prepare
and provide, or arrange for the preparation and provision of, regular cash
reports and other accounting information for review by OSG MLP, so as to permit
and enable OSG MLP to make all determinations of financial matters required to
be made pursuant to the Limited Partnership Agreement, including the
determination of amounts available for distribution by OSG MLP to its
Unitholders, and to assist OSG MLP in making arrangements with the transfer
agent for OSG MLP for the payment of distributions to the Unitholders in
accordance with the Limited Partnership Agreement;


 


(k)                                 provide
such assistance to OSG MLP as OSG MLP may request or direct with respect to the
performance of the obligations to the Unitholders under the Limited Partnership
Agreement and to provide monitoring of various obligations and rights under
agreements entered into by OSG MLP and provide advance reports on a timely
basis to OSG MLP advising of steps, procedures and compliance issues under such
agreements, so as to enable OSG MLP, through OSG MLP General Partner, to make
all such decisions as would be necessary or desirable thereunder; and


 


(l)                                     provide,
or arrange for the provision of,  such
additional administrative services pertaining to the OSG MLP Group, the assets
and liabilities of the OSG MLP Group or the Unitholders and matters incidental
thereto as may be reasonably requested by OSG MLP from time to time.


 


A-3





















 


SCHEDULE B


 


Costs and Expenses


 


Within 30 days
after the end of each month, OSGM shall submit to OSG MLP for payment an
invoice for reimbursement of all costs and expenses reasonably incurred by OSGM
(the “Costs and Expenses”) in connection with the provision of the
Services listed in Schedule A by OSGM to the OSG MLP Group for such month. Each
statement will contain such supporting detail as may be reasonably required to
validate such amounts due.


 


OSG MLP shall
make payment within 15 days of the date of each invoice (any such day on which
a payment is due, the “Due Date”). All invoices for Services are payable
in U.S. dollars. All amounts not paid within 10 days after the Due Date shall
bear interest at the rate of 1.00% per annum over US$ LIBOR from such Due Date
until the date payment is received in full by OSGM.


 


Without
limiting the foregoing, Costs and Expenses shall include all fees from third
parties for providing Services and OSGM’s internal costs for providing general
administrative Services, such as the costs of OSGM’s internal lawyers,
accountants, and finance, information technology and human resource personnel. OSGM
may, in its sole discretion, decide not to be reimbursed for the full amount of
the internal costs for providing such Services, but the exercise of such
discretion shall not affect or modify OSGM’s right to be reimbursed the full
amount of the costs of Services provided after the exercise of such discretion.


 


 


B-1