Exhibit 10.6


 


DIRECTOR AND OFFICER INDEMNITY
AGREEMENT


 


This agreement
(the “Agreement”) is made and entered into as of the        
day of                  ,
2007, by and between OSG America L.P., a Delaware limited partnership (the “Partnership”),
and [Name], (the “Indemnitee”).


 


RECITALS


 


A.            The Indemnitee is an [Office] of 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 an [Office] 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 


 

















 


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

  	
   

  
	
   

  	
  Myles R.
  Itkin

  
	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Indemnitee]

  



 


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