**Exhibit 1.1**

 

***EXECUTION VERSION***

 

**OSG A****MERICA****L.P.**

 

**7,500,000Common UnitsRepresenting Limited Partner Interests**

 

**UnderwritingAgreement**

 

New York, New YorkNovember 8, 2007

 

CITIGROUP GLOBAL MARKETS INC. UBS SECURITIES LLCAs Representatives of the several Underwriters

 

c/o Citigroup Global Markets Inc. 388 Greenwich Street New York, New York 10013

 

Ladies and Gentlemen:

 

OSG America L.P., a limited partnershiporganized under the laws of Delaware (the “Partnership”), proposes tosell to the several underwriters named in Schedule I hereto (the “Underwriters”),for whom you (the “Representatives”) are acting as representatives,7,500,000 common units representing limited partner interests in thePartnership (“Common Units”) (said Common Units to be issued and sold bythe Partnership being hereinafter called the “Underwritten Securities”).The Partnership also proposes to grant to the Underwriters an option topurchase up to 1,125,000 additional Common Units to cover over-allotments, ifany (the “Option Securities”; the Option Securities, together with theUnderwritten Securities, being hereinafter called the “Securities”). Tothe extent there are no additional Underwriters listed on Schedule Iother than you, the term Representatives as used herein shall mean you, asUnderwriters, and the terms Representatives and Underwriters shall mean eitherthe singular or plural as the context requires. Certain terms used herein aredefined in Section 20 hereof.

 

This is to confirm the agreement among thePartnership, OSG America LLC, a Delaware limited liability company and generalpartner of the Partnership (the “General Partner”), OSG Bulk Ships, Inc.,a New York corporation and direct parent of the General Partner (“OSG BulkShips”), OSGAMLP One Percent Interest Corporation, a Delaware corporationand wholly owned subsidiary of OSG Bulk Ships (“One Percent”), OSG ShipManagement, Inc., a Delaware corporation and wholly owned subsidiary ofOSG (as defined herein) (“OSGM”), and Overseas Shipholding Group, Inc.,a Delaware corporation and the ultimate parent of each of the General Partner,OSG Bulk Ships, OSGM and One Percent (“OSG” and, together with thePartnership, the General Partner, OSG Bulk Ships, OSGM and One Percent, the “PartnershipParties”), and the Underwriters concerning the purchase of the Securitiesfrom the Partnership by the Underwriters. It is understood and agreed to by allparties hereto that the Partnership was formed by OSG to, among other things (i) acquireall of the outstanding limited liability

 

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company interests of certain subsidiaries of OSGBulk Ships that own or operate certain U.S. flag product carriers and bargesused to provide marine transportation, distribution and logistics services forthe transportation of crude oil and refined petroleum products and (ii) acquirefrom OSGM 37.5% of the outstanding limited liability company interests ofAlaska Tanker Company, LLC, a Delaware limited liability company (“ATC”),as more particularly described in the Disclosure Package and the Prospectus.

 

It is further understood and agreed by allparties that as of the date hereof:

 

A.            OSG Bulk Ships directly owns (i) 100% of thelimited liability company interests of each of the General Partner and OSGAmerica Operating Company LLC, a Delaware limited liability company (the “OperatingCompany”), (ii) 100% of the outstanding capital stock of One Percentand (iii) a limited partner interest representing a 97% interest in thePartnership.

 

B.            One Percent directly owns a limited partner interestrepresenting a 1% interest in the Partnership.

 

C.            The General Partner directly owns a general partnerinterest representing a 2% interest in the Partnership.

 

D.            The Partnership directly owns 100% of the limitedliability company interests in each of Luxmar Tanker LLC and Maremar Tanker LLC(collectively, the “Initial Operating Subsidiaries” and each, an “InitialOperating Subsidiary”).

 

E.             The Operating Company directly owns 100% of thelimited liability company interests of each of the vessel-owning subsidiarieslisted on Schedule II to this Agreement (collectively, the “ClosingDate Operating Subsidiaries” and each, a “Closing Date OperatingSubsidiary”).

 

F.             The Operating Company directly owns 100% of thelimited liability company interests of each of the subsidiaries listed on Schedule IIIto this Agreement (collectively, the “Newbuilding Subsidiaries” andeach, a “Newbuilding Subsidiary”).

 

G.            The Operating Company directly owns 100% of thelimited liability company interests of OSG Product Tankers Member LLC, a Delawarelimited liability company, OSG Product Tankers Member LLC directly owns 85% ofthe limited liability company interests of OSG Product Tankers II, LLC, aDelaware limited liability company, OSG Product Tankers II, LLC directly owns80% of the limited liability company interests of OSG Product Tankers I, LLC, aDelaware limited liability company, OSG Product Tankers I, LLC directly owns75% of the limited liability company interests of OSG Product Tankers, LLC, aDelaware limited liability company, the Operating Company directly owns 100% ofthe limited liability company interests of OSG Shuttle Tankers Member (Chinook)LLC, a Delaware limited liability company, OSG Shuttle Tankers Member (Chinook)LLC directly owns 85% of the limited liability company interests of OSG ShuttleTankers Chinook II, LLC, a Delaware limited liability company, OSG ShuttleTankers Chinook II, LLC directly owns 80% of the limited liability companyinterests of OSG Shuttle Tankers Chinook I, LLC, a Delaware limited liability companyand OSG Shuttle Tankers Chinook I, LLC directly owns 75% of the limitedliability company interests of OSG Shuttle Tankers Chinook, LLC, a Delawarelimited liability company 

 

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(OSG Product Tankers Member LLC, OSG Product TankersII, LLC, OSG Product Tankers I, LLC, OSG Product Tankers LLC, OSG ShuttleTankers Member (Chinook) LLC, OSG Shuttle Tankers Chinook II, LLC, OSG ShuttleTankers Chinook I, LLC and OSG Shuttle Tankers Chinook, LLC collectively, the “OSG/AkerTime Charterer Subsidiaries” and each, an “OSG/Aker Time ChartererSubsidiary”).

 

Immediately prior to the Closing Date, OSGBulk Ships, OSGM, One Percent, the General Partner and the Partnership willenter into an Amended and Restated Contribution, Conveyance and AssumptionAgreement dated as of the Closing Date (the “Contribution Agreement”).The transactions to be effected pursuant to the Contribution Documents (asdefined in the following sentence) and this Agreement, including withoutlimitation the public offering of the Securities as described in the DisclosurePackage and the Prospectus, are referred to as the “Transactions”. Inconnection with the Transactions, the parties to the Transactions have enteredinto or will enter into various conveyances, agreements and related documents (collectivelywith the Contribution Agreement, the “Contribution Documents”) pursuantto which on or prior to the Closing Date:

 

A.            OSG Bulk Ships, on behalf of itself, One Percent andthe General Partner will transfer 100% of the limited liability companyinterests of the Operating Company to the Partnership, and as considerationtherefor and the transfer by OSG Bulk Ships, on behalf of itself, One Percentand the General Partner of 100% of the limited liability companies interests ofeach of the Initial Operating Subsidiaries to the Partnership on August 30,2007, the Partnership will (a) (i) issue to OSG Bulk Ships 6,496,827Common Units, (ii) issue to OSG Bulk Ships 14,999,999 Subordinated Unitsand (iii) make a cash distribution to OSG Bulk Ships in an aggregateamount equal to $136,500,000, to reimburse OSG Bulk Ships for certainpreformation capital expenditures in respect of Overseas Luxmar, OverseasMaremar and certain other vessels being transferred to the Partnership (the “ReimbursementPayment”), (b) issue to One Percent 277,413 Common Units and (c) (i) issueto the General Partner the Incentive Distribution Rights (as defined in thePartnership Agreement) and (ii) issue to the General Partner 612,244General Partner Units (as defined in the Partnership Agreement).

 

B.            OSGM will convey 37.5% of the limited liabilitycompany interests of ATC (the “ATC Interest”) to the Partnership, and asconsideration therefor, the Partnership will issue to OSGM 725,759 CommonUnits.

 

C.            OSG Bulk Ship’s limited partner interestrepresenting a 97% interest in the Partnership, prior to the execution of thisAgreement, will be converted into one Subordinated Unit.

 

D.            One Percent’s limited partner interest representinga 1% interest in the Partnership, prior to the execution of this Agreement,will be converted into one Common Unit.

 

E.             The GeneralPartner’s general partner interest representing a 2% interest in thePartnership, prior to the execution of this Agreement, will be converted intoone General Partner Unit.

 

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F.             The Partnership will transfer the ATC Interest andthe Initial Operating Subsidiaries to the Operating Company.

 

In addition, immediately prior to or atClosing:

 

A.            OSG, the General Partner, the Partnership and theOperating Company will enter into an Omnibus Agreement dated as of the ClosingDate (the “Omnibus Agreement”).

 

B.            The Partnership, OSGM and certain of the OperatingSubsidiaries will enter into a Management Agreement (the “ManagementAgreement”) pursuant to which OSGM will provide certain commercial andtechnical management services (including the commercial and technicalmanagement of the vessels owned by or chartered to the Operating Subsidiaries,vessel maintenance, crewing, purchasing, insurance and shipyard supervision) tothe Partnership Entities.

 

C.            The Partnership and OSGM will enter into anAdministrative Services Agreement (the “Administrative Services Agreement”)pursuant to which OSGM will provide certain administrative services to thePartnership Entities.

 

D.            The Operating Company, the Partnership and certainof the Operating Subsidiaries will enter into a $200 million revolving creditagreement dated as of the Closing Date (the “Revolving Credit Facility”).

 

E.             The General Partner, OSG Bulk Ships and One Percentwill adopt an Amended and Restated Agreement of Limited Partnership of thePartnership dated the Closing Date (as amended and/or restated on or prior tothe Closing Date, the “Partnership Agreement”).

 

F.             OSG Bulk Ships will adopt an Amended and RestatedLimited Liability Company Agreement of the General Partner dated the ClosingDate (as amended and/or restated on or prior to the Closing Date, the “GPLLC Agreement”).

 

The “Operating Subsidiaries” shallmean the Initial Operating Subsidiaries, the Closing Date OperatingSubsidiaries, the Newbuilding Subsidiaries and the OSG/Aker Time ChartererSubsidiaries.

 

The “Transaction Documents” shall meanthe Contribution Agreement, the Management Agreement, the AdministrativeServices Agreement, the Omnibus Agreement and the Revolving Credit Facility.

 

The Partnership, the General Partner, theOperating Company and each of the Operating Subsidiaries are collectivelyreferred to in this Agreement as the “Partnership Entities.”

 

1.             Representations and Warranties. Each of thePartnership Parties jointly and severally represents and warrants to, andagrees with, each Underwriter as set forth below in this Section 1.

 

(a)           ThePartnership has prepared and filed with the Commission a registration statement(File No. 333-145341) on Form S-1, including a related preliminary

 

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prospectus, for registration under the Act of theoffering and sale of the Securities. Such Registration Statement, including anyamendments thereto filed prior to the Execution Time, has become effective. ThePartnership has filed one or more amendments thereto, including a relatedpreliminary prospectus, each of which has previously been furnished to you. ThePartnership will file with the Commission a final prospectus in accordance withRule 424(b). As filed, such final prospectus shall contain all informationrequired by the Act and the rules thereunder and, except to the extent theRepresentatives shall agree in writing to a modification, shall be in allsubstantive respects in the form furnished to you prior to the ExecutionTime or, to the extent not completed at the Execution Time, shall contain onlysuch specific additional information and other changes (beyond that containedin the latest Preliminary Prospectus) as the Partnership has advised you, priorto the Execution Time, will be included or made therein.

 

(b)           Onthe Effective Date, the Registration Statement did, and when the Prospectus isfirst filed in accordance with Rule 424(b) and on the Closing Date(as defined herein) and on any date on which Option Securities are purchased,if such date is not the Closing Date (a “settlement date”), theProspectus (and any supplement thereto) will, comply in all material respectswith the applicable requirements of the Act and the rules thereunder; onthe Effective Date and at the Execution Time, the Registration Statement didnot and will not contain any untrue statement of a material fact or omit tostate any material fact required to be stated therein or necessary in order tomake the statements therein not misleading; and on the date of any filingpursuant to Rule 424(b) and on the Closing Date and any settlementdate, the Prospectus (together with any supplement thereto) will not includeany untrue statement of a material fact or omit to state a material fact necessaryin order to make the statements therein, in the light of the circumstancesunder which they were made, not misleading; provided, however,that the Partnership Parties make no representations or warranties as to theinformation contained in or omitted from the Registration Statement, or theProspectus (or any supplement thereto) in reliance upon and in conformity withinformation furnished in writing to the Partnership by or on behalf of anyUnderwriter through the Representatives specifically for inclusion in theRegistration Statement or the Prospectus (or any supplement thereto), it beingunderstood and agreed that the only such information furnished by anyUnderwriter consists of the information described as such in Section 8(b) hereof.

 

(c)           Asof the Execution Time, the Disclosure Package and the price to the public, thenumber of Underwritten Securities and the number of Option Securities to beincluded on the cover page of the Prospectus, when taken together as awhole, did not contain any untrue statement of a material fact or omit to stateany material fact necessary in order to make the statements therein, in thelight of the circumstances under which they were made, not misleading. Thepreceding sentence does not apply to statements in or omissions from theDisclosure Package based upon and in conformity with written informationfurnished to the Partnership by any Underwriter through the Representativesspecifically for use therein, it being understood and agreed that the only suchinformation furnished by or on behalf of any Underwriter consists of theinformation described as such in Section 8(b) hereof.

 

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(d)           (i) Atthe time of filing the Registration Statement and (ii) as of the ExecutionTime (with such date being used as the determination date for purposes of thisclause (ii)), the Partnership was not and is not an Ineligible Issuer (asdefined in Rule 405), without taking account of any determination by theCommission pursuant to Rule 405 that it is not necessary that thePartnership be considered an Ineligible Issuer.

 

(e)           EachIssuer Free Writing Prospectus does not include any information that conflictswith the information contained in the Registration Statement. The foregoingsentence does not apply to statements in or omissions from any Issuer FreeWriting Prospectus based upon and in conformity with written informationfurnished to the Partnership by any Underwriter through the Representativesspecifically for use therein, it being understood and agreed that the only suchinformation furnished by or on behalf of any Underwriter consists of theinformation described as such in Section 8(b) hereof.

 

(f)            ThePartnership has been duly formed and is validly existing as a limitedpartnership in good standing under the Delaware Revised Uniform LimitedPartnership Act (the “Delaware LP Act”), with full partnership power andauthority to own or lease, as the case may be, and to operate itsproperties and conduct its business as described in the Disclosure Package andthe Prospectus, and is duly registered or qualified to do business as a foreignlimited partnership and is in good standing under the laws of each jurisdictionwherein it owns or leases material properties or conducts material business andwhere the failure to be so qualified would, individually or in the aggregate, (i) havea material adverse effect on the condition (financial or otherwise), prospects,earnings, business or properties of the Partnership Entities, taken as a whole,whether or not arising from transactions in the ordinary course of business (“MaterialAdverse Effect”), or (ii) subject the limited partners of thePartnership to any material liability or disability.

 

(g)           Eachof the General Partner, the Operating Company, each Operating Subsidiary andATC (collectively, the “Limited Liability Companies”) has been dulyformed and is validly existing as a limited liability company in good standingunder the Delaware Limited Liability Company Act (the “Delaware LLC Act”),with full limited liability company power and authority to own or lease, as thecase may be, and to operate its properties and conduct its business asdescribed in the Disclosure Package and the Prospectus, and, in the case of theGeneral Partner, to act as the general partner of the Partnership. Each of theLimited Liability Companies is duly registered or qualified to do business as aforeign limited liability company and is in good standing under the laws ofeach jurisdiction wherein it owns or leases material properties or conductsmaterial business and where the failure to be so qualified would, individuallyor in the aggregate, (i) have a Material Adverse Effect, or (ii) subjectthe limited partners of the Partnership to any material liability ordisability.

 

(h)           OSGBulk Ships is the sole member of the General Partner and owns 100% of thelimited liability company interests of the General Partner; such limitedliability company interests have been duly authorized and validly issued inaccordance with the GP LLC Agreement; and OSG Bulk Ships owns such limitedliability company interests free and clear of all security interests, liens,claims or encumbrances (collectively “Liens”).

 

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(i)            Onthe Closing Date and any settlement date, after giving effect to theTransactions, the General Partner will be the sole general partner of thePartnership and will own 612,245 General Partner Units representing anapproximate 2% interest in the Partnership (the “GP Interest”); such GPInterest will have been duly authorized and validly issued in accordance withthe Partnership Agreement, and the General Partner will own such GP Interestfree and clear of all Liens (except restrictions on transferability containedin the Partnership Agreement, as described in the Disclosure Package and theProspectus, or under applicable securities laws).

 

(j)            Onthe Closing Date and any settlement date, after giving effect to theTransactions, the General Partner will own the Incentive Distribution Rightsand the limited partner interests represented thereby will have been dulyauthorized and validly issued in accordance with the Partnership Agreement, andwill be fully paid (to the extent required under the Partnership Agreement) andnonassessable (except as such nonassessability may be affected by Sections17-303, 17-607 and 17-804 of the Delaware LP Act); and the General Partner willown all of the Incentive Distribution Rights free and clear of all Liens(except restrictions on transferability contained in the Partnership Agreement,as described in the Disclosure Package and the Prospectus, or under applicablesecurities laws).

 

(k)           Onthe Closing Date, after giving effect to the Transactions, OSG Bulk Ships willown an aggregate of 6,496,827 Common Units and 15,000,000 Subordinated Units,representing in the aggregate an approximate 70.22% interest in the Partnership(collectively, the “OSG Bulk Ships Sponsor Units”). On the Closing Dateand any settlement date, all of the OSG Bulk Ships Sponsor Units and thelimited partner interests represented thereby will have been duly authorized andvalidly issued in accordance with the Partnership Agreement, and will be fullypaid (to the extent required under the Partnership Agreement) and nonassessable(except as such nonassessability may be affected by Sections 17-303,17-607 and 17-804 of the Delaware LP Act); and OSG Bulk Ships will own the OSGBulk Ships Sponsor Units, free and clear of all Liens (except restrictions ontransferability contained in the Partnership Agreement, as described in theDisclosure Package and the Prospectus, or under applicable securities laws).

 

(l)            Onthe Closing Date, after giving effect to the Transactions, OSGM will own anaggregate of 725,759 Common Units, representing in the aggregate an approximate2.37% interest in the Partnership (the “OSGM Sponsor Units”). On theClosing Date and any settlement date, all of the OSGM Sponsor Units and thelimited partner interests represented thereby will have been duly authorizedand validly issued in accordance with the Partnership Agreement, and will befully paid (to the extent required under the Partnership Agreement) andnonassessable (except as such nonassessability may be affected by Sections17-303, 17-607 and 17-804 of the Delaware LP Act); and OSGM will own the OSGMSponsor Units, free and clear of all Liens (except restrictions ontransferability contained in the Partnership Agreement, as described in theDisclosure Package and the Prospectus, or under applicable securities laws).

 

(m)          Onthe Closing Date, after giving effect to the Transactions, One Percent will ownan aggregate of 277,414 Common Units, representing in the aggregate an

 

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approximate 0.91% interest in the Partnership (the “OnePercent Sponsor Units”). On the Closing Date and any settlement date, theOne Percent Sponsor Units and the limited partner interests represented therebywill have been duly authorized and validly issued in accordance with thePartnership Agreement, and will be fully paid (to the extent required under thePartnership Agreement) and nonassessable (except as such nonassessability may beaffected by Sections 17-303, 17-607 and 17-804 of the Delaware LP Act); and OnePercent will own the One Percent Sponsor Units, free and clear of any Liens(except restrictions on transferability contained in the Partnership Agreement,as described in the Disclosure Package and the Prospectus, or under applicablesecurities laws).

 

(n)           Onthe Closing Date and any settlement date, after giving effect to theTransactions, the Partnership will be the sole member of the Operating Companyand will own 100% of the limited liability company interests of the OperatingCompany; such limited liability company interests will have been dulyauthorized and validly issued in accordance with the limited liability companyagreement of the Operating Company (as amended and/or restated on or prior tothe Closing Date, the “Opco LLC Agreement”) and will be fully paid (tothe extent required under the Opco LLC Agreement) and nonassessable (except assuch nonassessability may be affected by Section 18-607 of theDelaware LLC Act); and the Partnership will own such limited liability companyinterests free and clear of all Liens

 

(o)           Onthe Closing Date and any settlement date, after giving effect to theTransactions, the Operating Company will be the sole member of each of theOperating Subsidiaries (except for the OSG/Aker Time Charterer Subsidiariesother than OSG Product Tankers Member LLC and OSG Shuttle Tankers Member(Chinook) LLC) and will own 100% of the limited liability company interests ineach such limited liability company; such limited liability company interestswill have been duly authorized and validly issued in accordance with thelimited liability company agreement of each such Operating Subsidiary (asamended and/or restated on or prior to the Closing Date, each an “OperatingSubsidiary LLC Agreement”) and with respect to each such limited liabilitycompany will be fully paid (to the extent required under the applicableOperating Subsidiary LLC Agreement) and nonassessable (except as suchnonassessability may be affected by Sections 18-607 and 18-804 of theDelaware LLC Act); and the Operating Company will own such limited liabilitiescompany interests free and clear of all Liens.

 

(p)           Onthe Closing Date and any settlement date, after giving effect to the Transactions,the Operating Company will be the sole member of each of OSG Product TankersMember LLC and OSG Shuttle Tankers Member (Chinook) LLC and will own 100% ofthe limited liability company interests in each such limited liability company;on the Closing Date and any settlement date, such limited liability companyinterests will have been duly authorized and validly issued in accordance withthe limited liability agreement of each of OSG Product Tankers Member LLC andOSG Shuttle Tankers Member (Chinook) LLC (as amended and/or restated on orprior to the Closing Date, each a “100% OSG/Aker Time Charterer SubsidiaryLLC Agreement”) and will be fully paid (to the extent required under theapplicable 100% OSG/Aker Time Charterer Subsidiary LLC Agreement) andnonassessable (except as such nonassessability may be affected by Section 18-607and 18-804 of the Delaware LLC Act); and the Operating

 

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Company will own such limited liability companyinterests free and clear of all Liens (except restrictions on transferabilitycontained in the applicable 100% OSG/Aker Time Charterer Subsidiary LLCAgreement or under applicable securities laws).

 

(q)           OSGProduct Tankers Member LLC owns 85% of the limited liability company interestsin OSG Products Tankers II, LLC and OSG Shuttle Tankers Member (Chinook) LLCowns 85% of the limited liability company interests in OSG Shuttle TankersChinook II, LLC; such limited liability company interests have been dulyauthorized and validly issued in accordance with the limited liabilityagreement of each of OSG Product Tankers II, LLC and OSG Shuttle TankersChinook II, LLC (as amended and/or restated on or prior to the Closing Date,each a “85% OSG/Aker Time Charterer Subsidiary LLC Agreement”) and arefully paid (to the extent required under the applicable 85% OSG/Aker TimeCharterer Subsidiary LLC Agreement) and nonassessable (except as suchnonassessability may be affected by Sections 18-607 and 18-804 of theDelaware LLC Act); and OSG Product Tankers Member, LLC or OSG Shuttle TankersMember (Chinook) LLC, as applicable, owns such limited liability companyinterests free and clear of all Liens (except restrictions on transferabilitycontained in the applicable 85% OSG/Aker Time Charterer Subsidiary LLCAgreement or under applicable securities laws).

 

(r)            OSGProduct Tankers II, LLC owns 80% of the limited liability company interests inOSG Product Tankers I, LLC and OSG Shuttle Tankers Chinook II, LLC owns 80% ofthe limited liability company interests in OSG Shuttle Tankers Chinook I, LLC;such limited liability company interests have been duly authorized and validlyissued in accordance with the limited liability company agreement of each ofOSG Product Tankers I, LLC and OSG Shuttle Tankers Chinook I, LLC (as amendedand/or restated on or prior to the Closing Date, each a “80% OSG/Aker TimeCharterer Subsidiary LLC Agreement”) and are fully paid (to the extentrequired under the applicable 80% OSG/Aker Time Charterer Subsidiary LLCAgreement) and nonassessable (except as such nonassessability may beaffected by Sections 18-607 and 18-804 of the Delaware LLC Act); and OSGProduct Tankers II, LLC or OSG Shuttle Tankers Chinook II, LLC, as applicable,owns such limited liability company interests free and clear of all Liens(except restrictions on transferability contained in the applicable 80%OSG/Aker Time Charterer Subsidiary LLC Agreement or under applicable securitieslaws).

 

(s)           OSGProduct Tankers I, LLC owns 75% of the limited liability company interests inOSG Product Tankers, LLC and OSG Shuttle Tankers Chinook I, LLC owns 75% of thelimited liability company interests in OSG Shuttle Tankers Chinook, LLC; suchlimited liability company interests have been duly authorized and validlyissued in accordance with the limited liability company agreement of each ofOSG Product Tankers, LLC and OSG Shuttle Tankers Chinook, LLC (as amendedand/or restated on or prior to the Closing Date, each a “75% OSG/Aker TimeCharterer Subsidiary LLC Agreement”) and are fully paid (to the extent requiredunder the applicable 75% OSG/Aker Time Charterer Subsidiary LLC Agreement) andnonassessable (except as such nonassessability may be affected by Sections18-607 and 18-804 of the Delaware Act); and OSG Product Tankers I, LLC or OSGShuttle Tankers Chinook I, LLC, as

 

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applicable, owns such limited liability companyinterests free and clear of all Liens (except restrictions on transferabilitycontained in the applicable 75% OSG/Aker Time Charterer Subsidiary LLCAgreement or under applicable securities laws).

 

(t)            Onthe Closing Date and any settlement date, after giving effect to theTransactions, the Operating Company will own 37.5% of the limited liabilitycompany interests in ATC; such limited liability company interests have beenduly authorized and validly issued in accordance with the limited liabilityagreement of ATC (as amended and/or restated on or prior to the Closing Date,the “ATC LLC Agreement”) and are fully paid (to the extent requiredunder the ATC LLC Agreement) and nonassessable (except as such nonassessabilitymay be affected by Sections 18-607 and 18-804 of the Delaware LLC Act);and the Operating Company will own such limited liability company interestsfree and clear of all Liens (except restrictions on transferability containedin the ATC LLC Agreement or under applicable securities laws).

 

(u)           Otherthan the General Partner’s ownership of the GP Interest and all of theIncentive Distribution Rights, on the Closing Date and any settlement date,after giving effect to the Transactions, the General Partner will not own,directly or indirectly, any equity or debt securities of any corporation,partnership, limited liability company, joint venture, association or otherentity. Other than (i) the Partnership’s ownership of 100% of the limitedliability company interests of the Operating Company, (ii) the OperatingCompany’s ownership of 100% of the limited liability company interests of eachof the Operating Subsidiaries, except for the OSG/Aker Time ChartererSubsidiaries (other than OSG Product Tankers Member, LLC and OSG ShuttleTankers Member (Chinook) LLC), (iii) OSG Product Tankers Member, LLC’sownership of 85% of the limited liability company interests of OSG ProductTankers II, LLC, (iv) OSG Product Tankers II, LLC’s ownership of 80% ofthe limited liability company interests of OSG Product Tankers I, LLC, (v) OSGProduct Tankers I, LLC’s ownership of 75% of the limited liability companyinterests of OSG Product Tankers, LLC, (vi) OSG Shuttle Tankers Member(Chinook) LLC’s ownership of 85% of the limited liability company interests ofOSG Shuttle Tankers Chinook II, LLC, (vii) OSG Shuttle Tankers Chinook II,LLC’s ownership of 80% of the limited liability company interests of OSGShuttle Tankers Chinook I, LLC, (viii) OSG Shuttle Tankers Chinook I, LLC’sownership of 75% of the limited liability company interests of OSG ShuttleTankers Chinook, LLC and (ix)       theOperating Company’s ownership of 37.5% of the limited liability companyinterests of ATC, on the Closing Date and any settlement date, after givingeffect to the Transactions, no Partnership Entity (other than the GeneralPartner) will own, directly or indirectly, any equity or debt securities of anycorporation, partnership, limited liability company, joint venture, associationor other entity; and none of the entities mentioned in the preceding clauses (i) through(ix), other than the Operating Company, is a “significant subsidiary” of thePartnership as such term is defined in Rule 1-02 of Regulation S-X.

 

(v)           Asof June 30, 2007, the Partnership (i) had on the consolidated basisindicated in the Disclosure Package and the Prospectus (and any amendment orsupplement thereto), and (ii) would have had, on the pro forma as adjustedbasis indicated in the Disclosure Package and the Prospectus (and any amendmentor supplement thereto) after giving effect to the offering of the UnderwrittenSecurities and the use of

 

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the net proceeds of the offering of the UnderwrittenSecurities as indicated in the Disclosure Package and the Prospectus (and anyamendment or supplement thereto), a capitalization as set forth therein.

 

(w)          TheSecurities to be sold by the Partnership to the Underwriters and the limitedpartner interests represented thereby have been duly and validly authorized inaccordance with the Partnership Agreement and, when issued and delivered to andpaid for by the Underwriters pursuant to this Agreement, will be fully paid (tothe extent required under the Partnership Agreement) and nonassessable (exceptas such nonassessability may be affected by Sections 17-303, 17-607 and17-804 of the Delaware LP Act and as otherwise described in the DisclosurePackage and the Prospectus under the captions “The PartnershipAgreement—Limited Liability” and “Risk Factors—Risks Inherent in an Investmentin Us—You may not have limited liability if a court finds that unitholderaction constitutes control of our business”); the Securities have beenauthorized for listing on the New York Stock Exchange (“NYSE”), subject toofficial notice of issuance and evidence of satisfactory distribution; and anycertificates issued for the Securities will be issued in accordance with thePartnership Agreement. The Securities, when issued and delivered in accordancewith the Partnership Agreement against payment therefore as provided herein,will conform in all material respects to the descriptions thereofcontained in the Disclosure Package and the Prospectus.

 

(x)            Exceptas described in the Disclosure Package and the Prospectus or as provided for inthe Partnership Agreement, there are no preemptive rights or other rights tosubscribe for or to purchase, nor any restriction upon the voting or transferof, any partnership interests of the Partnership. Except as described in theDisclosure Package and the Prospectus or as provided for in the PartnershipAgreement, neither (i) the filing of the Registration Statement nor (ii) theoffering, issuance or sale of the Securities as contemplated by this Agreement,gives rise to any rights for or relating to the registration of any CommonUnits or other securities of any of the Partnership Entities. Except foroptions granted pursuant to employee benefits plans, qualified unit optionplans or other employee compensation plans or pursuant to this Agreement, thereare no outstanding options or warrants to purchase any partnership or limitedliability company interests or capital stock in any of the PartnershipEntities.

 

(y)           The Partnership has all requisite limitedpartnership power and authority to issue, sell and deliver the Securities inaccordance with and upon the terms and conditions set forth in this Agreementand the Partnership Agreement and as described in the Registration Statement,the Disclosure Package and the Prospectus. On the Closing Date and any settlementdate, all corporate, partnership and limited liability company action requiredto be taken by the Partnership Parties and any of their securityholders,partners or members for (i) the authorization, issuance, sale and deliveryof the Securities, (ii) the execution and delivery of this Agreement andthe Transaction Documents by the Partnership Parties or the PartnershipEntities, as applicable, that are party thereto and (iii) the consummationof the transactions contemplated by this Agreement and the TransactionDocuments (including the Transactions) to take place as of the Closing Date orany settlement date, as applicable, shall have been validly taken.

 

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(z)            Each of the Partnership Parties has allrequisite power and authority to execute and deliver this Agreement and perform itsrespective obligations hereunder. This Agreement has been duly authorized,executed and delivered by each of the Partnership Parties, and constitutes thevalid and legally binding agreement of each of the Partnership Partiesenforceable against each of the Partnership Parties in accordance with itsterms, subject to (A) bankruptcy, insolvency, fraudulent transfer,reorganization, moratorium and similar laws relating to or affecting creditors’rights generally and general principles of equity (regardless of whetherenforceability is considered in a proceeding in equity or at law) and (B) publicpolicy, applicable law relating to fiduciary duties and indemnification andcontribution, and an implied covenant of good faith and fair dealing.

 

(aa)         On the Closing Date:

 

(i)            the Partnership Agreement will be dulyauthorized, executed and delivered by the General Partner, OSG Bulk Ships, OSGMand One Percent and will be a valid and legally binding agreement of theGeneral Partner, OSG Bulk Ships, OSGM and One Percent, enforceable against theGeneral Partner, OSG Bulk Ships, OSGM and One Percent in accordance with itsterms;

 

(ii)           the GP LLC Agreement will be duly authorized,executed and delivered by OSG Bulk Ships and will be a valid and legallybinding agreement of OSG Bulk Ships, enforceable against OSG Bulk Ships inaccordance with its terms;

 

(iii)          each of the Transaction Documents will beduly authorized, executed and delivered by each of the Partnership Parties andthe Partnership Entities, as applicable, that is a party thereto and will be avalid and legally binding agreement of each of them, enforceable against eachof them in accordance with its terms; and

 

(iv)          with respect to the Opco LLC Agreement, eachof the Operating Subsidiary LLC Agreements, the 100% OSG/Aker Time ChartererSubsidiary LLC Agreements, the 85% OSG/Aker Time Charterer Subsidiary LLCAgreements, the 80% OSG/Aker Time Charterer Subsidiary LLC Agreements, the 75%OSG/Aker Timer Charterer Subsidiary LLC Agreements and the ATC LLC Agreementthe Partnership Entity that is a member of such limited liability company willhave duly authorized, executed and delivered an instrument adopting andagreeing to be bound by such limited liability company agreement and limitedliability company agreement will be a valid and legally binding obligation ofthe Partnership Entity that is a member of the limited liability company towhich such limited liability company agreement relates, enforceable againstsuch Partnership Entity in accordance with its terms,

 

subjectto, with respect to each agreement described in this Section 1(aa),(A) bankruptcy, insolvency, fraudulent transfer, reorganization,moratorium and similar laws relating to or affecting creditors’ rightsgenerally and general principles of equity (regardless of 

 

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whetherenforceability is considered in a proceeding in equity or at law) and (B) publicpolicy, applicable law relating to fiduciary duties and indemnification andcontribution, and an implied covenant of good faith and fair dealing.

 

(bb)         No consent, approval, authorization, order,registration, filing or equal reaction (“Consent”) with or of any courtor governmental agency or body is required in connection with (i) theoffering, issuance and sale by the Partnership of the Securities, (ii) theexecution, delivery and performance of this Agreement by the PartnershipParties or any of the Transaction Documents by the Partnership Parties or thePartnership Entities, as applicable, that are parties thereto, or (iii) thetransactions contemplated herein or in any of the Transaction Documents(including the Transactions), except for (A) such Consents that have beenobtained or will be obtained prior to the Closing Date, (B) such Consentsrequired under the Act, the Exchange Act and applicable state securities or “BlueSky” laws of any jurisdiction in connection with the purchase and distributionof the Securities by the Underwriters in the manner contemplated herein and inthe Disclosure Package and the Prospectus and (C) such Consents that, ifnot obtained, would not, individually or in the aggregate, reasonably beexpected to have a Material Adverse Effect.

 

(cc)         None of the offering, issue and sale by thePartnership of the Securities, the execution, delivery and performance of thisAgreement by the Partnership Parties and the Transaction Documents by thePartnership Entities that are parties thereto, or the consummation of any otherof the transactions contemplated in this Agreement or the Transaction Documents(including the Transactions) conflicts or will conflict with, result in abreach or violation of, or imposition of any Lien (other than Liens arisingunder the Revolving Credit Facility) upon any property or assets of thePartnership Entities pursuant to, (i) the certificate of limitedpartnership or agreement of limited partnership, certificate of formation orlimited liability company agreement, or other organizational documents of anyof the Partnership Entities, (ii) the terms of any indenture, contract,lease, mortgage, deed of trust, note agreement, loan agreement or otheragreement or instrument to which any of the Partnership Entities is a party orbound or to which their property is subject, or (iii) any statute, law,rule, regulation, judgment, order or decree applicable to any of thePartnership Entities of any court, regulatory body, administrative agency,governmental body, arbitrator or other authority having jurisdiction over anyof the Partnership Entities or any of their properties, which conflict, breach,violation or Lien, in the case of clauses (ii) and (iii), would,individually or in the aggregate, reasonably be expected to have a MaterialAdverse Effect or a material adverse effect on the ability of any of thePartnership Entities to consummate the transactions (including theTransactions) provided for in this Agreement or the Transaction Documents to beconsummated on or prior to the Closing Date, or settlement date, as applicable.

 

(dd)         No action, suit or proceeding by or beforeany court or governmental agency, authority or body or any arbitrator involvingany of the Partnership Entities or their property is pending or, to theknowledge of the Partnership Parties, threatened against or affecting any ofthe Partnership Entities that (i) would reasonably be expected to have amaterial adverse effect on the performance of this Agreement or any of theTransaction Documents or the consummation of any of the transactions (includingthe 

 

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Transactions)contemplated hereby or thereby or (ii) would reasonably be expected tohave a Material Adverse Effect, except as set forth in or contemplated in theDisclosure Package and the Prospectus (exclusive of any supplement thereto).

 

(ee)         There is no franchise, contract or otherdocument of a character required to be described in the Registration Statement,the Disclosure Package or Prospectus, or to be filed as an exhibit to theRegistration Statement, which is not described or filed as required. There isno pending or, to the knowledge of the Partnership Parties, threatened action,suit or proceeding by or before any court or governmental agency, authority orbody or any arbitrator involving the Partnership Entities or any of theirproperty of a character required to be disclosed in the Registration Statement,the Disclosure Package or the Prospectus which is not adequately disclosedtherein.

 

(ff)           The historical financial statements(including the related notes and supporting schedules) included in theDisclosure Package, the Prospectus and the Registration Statement presentfairly the financial condition, results of operations and cash flows of theentities purported to be shown thereby on the basis stated therein, as of therespective dates or for the respective periods indicated, comply as to form inall material respects with the applicable accounting requirements of the Actand have been prepared in conformity with generally accepted accountingprinciples applied on a consistent basis throughout the periods involved(except as otherwise noted therein). The selected financial data set forthunder the captions “Summary Historical and Pro Forma Financial and OperatingData” and “Selected Historical and Pro Forma Financial and Operating Data” inthe Disclosure Package, the Prospectus and Registration Statement presentfairly, on the basis stated in the Disclosure Package, the Prospectus andRegistration Statement, the information included therein. The pro formafinancial statements included in the Disclosure Package, the Prospectus and theRegistration Statement include assumptions that provide a reasonable basis forpresenting the significant effects directly attributable to the transactionsand events described therein, the related pro forma adjustments giveappropriate effect to those assumptions, and the pro forma adjustments reflectthe proper application of those adjustments to the historical financialstatement amounts in the pro forma financial statements included in theDisclosure Package, the Prospectus and the Registration Statement. The pro formafinancial statements included in the Disclosure Package, the Prospectus and theRegistration Statement comply as to form in all material respects with theapplicable accounting requirements of Regulation S-X under the Act.

 

(gg)         Ernst & Young LLP, who havecertified or shall certify the financial statements of the General Partner, thePartnership, OSG America Predecessor (as defined in the Disclosure Package andthe Prospectus) and the Maritrans Entities (as defined in the DisclosurePackage and the Prospectus), and delivered their reports with respect to suchaudited financial statements and schedules included in the Disclosure Packageand the Prospectus, are the independent registered public accounting firm withrespect to such entities within the meaning of the Act and the applicablepublished rules and regulations thereunder and the rules andregulations of the Public Company Accounting Oversight Board (the “PCAOB”).

 

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(hh)         KPMG LLP, who have certified or shall certifythe financial statements of ATC and delivered their report with respect to suchaudited financial statements and schedules included in the Disclosure Packageand the Prospectus, are the independent registered public accounting firm withrespect to ATC within the meaning of the Act and the applicable published rules andregulations thereunder and the rules and regulations of the PCAOB.

 

(ii)           The Contribution Documents were or will belegally sufficient to transfer or convey to the Partnership Entitiessatisfactory title to, or valid rights to use, operate or manage, allproperties not already held by them that are, individually or in the aggregate,required to enable the Partnership Entities to conduct their operations in allmaterial respects as contemplated by the Disclosure Package and the Prospectus,subject to the conditions, reservations and limitations contained in theContribution Documents and those described in the Disclosure Package and theProspectus. The Partnership Entities, upon execution and delivery of theContribution Documents, will succeed in all material respects to the business,assets, properties, liabilities and operations of the predecessor of thePartnership as described in the Disclosure Package, the Prospectus and theContribution Documents.

 

(jj)           On the Closing Date and any settlement date,after giving effect to the Transactions, the Partnership Entities will havegood and marketable title to all real property and good title to all personalproperty described in the Disclosure Package and the Prospectus as owned or tobe owned by the Partnership Entities and each Operating Subsidiary identifiedon Schedule IV is the sole owner of the vessel set forth opposite its nameon Schedule IV (the “Owned Vessels”), in each case free and clearof all Liens, except (i) as described, and subject to the limitationscontained, in the Disclosure Package and Prospectus, (ii) those arising inconnection with the secured term loans described in the Disclosure Package andProspectus, (iii) those arising under the Revolving Credit Facility or (iv) asdo not materially affect the value of such property, taken as a whole, and donot materially interfere with the use made in the past and proposed to be madein the future of such property by the Partnership Entities as described in theDisclosure Package and the Prospectus. On the Closing Date and any settlementdate, after giving effect to the Transactions, each Operating Subsidiaryidentified on Schedule V is the sole lessee or charterer of the vessel setforth opposite its name on Schedule V (the “Chartered Vessels” and,together with the Owned Vessels, the “Vessels”), and leases or charters,such Chartered Vessel pursuant to a valid, subsisting and enforceable lease orcharter.

 

(kk)         Each of the Partnership Entities is a citizenof the United States within the meaning of 46 U.S.C. Sec. 50501 for the purposeof operating the Vessels in the trades in which the Partnership Entitiesoperate the Vessels as described in the Disclosure Package and the Prospectus(a “U.S. Citizen”); after giving effect to the consummation of thetransactions herein contemplated and the sale of the Securities by theUnderwriters, each of the Partnership Entities will remain a citizen of theUnited States within the meaning of 46 U.S.C. Sec. 50501 and qualified to engagein the coastwise trade of the United States; provided, however, that, inrespect of this representation and warranty, such 

 

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partiesmay assume that the Underwriters will sell no less than 85% of (i) theUnderwritten Securities and (ii) the Option Securities, if any, to U.S.Citizens. 

 

(ll)           None of the Partnership Entities is (i) inviolation of its certificate of limited partnership or agreement of limitedpartnership, certificate of formation or limited liability company agreement,or other organizational documents, (ii) in default under the terms of anyindenture, contract, lease, mortgage, deed of trust, note agreement, loanagreement or other agreement, obligation, condition, covenant or instrument towhich it is a party or bound or to which its property is subject, or (iii) inviolation of any statute, law, rule, regulation, judgment, order or decree ofany court, regulatory body, administrative agency, governmental body,arbitrator or other authority having jurisdiction over such Partnership Entityor any of its properties, as applicable, which violation or default, in thecase of clause (ii) and (iii), would have a Material Adverse Effect, orwould materially impair the ability of any of the Partnership Entities to perform itsobligations under this Agreement or the Transaction Documents.

 

(mm)       Except as disclosed in the RegistrationStatement, the Disclosure Package and the Prospectus (exclusive of anyamendment or supplement thereto), subsequent to the respective dates as ofwhich such information is given in the Registration Statement, the DisclosurePackage and the Prospectus (exclusive of any amendment or supplement thereto), (i) noneof the Partnership Entities has incurred any liability or obligation, indirect,direct or contingent, or entered into any transactions, not in the ordinarycourse of business, that, individually or in the aggregate, is material to thePartnership Entities, taken as a whole, and (ii) there has not been anymaterial change in the capitalization or material increase in the long-termdebt of any of the Partnership Entities, or any dividend or distribution of anykind declared, paid or made by the Partnership on any class of itspartnership interests.

 

(nn)         Each of the Partnership Entities has filedall tax returns that are required to be filed or has requested extensionsthereof (except in any case in which the failure so to file would not have aMaterial Adverse Effect, except as set forth in or contemplated in theDisclosure Package and the Prospectus (exclusive of any supplement thereto))and has paid all taxes required to be paid by it and any other assessment, fineor penalty levied against it, to the extent that any of the foregoing is dueand payable, except for any such assessment, fine or penalty that is currentlybeing contested in good faith or as would not have a Material Adverse Effect,except as set forth in or contemplated in the Disclosure Package and theProspectus (exclusive of any supplement thereto).

 

(oo)         The Partnership Entities own or possess, oras of the Closing Date will own or possess, after giving effect to theTransactions, adequate rights to use all patents, patent applications,trademarks, service marks, trade names, trademark registrations, service markregistrations, copyrights and licenses necessary for the conduct of theirrespective businesses, except where the failure to possess such rights wouldnot have a Material Adverse Effect, and none of the Partnership Entities isaware of any claim to the contrary or any challenge by any other person to therights of any of the Partnership Entities with respect to the foregoing.

 

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(pp)         Each of thePartnership Entities are insured by insurers of recognized financialresponsibility against such losses and risks and in such amounts as are reasonablyadequate and customary in the businesses in which they are engaged; allpolicies of insurance and fidelity or surety bonds insuring any of thePartnership Entities or their respective businesses, assets, employees,officers and directors are in full force and effect; the Partnership Entitiesare in compliance with the terms of such policies and instruments in allmaterial respects; and there are no claims by any of the Partnership Entitiesunder any such policy or instrument as to which any insurance company isdenying liability or defending under a reservation of rights clause; none ofthe Partnership Entities has been refused any insurance coverage sought orapplied for; and none of Partnership Entities has any reason to believe that itwill not be able to renew its existing insurance coverage as and when suchcoverage expires or to obtain similar coverage from similar insurers as may benecessary to continue its business at a cost that would not have a MaterialAdverse Effect, except as set forth in or contemplated in the DisclosurePackage and the Prospectus (exclusive of any supplement thereto).

 

(qq)         None of thePartnership Entities (other than the General Partner) is currently prohibited,directly or indirectly, from paying any dividends to the Partnership, frommaking any other distribution on such subsidiary’s capital stock or partnershipor limited liability company interests, from repaying to the Partnership anyloans or advances to such subsidiary from the Partnership, or from transferringany of such subsidiary’s property or assets to the Partnership or any otherPartnership Entity, except as described in or contemplated by the DisclosurePackage and the Prospectus (exclusive of any supplement thereto).

 

(rr)          Each of the Partnership Entities possesses, or at theClosing Date and any settlement date, after giving effect to the Transactions,will possess, all licenses, certificates, permits and other authorizationsissued by all applicable authorities necessary to conduct its business in themanner described in the Disclosure Package and the Prospectus (exclusive of anysupplement thereto), subject to such qualifications as may be set forth inthe Disclosure Package and the Prospectus (exclusive of any supplement thereto)and except for such licenses, certificates, permits and other authorizationsthat, if not obtained, would not have, individually or in the aggregate, aMaterial Adverse Effect; and none of the Partnership Entities has received anynotice of proceedings relating to the revocation or modification of any suchlicense, certificate, authorization or permit which, singly or in theaggregate, if the subject of an unfavorable decision, ruling or finding, wouldhave a Material Adverse Effect, except as set forth in or contemplated in the DisclosurePackage and the Prospectus (exclusive of any supplement thereto).

 

(ss)         The Partnership Entities maintain a system ofinternal accounting controls sufficient to provide reasonable assurance that (i) transactionsare executed in accordance with management’s general or specificauthorizations; (ii) transactions are recorded as necessary to permitpreparation of financial statements in conformity with generally acceptedaccounting principles and to maintain asset accountability; (iii) accessto assets is permitted only in accordance with management’s general or specificauthorization; and (iv) the recorded accountability for assets is comparedwith the existing assets at 

 

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reasonableintervals and appropriate action is taken with respect to any differences. ThePartnership Entities’ internal controls over financial reporting are effectiveand the Partnership Entities are not aware of any material weakness in theirinternal controls over financial reporting.

 

(tt)           None of the Partnership Parties has taken,directly or indirectly, any action designed to or that would constitute or thatmight reasonably be expected to cause or result in, under the Exchange Act orotherwise, stabilization or manipulation of the price of any security of thePartnership to facilitate the sale or resale of the Securities.

 

(uu)         The Partnership Entities (i) are incompliance with any and all applicable foreign, federal, state and local lawsand regulations relating to the protection of human health and safety, theenvironment or hazardous or toxic substances or wastes, pollutants orcontaminants (“Environmental Laws”), (ii) have received and are incompliance with all permits, licenses or other approvals required of them underapplicable Environmental Laws to conduct their respective businesses and (iii) havenot received notice of any actual or potential liability under anyEnvironmental Law, except where such non-compliance with Environmental Laws,failure to receive required permits, licenses or other approvals, or liabilitywould not, individually or in the aggregate, have a Material Adverse Effect,except as set forth in or contemplated in the Disclosure Package and theProspectus (exclusive of any supplement thereto). On the basis of a review ofthe effects of Environmental Laws on the business, operations and properties ofthe Partnership Entities, the Partnership has reasonably concluded that thecosts and liabilities associated with such effects would not, singly or in theaggregate, have a Material Adverse Effect, except as set forth in orcontemplated in the Disclosure Package and the Prospectus (excluding anysupplement thereto).

 

(vv)         None of the following events has occurred orexists: (i) a failure to fulfill the obligations, if any, under theminimum funding standards of Section 302 of the United States EmployeeRetirement Income Security Act of 1974, as amended (“ERISA”), and theregulations and published interpretations thereunder with respect to a Plan (asdefined below), determined without regard to any waiver of such obligations orextension of any amortization period; (ii) an audit or investigation bythe Internal Revenue Service, the U.S. Department of Labor, the Pension BenefitGuaranty Corporation or any other federal or state governmental agency or anyforeign regulatory agency with respect to the employment or compensation ofemployees by any of the Partnership Entities that could have a Material AdverseEffect; or (iii) any breach of any contractual obligation, or anyviolation of law or applicable qualification standards, with respect to theemployment or compensation of employees by any of the Partnership Entities thatcould have a Material Adverse Effect. None of the following events has occurredor is reasonably likely to occur: (i) with respect to any Plan, anincrease in the aggregate amount of contributions required to be made to allPlans in the current fiscal year of the Partnership Entities compared to theamount of such contributions made in the most recently completed fiscal year ofthe Partnership Entities that could have a Material Adverse Effect; (ii) anincrease in the “accumulated post-retirement benefit obligations” (within themeaning of Statement of Financial Accounting Standards 106) of the PartnershipEntities compared to the amount of such obligations in the most recently 

 

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completedfiscal year of the Partnership Entities that could have a Material AdverseEffect; (iii) with respect to any Plan, any event or condition giving riseto a liability under Title IV of ERISA that could have a Material AdverseEffect; or (iv) the filing of a claim by one or more employees or formeremployees of any of the Partnership Entities related to their employment thatcould have a Material Adverse Effect. For purposes of this paragraph, the term “Plan”means a plan (within the meaning of Section 3(3) of ERISA) subject toTitle IV of ERISA in respect of which any of the Partnership Entities is an “employer”as defined in Section 3(5) of ERISA.

 

(ww)       The Partnership is not and, after givingeffect to the offering and sale of the Securities and the application of theproceeds thereof as described in the Disclosure Package and the Prospectus,will not be an “investment company” as defined in the Investment Company Act of1940, as amended.

 

(xx)         There is and has been no failure on the part of the Partnership orany of the directors or officers of the General Partner, in their capacities assuch, to comply with any applicable provision of the Sarbanes-Oxley Act of 2002and the rules and regulations promulgated in connection therewith (the “Sarbanes-OxleyAct”).

 

(yy)         None of the Partnership Entities nor anydirector, officer, agent or employee of any of the Partnership Entities isaware of or has taken any action, directly or indirectly, that would result ina violation by such persons of the Foreign Corrupt Practices Act of 1977, asamended, and the rules and regulations thereunder (the “FCPA”),including, without limitation, making use of the mails or any means orinstrumentality of interstate commerce corruptly in furtherance of an offer,payment, promise to pay or authorization of the payment of any money, or otherproperty, gift, promise to give, or authorization of the giving of anything ofvalue to any “foreign official” (as such term is defined in the FCPA) or anyforeign political party or official thereof or any candidate for foreignpolitical office, in contravention of the FCPA; and the Partnership Entitieshave conducted their businesses in compliance with the FCPA and have institutedand maintain policies and procedures designed to ensure, and which arereasonably expected to continue to ensure, continued compliance therewith.

 

(zz)         The operations of the Partnership Entities are and have been conductedat all times in compliance with applicable financial recordkeeping andreporting requirements and the money laundering statutes and the rules andregulations thereunder and any related or similar rules, regulations orguidelines, issued, administered or enforced by any governmental agency(collectively, the “Money Laundering Laws”) and no action, suit orproceeding by or before any court or governmental agency, authority or body orany arbitrator involving any of the Partnership Entities with respect to theMoney Laundering Laws is pending or, to the knowledge of the PartnershipParties, threatened.

 

(aaa)       None of the Partnership Entities, or to theknowledge of the Partnership Parties, no director, officer, agent, employee oraffiliate of any of the Partnership Entities is currently subject to anysanctions administered by the Office of Foreign Assets Control of the U.S.Treasury Department (“OFAC”); and the Partnership Entities will notdirectly or indirectly use the proceeds of the offering, or lend, contribute orotherwise make 

 

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availablesuch proceeds to any subsidiary, joint venture partner or other person orentity, for the purpose of financing the activities of any person currentlysubject to any U.S. sanctions administered by OFAC.

 

(bbb)      The statistical and market-related dataincluded in the Disclosure Package, Prospectus and the Registration Statementare based on or derived from sources which the Partnership Parties believe tobe reliable and accurate.

 

(ccc)       No relationship, direct or indirect, existsbetween or among any of the Partnership Entities on the one hand, and thedirectors, officers, partners, security holders, customers or suppliers of thePartnership Entities on the other hand, which is required to be described inthe Disclosure Package and the Prospectus and which is not so described.

 

(ddd)      Except as disclosed in the RegistrationStatement, the Disclosure Package and the Prospectus, the Partnership Entities (i) donot have any material lending or other relationship with any bank or lendingaffiliate of any of the Underwriters and (ii) do not intend to use any ofthe proceeds from the sale of the Securities hereunder to repay any outstandingdebt owed to any affiliate of any of the Underwriters.

 

Anycertificate signed by any officer of the Partnership Entities and delivered tothe Representatives or counsel for the Underwriters in connection with theoffering of the Securities shall be deemed a representation and warranty by thePartnership Entities, as to matters covered thereby, to each Underwriter.

 

2.             Purchase and Sale. (a) Subject to the terms and conditionsand in reliance upon the representations and warranties herein set forth, thePartnership agrees to sell to each Underwriter, and each Underwriter agrees,severally and not jointly, to purchase from the Partnership, at a purchaseprice of $17.7412 per unit, the amount of the Underwritten Securities set forthopposite such Underwriter’s name in Schedule I hereto.

 

(b)           Subject to the terms and conditions and inreliance upon the representations and warranties herein set forth, thePartnership hereby grants an option to the several Underwriters to purchase,severally and not jointly, up to 1,125,000 Option Securities at the samepurchase price per unit as the Underwriters shall pay for the UnderwrittenSecurities. Said option may be exercised only to cover over-allotments inthe sale of the Underwritten Securities by the Underwriters. Said option may beexercised in whole or in part at any time on or before the 30th day afterthe date of the Prospectus upon written or telegraphic notice by theRepresentatives to the Partnership setting forth the number of OptionSecurities as to which the several Underwriters are exercising the option andthe settlement date. The number of Option Securities to be purchased by eachUnderwriter shall be the same percentage of the total number of OptionSecurities to be purchased by the several Underwriters as such Underwriter ispurchasing of the Underwritten Securities, subject to such adjustments as youin your absolute discretion shall make to eliminate any fractional units.

 

3.             Delivery and Payment. Delivery of and payment for the UnderwrittenSecurities 

 

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and the Option Securities(if the option provided for in Section 2(b) hereof shall have beenexercised on or before the third Business Day immediately preceding the ClosingDate) shall be made at 10:00 AM, New York City time, on November 15, 2007,which date and time may be postponed by agreement between theRepresentatives and the Partnership or as provided in Section 9hereof (such date and time of delivery and payment for the Securities beingherein called the “Closing Date”). Delivery of the Securities shall bemade to the Representatives for the respective accounts of the severalUnderwriters against payment by the several Underwriters through theRepresentatives of the purchase price thereof to or upon the order of thePartnership by wire transfer payable in same-day funds to an account specifiedby the Partnership. Delivery of the Underwritten Securities and the OptionSecurities shall be made through the facilities of The Depository Trust Companyunless the Representatives shall otherwise instruct.

 

Ifthe option provided for in Section 2(b) hereof is exercisedafter the third Business Day immediately preceding the Closing Date, the Partnershipwill deliver the Option Securities (at the expense of the Partnership) to theRepresentatives, at 388 Greenwich Street, New York, New York, on the datespecified by the Representatives (which shall be within three Business Daysafter exercise of said option) for the respective accounts of the severalUnderwriters, against payment by the several Underwriters through theRepresentatives of the purchase price thereof to or upon the order of thePartnership by wire transfer payable in same-day funds to an account specifiedby the Partnership. If settlement for the Option Securities occurs after theClosing Date, the Partnership will deliver to the Representatives on thesettlement date for the Option Securities, and the obligation of theUnderwriters to purchase the Option Securities shall be conditioned uponreceipt of, supplemental opinions, certificates and letters confirming as ofsuch date the opinions, certificates and letters delivered on the Closing Datepursuant to Section 6 hereof.

 

4.             Offering by Underwriters. It is understood that the severalUnderwriters propose to offer the Securities for sale to the public as setforth in the Disclosure Package and the Prospectus.

 

EachUnderwriter, severally and not jointly, agrees with the Partnership Partiesthat it will not knowingly sell the Securities to any natural person,corporation, partnership, limited liability company, joint venture, associationor other entity (“person”) that is not a U.S. Citizen. On the ClosingDate and each settlement date, each Underwriter shall provide the PartnershipParties with a certificate, dated such date, certifying to the effect thatbased upon representations or certificates given to the Underwriter frominitial purchasers of the Securities or other diligent inquiries made by theUnderwriter, not more than 15% of the number of Securities initially purchasedby the Underwriter will be in the aggregate either initially purchased from theUnderwriter by Non-U.S. Citizens (as the term “Non-U.S. Citizen” isdefined in Section 4.10(h) of the Partnership Agreement) on such dateor, to the extent the Underwriter is a Non-U.S. Citizen, not sold and held forthe account of such Underwriter.

 

5.             Agreements. Each of the Partnership Parties, jointly and severally, agrees withthe several Underwriters that:

 

(a)           Prior to the termination of the offering ofthe Securities, the Partnership Parties will not file any amendment of theRegistration Statement or supplement to the

 

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Prospectusor any Rule 462(b) Registration Statement unless the PartnershipParties have furnished you a copy for your review prior to filing and will notfile any such proposed amendment or supplement to which you reasonably object.The Partnership Parties will cause the Prospectus, properly completed, and anysupplement thereto to be filed in a form approved by the Representativeswith the Commission pursuant to the applicable paragraph of Rule 424(b) withinthe time period prescribed and will provide evidence satisfactory to theRepresentatives of such timely filing. The Partnership Parties will promptlyadvise the Representatives (i) when the Prospectus, and any supplementthereto, shall have been filed (if required) with the Commission pursuant to Rule 424(b) orwhen any Rule 462(b) Registration Statement shall have been filedwith the Commission, (ii) when, prior to termination of the offering ofthe Securities, any amendment to the Registration Statement shall have beenfiled or become effective, (iii) of any request by the Commission or itsstaff for any amendment of the Registration Statement, or any Rule 462(b) RegistrationStatement, or for any supplement to the Prospectus or for any additionalinformation, (iv) of the issuance by the Commission of any stop ordersuspending the effectiveness of the Registration Statement or of any noticeobjecting to its use or the institution or threatening of any proceeding forthat purpose and (v) of the receipt by the Partnership Parties of anynotification with respect to the suspension of the qualification of theSecurities for sale in any jurisdiction or the institution or threatening ofany proceeding for such purpose. The Partnership Parties will use their bestefforts to prevent the issuance of any such stop order or the occurrence of anysuch suspension or objection to the use of the Registration Statement and, uponsuch issuance, occurrence or notice of objection, to obtain as soon as possiblethe withdrawal of such stop order or relief from such occurrence or objection,including, if necessary, by filing an amendment to the Registration Statementor a new registration statement and using their best efforts to have suchamendment or new registration statement declared effective as soon aspracticable.

 

(b)           If, at any time prior to the filing of theProspectus pursuant to Rule 424(b), any event occurs as a result of whichthe Disclosure Package would include any untrue statement of a material fact oromit to state any material fact necessary to make the statements therein in thelight of the circumstances under which they were made at such time notmisleading, the Partnership will (i) notify promptly the Representativesso that any use of the Disclosure Package may cease until it is amended orsupplemented; (ii) amend or supplement the Disclosure Package to correctsuch statement or omission; and (iii) supply any amendment or supplementto you in such quantities as you may reasonably request.

 

(c)           If, at any time when a prospectus relating tothe Securities is required to be delivered under the Act (including incircumstances where such requirement may be satisfied pursuant to Rule 172),any event occurs as a result of which the Prospectus as then supplemented wouldinclude any untrue statement of a material fact or omit to state any materialfact necessary to make the statements therein in the light of the circumstancesunder which they were made or the circumstances then prevailing not misleading,or if it shall be necessary to amend the Registration Statement or supplementthe Prospectus to comply with the Act or the rules thereunder, thePartnership promptly will (i) notify the Representatives of any suchevent; (ii) prepare and file with the 

 

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Commission,subject to the second sentence of paragraph (a) of this Section 5,an amendment or supplement which will correct such statement or omission oreffect such compliance; and (iii) supply any supplemented Prospectus toyou in such quantities as you may reasonably request.

 

(d)           As soon as practicable, the Partnership willmake generally available to its security holders and to the Representatives anearnings statement or statements of the Partnership Entities which will satisfythe provisions of Section 11(a) of the Act and Rule 158.

 

(e)           The Partnership will furnish to theRepresentatives and counsel for the Underwriters, without charge, signed copiesof the Registration Statement (including exhibits thereto) and to each otherUnderwriter a copy of the Registration Statement (without exhibits thereto)and, so long as delivery of a prospectus by an Underwriter or dealer may berequired  by the Act (including incircumstances where such requirement may be satisfied pursuant to Rule 172),as many copies of each Preliminary Prospectus, the Prospectus and each Issuer FreeWriting Prospectus and any supplement thereto as the Representatives may reasonablyrequest.

 

(f)            The Partnership will arrange, if necessary,for the qualification of the Securities for sale under the laws of suchjurisdictions as the Representatives may designate and will maintain suchqualifications in effect so long as required for the distribution of theSecurities; *provided that* in noevent shall the Partnership be obligated to qualify to do business in anyjurisdiction where it is not now so qualified, to take any action that wouldsubject it to service of process in suits, other than those arising out of theoffering or sale of the Securities, or to subject itself to taxation, inrespect of doing business, in any jurisdiction in which it is not otherwise sosubject.

 

(g)           The Partnership Parties will not, without theprior written consent of Citigroup Global Markets Inc. and UBS Securities LLC,offer, sell, contract to sell, pledge, or otherwise dispose of, (or enter intoany transaction which is designed to, or might reasonably be expected to,result in the disposition (whether by actual disposition or effective economicdisposition due to cash settlement or otherwise) by any of the PartnershipParties or any of their affiliates or any person in privity with any of thePartnership Parties or their affiliates) directly or indirectly, including thefiling (or participation in the filing) of a registration statement with theCommission in respect of, or establish or increase a put equivalent position orliquidate or decrease a call equivalent position within the meaning of Section 16of the Exchange Act, any other Common Units or any securities convertible into,or exercisable, or exchangeable for, Common Units; or publicly announce anintention to effect any such transaction, for a period of 180 days after thedate of this Agreement, *provided, however,*that the Partnership may issue and sell Common Units pursuant to anyemployee equity incentive plan, equity ownership plan or dividend reinvestmentplan of the Partnership in effect at the Execution Time and the Partnership may issueCommon Units issuable upon the conversion of securities or the exercise ofwarrants outstanding at the Execution Time. Notwithstanding the foregoing, if (i) duringthe last 17 days of the 180-day restricted period the Partnership issues anearnings release or material news or a material event relating to thePartnership

 

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occurs,or (ii) prior to the expiration of the 180-day restricted period, thePartnership announces that it will release earnings results during the 16-dayperiod beginning on the last day of the 180-day restricted period, therestrictions imposed in this Agreement shall continue to apply until theexpiration of the 18-day period beginning on the issuance of the earningsrelease or the occurrence of the material news or material event, unless theRepresentatives waive, in writing, such extension. The Partnership will providethe Representatives and each individual subject to the restricted periodpursuant to the lockup letters described in Section 6(k) withprior notice of any such announcement that gives rise to an extension of therestricted period.

 

(h)           None of the Partnership Parties or any oftheir affiliates will take, directly or indirectly, any action designed to orthat would constitute or that might reasonably be expected to cause or resultin, under the Exchange Act or otherwise, stabilization or manipulation of theprice of any security of the Partnership to facilitate the sale or resale ofthe Securities.

 

(i)            The Partnership Parties agree to pay thecosts and expenses relating to the following matters:  (i) the preparation, printing orreproduction and filing with the Commission of the Registration Statement(including financial statements and exhibits thereto), each PreliminaryProspectus, the Prospectus and each Issuer Free Writing Prospectus, and eachamendment or supplement to any of them; (ii) the printing (orreproduction) and delivery (including postage, air freight charges and chargesfor counting and packaging) of such copies of the Registration Statement, eachPreliminary Prospectus, the Prospectus and each Issuer Free Writing Prospectus,and all amendments or supplements to any of them, as may, in each case, bereasonably requested for use in connection with the offering and sale of theSecurities; (iii) the preparation, printing, authentication, issuance anddelivery of certificates for the Securities, including any stamp or transfertaxes in connection with the original issuance and sale of the Securities; (iv) theprinting (or reproduction) and delivery of this Agreement, any blue skymemorandum and all other agreements or documents printed (or reproduced) anddelivered in connection with the offering of the Securities; (v) theregistration of the Securities under the Exchange Act and the listing of theSecurities on the NYSE; (vi) any registration or qualification of theSecurities for offer and sale under the securities or blue sky laws of theseveral states (including filing fees and the reasonable fees and expenses ofcounsel for the Underwriters relating to such registration and qualification); (vii) anyfilings required to be made with the Financial Industry Regulatory Authority,formerly NASD, Inc. (“FINRA”), (including filing fees and thereasonable fees and expenses of counsel for the Underwriters relating to suchfilings); (viii) the transportation and other expenses incurred by or onbehalf of representatives of the Partnership Parties in connection withpresentations to prospective purchasers of the Securities; (ix) the feesand expenses of the accountants of the Partnership Parties and the fees andexpenses of counsel (including local and special counsel) for the PartnershipParties; and (x) all other costs and expenses incident to the performanceby the Partnership Parties of their obligations hereunder.

 

(j)            The Partnership Parties agree that, unlessthey have or shall have obtained the prior written consent of theRepresentatives, and each Underwriter, severally and not

 

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jointly,agrees with the Partnership Parties that, unless it has or shall have obtained,as the case may be, the prior written consent of the Partnership, it hasnot made and will not make any offer relating to the Securities that wouldconstitute an Issuer Free Writing Prospectus or that would otherwise constitutea “free writing prospectus” (as defined in Rule 405) required to be filedby the Partnership with the Commission or retained by the Partnership under Rule 433;provided that the prior written consent of the parties hereto shall be deemedto have been given in respect of the Free Writing Prospectuses included in Schedule VIhereto. Any such free writing prospectus consented to by the Representatives orthe Partnership is hereinafter referred to as a “Permitted Free WritingProspectus.”  The Partnership Partiesagree that (x) they have treated and will treat, as the case may be,each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and(y) they have complied and will comply, as the case may be, with therequirements of Rules 164 and 433 applicable to any Permitted Free WritingProspectus, including in respect of timely filing with the Commission,legending and record keeping.

 

(k)           The Partnership will use the net proceedsreceived from the sale of the Securities in the manner specified in theProspectus under “Use of Proceeds.”

 

6.             Conditions to the Obligations of theUnderwriters. Theobligations of the Underwriters to purchase the Underwritten Securities and theOption Securities, as the case may be, shall be subject to the accuracy ofthe representations and warranties on the part of the Partnership Partiescontained herein as of the Execution Time, the Closing Date and any settlementdate pursuant to Section 3 hereof, to the accuracy of thestatements of the Partnership Parties made in any certificates deliveredpursuant to the provisions hereof, to the performance by the PartnershipParties of their obligations hereunder and to the following additionalconditions:

 

(a)           The Prospectus, and any supplement thereto,have been filed in the manner and within the time period required by Rule 424(b);any material required to be filed by the Partnership pursuant to Rule 433(d) underthe Act shall have been filed with the Commission within the applicable timeperiods prescribed for such filings by Rule 433; and no stop ordersuspending the effectiveness of the Registration Statement or any noticeobjecting to its use shall have been issued and no proceedings for that purposeshall have been instituted or threatened.

 

(b)           The Representatives shall have received fromJames I. Edelson, Esq., inhouse counsel for the Partnership Parties, hisopinion, dated the Closing Date and addressed to the Representatives, to theeffect set forth on Exhibit B.

 

(c)           The Partnership Parties shall have requestedand caused Cravath, Swaine & Moore LLP, counsel for the PartnershipParties, to have furnished to the Representatives their opinion, dated theClosing Date and addressed to the Representatives, to the effect set forth on Exhibit C.

 

(d)           The Partnership Parties shall have requestedand caused Kirkpatrick & Lockhart Preston Gates Ellis LLP, specialmaritime counsel for the Partnership Parties, to

 

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havefurnished to the Representatives their opinion, dated the Closing Date andaddressed to the Representatives, to the effect set forth on Exhibit D.

 

(e)           The Representatives shall have received fromAndrews Kurth LLP, counsel for the Underwriters, such opinion or opinions,dated the Closing Date and addressed to the Representatives, with respect tothe issuance and sale of the Securities, the Registration Statement, theDisclosure Package, the Prospectus (together with any supplement thereto) andother related matters as the Representatives may reasonably require, andthe Partnership shall have furnished to such counsel such documents as theyrequest for the purpose of enabling them to pass upon such matters.

 

(f)            The Partnership shall have furnished to theRepresentatives a certificate of the Partnership, signed by the Chairman of theBoard or the President and the principal financial or accounting officer of theGeneral Partner, dated the Closing Date, to the effect that the signers of suchcertificate have carefully examined the Registration Statement, the DisclosurePackage, the Prospectus and any amendment or supplement thereto, as well aseach electronic road show used in connection with the offering of the Securities,and this Agreement and that:

 

(i)            the representations and warranties of thePartnership Parties in this Agreement are true and correct on and as of theClosing Date with the same effect as if made on the Closing Date and thePartnership Parties have complied with all the agreements and satisfied all theconditions on their part to be performed or satisfied at or prior to theClosing Date;

 

(ii)           no stop order suspending the effectiveness ofthe Registration Statement or any notice objecting to its use has been issuedand no proceedings for that purpose have been instituted or, to the knowledgeof the Partnership Parties, threatened; and

 

(iii)          since the date of the most recent financialstatements included in the Disclosure Package and the Prospectus (exclusive ofany supplement thereto), there has been no material adverse effect on thecondition (financial or otherwise), prospects, earnings, business or propertiesof the Partnership Entities, taken as a whole, whether or not arising fromtransactions in the ordinary course of business, except as set forth in orcontemplated in the Disclosure Package and the Prospectus (exclusive of anysupplement thereto).

 

(g)           The Partnership Parties shall have requestedand caused Ernst & Young LLP to have furnished to the Representatives,at the Execution Time and at the Closing Date, letters, dated respectively asof the Execution Time and as of the Closing Date, in form and substancesatisfactory to the Representatives, confirming that they are an independentregistered public accounting firm within the meaning of the Act and theExchange Act and the applicable rules and regulations adopted by theCommission thereunder and the PCAOB and that they have performed a review ofthe unaudited interim financial information of OSG America Predecessor for thesix-month period

 

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endedJune 30, 2007 and as at June 30, 2007, in accordance with Statementon Auditing Standards No. 100 and stating in effect that:

 

(i)            in their opinion the audited financialstatements and financial statement schedules included in the RegistrationStatement, the Disclosure Package and the Prospectus and reported on by themcomply as to form with the applicable accounting requirements of the Actand the related rules and regulations adopted by the Commission;

 

(ii)           on the basis of a reading of the latestunaudited financial statements made available by the Partnership Entities;their limited review, in accordance with standards of the PCAOB as described inStatement on Auditing Standards No. 100, of the unaudited interimfinancial information for the six-month period ended June 30, 2007 and asat June 30, 2007; carrying out certain specified procedures (but not anexamination in accordance with generally accepted auditing standards) whichwould not necessarily reveal matters of significance with respect to thecomments set forth in such letter; a reading of the minutes of the meetings ofthe unitholders, directors and audit and conflicts committees of thePartnership Entities; and inquiries of certain officials of the PartnershipEntities who have responsibility for financial and accounting matters of thePartnership Entities as to transactions and events subsequent to June 30,2007, nothing came to their attention which caused them to believe that:

 

(1)           any unaudited interim financial statementsincluded in the Registration Statement, the Disclosure Package and theProspectus do not comply as to form in all material respects withapplicable accounting requirements of the Act and with the related rules andregulations adopted by the Commission with respect to registration statementson Form S-1; and said unaudited financial statements are not in conformitywith generally accepted accounting principles applied on a basis substantiallyconsistent with that of the audited financial statements included in theRegistration Statement, the Disclosure Package and the Prospectus;

 

(2)           with respect to the period subsequent to June 30,2007, there were, at a specified date not more than five days prior to the dateof the letter, any increases in the consolidated long-term debt or anydecreases in the consolidated net current assets or the partners’ capital ofthe Partnership Entities as compared with the amounts shown on the June 30,2007 consolidated balance sheet included in the Registration Statement, theDisclosure Package and the Prospectus, or for the period from July 1, 2007to such specified date there were any decreases, as compared with thecorresponding period in the preceding year in consolidated revenues or thetotal or per unit amounts of net income, except in all instances for changes ordecreases set forth in such letter, in which case the letter shall beaccompanied by an explanation by the Partnership as to the significance thereofunless said explanation is not deemed necessary by the Representatives;

 

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(3)           the information included in the RegistrationStatement, the Disclosure Package and the Prospectus in response to RegulationS-K, Item 301 (Selected Financial Data), Item 302 (Supplementary FinancialInformation), Item 402 (Executive Compensation) and Item 503(d) (Ratio ofEarnings to Fixed Charges) is not in conformity with the applicable disclosurerequirements of Regulation S-K; and

 

(iii)          they have performed certain other specifiedprocedures as a result of which they determined that certain information of anaccounting, financial or statistical nature (which is limited to accounting,financial or statistical information derived from the general accountingrecords of the Partnership Entities) set forth in the Registration Statement,the Disclosure Package and the Prospectus, including the information set forthunder the captions “Summary Historical and Pro Forma Financial and OperatingData” and “Selected Historical and Pro Forma Financial and Operating Data” inthe Disclosure Package and the Prospectus, agrees with the accounting recordsof the Partnership Entities, excluding any questions of legal interpretation;and

 

(iv)          on the basis of a reading of the unauditedpro forma financial statements included in the Registration Statement, theDisclosure Package and the Prospectus (the “pro forma financial statements”),carrying out certain specified procedures, inquiries of certain officials ofthe Partnership Entities who have responsibility for financial and accountingmatters, and proving the arithmetic accuracy of the application of the proforma adjustments to the historical amounts in the pro forma financialstatements, nothing came to their attention which caused them to believe thatthe pro forma financial statements do not comply as to form in allmaterial respects with the applicable accounting requirements of Rule 11-02of Regulation S-X or that the pro forma adjustments have not been properlyapplied to the historical amounts in the compilation of such statements.

 

Referencesto the Prospectus in this paragraph (g) include any supplement theretoat the date of the letter.

 

(h)           The Partnership Parties shall have requestedand caused KPMG LLP to have furnished to the Representatives, at the ExecutionTime and at the Closing Date, letters, dated respectively as of the ExecutionTime and as of the Closing Date, in form and substance satisfactory to theRepresentatives, confirming that they are an independent registered publicaccounting firm within the meaning of the Act and the Exchange Act and theapplicable rules and regulations adopted by the Commission thereunder andthe PCAOB and stating in effect that:

 

(i)            in their opinion the audited financialstatements of ATC included in the Registration Statement, the DisclosurePackage and the Prospectus and reported on by them comply as to form withthe applicable

 

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accountingrequirements of the Act and the related rules and regulations adopted bythe Commission;

 

(ii)           on the basis of a reading of the latestunaudited financial statements made available by ATC; carrying out certainspecified procedures (but not an examination in accordance with generallyaccepted auditing standards) which would not necessarily reveal matters ofsignificance with respect to the comments set forth in such letter; a readingof the minutes of the meetings of the members and managers of ATC; andinquiries of certain officials of ATC who have responsibility for financial andaccounting matters of the ATC as to transactions and events subsequent to December 31,2006, nothing came to their attention which caused them to believe that withrespect to the period subsequent to December 31, 2006, there were, at aspecified date not more than five days prior to the date of the letter, anyincreases in the consolidated long-term debt or any decreases in the currentassets or members’ equity of ATC as compared with the amounts shown on the December 31,2006 balance sheet included in the Registration Statement, the DisclosurePackage and the Prospectus, or for the period from December 31, 2006 tosuch specified date there were any decreases, as compared with thecorresponding period in the preceding year in revenues or net income, except inall instances for changes or decreases set forth in such letter, in which casethe letter shall be accompanied by an explanation by the Partnership as to thesignificance thereof unless said explanation is not deemed necessary by theRepresentatives; and

 

(iii)          they have performed certain other specifiedprocedures as a result of which they determined that certain information of anaccounting, financial or statistical nature (which is limited to accounting,financial or statistical information derived from the general accountingrecords of ATC) set forth in the Registration Statement, the Disclosure Packageand the Prospectus agrees with the accounting records of ATC, excluding anyquestions of legal interpretation.

 

Referencesto the Prospectus in this paragraph (h) include any supplementthereto at the date of the letter.

 

(i)            Subsequent to the Execution Time or, ifearlier, the dates as of which information is given in the RegistrationStatement (exclusive of any amendment thereof) and the Prospectus (exclusive ofany amendment or supplement thereto), there shall not have been (i) anyincrease or decrease specified in the letter or letters referred to inparagraph (g) of this Section 6 or (ii) any change, orany development involving a prospective change, in or affecting the condition(financial or otherwise), earnings, business or properties of the PartnershipEntities taken as a whole, whether or not arising from transactions in theordinary course of business, except as set forth in or contemplated in theDisclosure Package and the Prospectus (exclusive of any supplement thereto) theeffect of which, in any case referred to in clause (i) or (ii) above,is, in the

 

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solejudgment of the Representatives, so material and adverse as to make itimpractical or inadvisable to proceed with the offering or delivery of theSecurities as contemplated by the Registration Statement (exclusive of anyamendment thereof), the Disclosure Package and the Prospectus (exclusive of anyamendment or supplement thereto).

 

(j)            The Securities shall have been listed andadmitted and authorized for trading on the New York Stock Exchange andsatisfactory evidence of such actions shall have been provided to theRepresentatives.

 

(k)           Prior to or at the Execution Time, thePartnership shall have furnished to the Representatives a letter substantiallyin the form of Exhibit A hereto from each officer and directorof the General Partner addressed to the Representatives.

 

(l)            The Representatives shall have receivedevidence satisfactory to them that each of the Transactions (other than theoffering of the Securities) shall have occurred or will occur as of the ClosingDate, in each case, on substantially the terms as described in the DisclosurePackage and the Prospectus.

 

(m)          Prior to the Closing Date, the PartnershipParties shall have furnished to the Representatives such further information,certificates and documents as the Representatives may reasonably request.

 

Ifany of the conditions specified in this Section 6 shall not havebeen fulfilled when and as provided in this Agreement, or if any of theopinions and certificates mentioned above or elsewhere in this Agreement shallnot be reasonably satisfactory in form and substance to theRepresentatives and counsel for the Underwriters, this Agreement and allobligations of the Underwriters hereunder may be canceled at, or at anytime prior to, the Closing Date by the Representatives. Notice of suchcancellation shall be given to the Partnership in writing or by telephone orfacsimile confirmed in writing.

 

Thedocuments required to be delivered by this Section 6 shall bedelivered at the office of Andrews Kurth LLP, counsel for the Underwriters, at450 Lexington Ave., 15th Floor, New York, New York 10017, on theClosing Date.

 

7.             Reimbursement of Underwriters’ Expenses. If the sale of the Securities provided forherein is not consummated because any condition to the obligations of the Underwritersset forth in Section 6 hereof is not satisfied, because of anytermination pursuant to clause (i) of Section 10 hereof or because ofany refusal, inability or failure on the part of the Partnership Partiesto perform any agreement herein or comply with any provision hereof otherthan by reason of a default by any of the Underwriters, the Partnership Partieswill reimburse the Underwriters severally through the Representatives on demandfor all out-of-pocket expenses (including reasonable fees and disbursements ofcounsel) that shall have been reasonably incurred by them in connection withthe proposed purchase and sale of the Securities.

 

8.             Indemnification and Contribution. (a) Each of the Partnership Parties,jointly and severally, agrees to indemnify and hold harmless each Underwriter,the directors, officers, employees and agents of each Underwriter and eachperson who controls any Underwriter within the meaning of either the Act or theExchange Act against any and all losses, claims, damages or

 

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liabilities, joint orseveral, to which they or any of them may become subject under the Act,the Exchange Act or other Federal or state statutory law or regulation, atcommon law or otherwise, insofar as such losses, claims, damages or liabilities(or actions in respect thereof) arise out of or are based upon any untruestatement or alleged untrue statement of a material fact contained in theregistration statement for the registration of the Securities as originallyfiled or in any amendment thereof, or in any Preliminary Prospectus, theProspectus or any Issuer Free Writing Prospectus or in any amendment thereof orsupplement thereto, or arise out of or are based upon the omission or allegedomission to state therein a material fact required to be stated therein ornecessary to make the statements therein not misleading, and agrees toreimburse each such indemnified party, as incurred, for any legal or otherexpenses reasonably incurred by them in connection with investigating ordefending any such loss, claim, damage, liability or action; *provided, however,* that the PartnershipParties will not be liable in any such case to the extent that any such loss,claim, damage or liability arises out of or is based upon any such untruestatement or alleged untrue statement or omission or alleged omission madetherein in reliance upon and in conformity with written information furnishedto the Partnership by or on behalf of any Underwriter through theRepresentatives specifically for inclusion therein. This indemnity agreementwill be in addition to any liability which the Partnership Parties may otherwisehave.

 

(b)           Each Underwriter severally and not jointlyagrees to indemnify and hold harmless each Partnership Party, each director ofthe General Partner, each officer of the General Partner who signs theRegistration Statement, and each person who controls the Partnership Partieswithin the meaning of either the Act or the Exchange Act, to the same extent asthe foregoing indemnity from the Partnership Parties to each Underwriter, butonly with reference to written information relating to such Underwriterfurnished to the Partnership by or on behalf of such Underwriter through theRepresentatives specifically for inclusion in the documents referred to in theforegoing indemnity. This indemnity agreement will be in addition to anyliability which any Underwriter may otherwise have. The PartnershipParties acknowledge that the statements set forth (i) in the lastparagraph of the cover page and under the heading “Underwriting” regardingdelivery of the Securities, (ii) the list of Underwriters and theirrespective participation in the sale of the Securities, (iii) thesentences related to concessions and reallowances and (iv) the paragraphsrelated to stabilization, syndicate covering transactions and penalty bids inthe Preliminary Prospectus and the Prospectus constitute the only informationfurnished in writing by or on behalf of the several Underwriters for inclusionin the Preliminary Prospectus, the Prospectus or any Issuer Free WritingProspectus.

 

(c)           Promptly after receipt by an indemnifiedparty under this Section 8 of notice of the commencement of anyaction, such indemnified party will, if a claim in respect thereof is to bemade against the indemnifying party under this Section 8, notifythe indemnifying party in writing of the commencement thereof; but the failureso to notify the indemnifying party (i) will not relieve it from liabilityunder paragraph (a) or (b) above unless and to theextent it did not otherwise learn of such action and such failure results inthe forfeiture by the indemnifying party of substantial rights and defenses and(ii) will not, in any event, relieve the indemnifying party from anyobligations to any indemnified party other than the indemnification obligationprovided in paragraph (a) or (b) above. Theindemnifying party shall be entitled to appoint counsel of the indemnifyingparty’s choice at the indemnifying party’s expense to represent the

 

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indemnifiedparty in any action for which indemnification is sought (in which case theindemnifying party shall not thereafter be responsible for the fees andexpenses of any separate counsel retained by the indemnified party or partiesexcept as set forth below); *provided,however,* that such counsel shall be satisfactory to the indemnifiedparty. Notwithstanding the indemnifying party’s election to appoint counsel torepresent the indemnified party in an action, the indemnified party shall havethe right to employ separate counsel (including local counsel), and theindemnifying party shall bear the reasonable fees, costs and expenses of suchseparate counsel if (i) the use of counsel chosen by the indemnifyingparty to represent the indemnified party would present such counsel with a conflictof interest, (ii) the actual or potential defendants in, or targets of,any such action include both the indemnified party and the indemnifying partyand the indemnified party shall have reasonably concluded that there may belegal defenses available to it and/or other indemnified parties which aredifferent from or additional to those available to the indemnifying party, (iii) theindemnifying party shall not have employed counsel satisfactory to theindemnified party to represent the indemnified party within a reasonable timeafter notice of the institution of such action or (iv) the indemnifyingparty shall authorize the indemnified party to employ separate counsel at theexpense of the indemnifying party. An indemnifying party will not, without theprior written consent of the indemnified parties, settle or compromise orconsent to the entry of any judgment with respect to any pending or threatenedclaim, action, suit or proceeding in respect of which indemnification orcontribution may be sought hereunder (whether or not the indemnifiedparties are actual or potential parties to such claim or action) unless suchsettlement, compromise or consent includes an unconditional release of eachindemnified party from all liability arising out of such claim, action, suit orproceeding.

 

(d)           In the event that the indemnity provided in paragraph(a) or (b) of this Section 8 is unavailable toor insufficient to hold harmless an indemnified party for any reason, thePartnership Parties and the Underwriters severally agree to contribute to theaggregate losses, claims, damages and liabilities (including legal or otherexpenses reasonably incurred in connection with investigating or defending thesame) (collectively “Losses”) to which the Partnership Parties and oneor more of the Underwriters may be subject in such proportion as isappropriate to reflect the relative benefits received by the PartnershipParties on the one hand and by the Underwriters on the other from the offeringof the Securities; *provided, however,*that in no case shall any Underwriter (except as may be provided in anyagreement among underwriters relating to the offering of the Securities) beresponsible for any amount in excess of the underwriting discount or commissionapplicable to the Securities purchased by such Underwriter hereunder. If theallocation provided by the immediately preceding sentence is unavailable forany reason, the Partnership Parties and the Underwriters severally shallcontribute in such proportion as is appropriate to reflect not only suchrelative benefits but also the relative fault of the Partnership Parties on theone hand and of the Underwriters on the other in connection with the statementsor omissions which resulted in such Losses as well as any other relevant equitableconsiderations. Benefits received by the Partnership Parties shall be deemed tobe equal to the total net proceeds from the offering (before deductingexpenses) received by it, and benefits received by the Underwriters shall bedeemed to be equal to the total underwriting discounts and commissions, in eachcase as set forth on the cover page of the Prospectus. Relative faultshall be determined by reference to, among

 

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otherthings, whether any untrue or any alleged untrue statement of a material factor the omission or alleged omission to state a material fact relates toinformation provided by the Partnership Parties on the one hand or theUnderwriters on the other, the intent of the parties and their relativeknowledge, access to information and opportunity to correct or prevent suchuntrue statement or omission. The Partnership Parties and the Underwritersagree that it would not be just and equitable if contribution were determinedby pro rata allocation or any other method of allocation which does not takeaccount of the equitable considerations referred to above. Notwithstanding theprovisions of this paragraph (d), no person guilty of fraudulentmisrepresentation (within the meaning of Section 11(f) of the Act)shall be entitled to contribution from any person who was not guilty of suchfraudulent misrepresentation. For purposes of this Section 8, eachperson who controls an Underwriter within the meaning of either the Act or theExchange Act and each director, officer, employee and agent of an Underwritershall have the same rights to contribution as such Underwriter, and each personwho controls the Partnership Parties within the meaning of either the Act orthe Exchange Act, each officer of the General Partner who shall have signed theRegistration Statement and each director of the General Partner shall have thesame rights to contribution as the Partnership Parties, subject in each case tothe applicable terms and conditions of this paragraph (d).

 

9.             Default by an Underwriter. If any one or more Underwriters shall fail topurchase and pay for any of the Securities agreed to be purchased by suchUnderwriter or Underwriters hereunder and such failure to purchase shallconstitute a default in the performance of its or their obligations under thisAgreement, the remaining Underwriters shall be obligated severally to take upand pay for (in the respective proportions which the amount of Securities setforth opposite their names in Schedule I hereto bears to the aggregateamount of Securities set forth opposite the names of all the remainingUnderwriters) the Securities which the defaulting Underwriter or Underwritersagreed but failed to purchase; *provided,however,* that in the event that the aggregate amount of Securitieswhich the defaulting Underwriter or Underwriters agreed but failed to purchaseshall exceed 10% of the aggregate amount of Securities set forth in Schedule Ihereto, the remaining Underwriters shall have the right to purchase all, butshall not be under any obligation to purchase any, of the Securities, and ifsuch nondefaulting Underwriters do not purchase all the Securities, thisAgreement will terminate without liability to any nondefaulting Underwriter orthe Partnership Parties. In the event of a default by any Underwriter as setforth in this Section 9, the Closing Date shall be postponed forsuch period, not exceeding five Business Days, as the Representatives shalldetermine in order that the required changes in the Registration Statement andthe Prospectus or in any other documents or arrangements may be effected. Nothingcontained in this Agreement shall relieve any defaulting Underwriter of itsliability, if any, to the Partnership Parties and any nondefaulting Underwriterfor damages occasioned by its default hereunder.

 

10.           Termination. This Agreement shall be subject totermination in the absolute discretion of the Representatives, by notice givento the Partnership prior to delivery of and payment for the Securities, if atany time prior to such delivery and payment (i) trading in the Partnership’sCommon Units shall have been suspended by the Commission or the New York StockExchange or trading in securities generally on the New York Stock Exchangeshall have been suspended or limited or minimum prices shall have been establishedon such exchange, (ii) a banking moratorium shall have been declaredeither by Federal or New York State 

 

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authorities or (iii) thereshall have occurred any outbreak or escalation of hostilities, declaration bythe United States of a national emergency or war, or other calamity or crisisthe effect of which on financial markets is such as to make it, in the solejudgment of the Representatives, impractical or inadvisable to proceed with theoffering or delivery of the Securities as contemplated by the PreliminaryProspectus or the Prospectus (exclusive of any supplement thereto).

 

11.           Representations and Indemnities to Survive. The respective agreements, representations,warranties, indemnities and other statements of the Partnership Parties ortheir respective officers and of the Underwriters set forth in or made pursuantto this Agreement will remain in full force and effect, regardless of anyinvestigation made by or on behalf of any Underwriter or the PartnershipParties or any of the officers, directors, employees, agents or controllingpersons referred to in Section 8 hereof, and will survive deliveryof and payment for the Securities. The provisions of Sections 7 and 8hereof shall survive the termination or cancellation of this Agreement.

 

12.           Notices. All communications hereunder will be in writing and effective only onreceipt, and, if sent to the Representatives, will be mailed, delivered ortelefaxed to (a) Citigroup Global Markets Inc. General Counsel (fax no.:(212) 816-7912) and confirmed to the General Counsel, Citigroup Global MarketsInc., at 388 Greenwich Street, New York, New York, 10013, Attention: GeneralCounsel, and (b) UBS Securities LLC, 299 Park Avenue, New York, NY10171-0026, Attention: Syndicate Department; or, if sent to the PartnershipParties, will be mailed, delivered or telefaxed to OSG America L.P., in care ofOSG America LLC, Two Harbour Place, 302 Knights Run Avenue, Suite 1200,Tampa, FL 33602, Attn:  President (faxno.: (813) 221-2769), confirmed to it at Overseas Shipholding Group, Inc.,666 Third Avenue, New York, NY 10017, attention of the Legal Department (faxno.:  (212) 251-1180), with a copy toCravath, Swaine & Moore LLP, 825 Eighth Avenue, New York, NY 10019,Attention:  John T. Gaffney.

 

13.           Successors. This Agreement will inure to the benefit ofand be binding upon the parties hereto and their respective successors and theofficers, directors, employees, agents and controlling persons referred to in Section 8hereof, and no other person will have any right or obligation hereunder.

 

14.           No Fiduciary Duty. The Partnership Parties hereby acknowledgethat (a) the purchase and sale of the Securities pursuant to thisAgreement is an arm’s-length commercial transaction between the PartnershipParties, on the one hand, and the Underwriters and any affiliate through whichit may be acting, on the other, (b) the Underwriters are acting asprincipal and not as an agent or fiduciary of the Partnership Parties and (c) thePartnership Parties’ engagement of the Underwriters in connection with theoffering and the process leading up to the offering is as independentcontractors and not in any other capacity. Furthermore, each of the PartnershipParties agrees that it is solely responsible for making its own judgments inconnection with the offering (irrespective of whether any of the Underwritershas advised or is currently advising the Partnership Parties on related orother matters). Each of the Partnership Parties agrees that it will not claimthat the Underwriters have rendered advisory services of any nature or respect,or owe an agency, fiduciary or similar duty to the Partnership Parties, inconnection with such transaction or the process leading thereto.

 

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15.           Integration. This Agreement supersedes all prior agreementsand understandings (whether written or oral) between the Partnership Partiesand the Underwriters, or any of them, with respect to the subject matterhereof.

 

16.           Applicable Law. THIS AGREEMENT WILL BE GOVERNED BY ANDCONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TOCONTRACTS MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK.

 

17.           Waiver of Jury Trial. Each of the Partnership Parties herebyirrevocably waives, to the fullest extent permitted by applicable law, any andall right to trial by jury in any legal proceeding arising out of or relatingto this Agreement or the transactions contemplated hereby.

 

18.           Counterparts. This Agreement may be signed in one ormore counterparts, each of which shall constitute an original and all of whichtogether shall constitute one and the same agreement.

 

19.           Headings. The section headings used herein are for convenience only andshall not affect the construction hereof.

 

20.           Definitions. The terms that follow, when used in this Agreement,shall have the meanings indicated.

 

“Act”shall mean the Securities Act of 1933, as amended, and the rules andregulations of the Commission promulgated thereunder.

 

“BusinessDay” shall mean any day other than a Saturday, a Sunday or a legal holidayor a day on which banking institutions or trust companies are authorized orobligated by law to close in New York City.

 

“Commission”shall mean the Securities and Exchange Commission.

 

“DisclosurePackage” shall mean (i) the Preliminary Prospectus that is generallydistributed to investors and used to offer the Securities, (ii) the IssuerFree Writing Prospectuses, if any, identified in Schedule VIhereto, and (iii) any other Free Writing Prospectus that the partieshereto shall hereafter expressly agree in writing to treat as part of theDisclosure Package.

 

“EffectiveDate” shall mean each date and time that the Registration Statement, anypost-effective amendment or amendments thereto and any Rule 462(b) RegistrationStatement became or becomes effective.

 

“ExchangeAct” shall mean the Securities Exchange Act of 1934, as amended, and the rules andregulations of the Commission promulgated thereunder.

 

“ExecutionTime” shall mean the date and time that this Agreement is executed anddelivered by the parties hereto.

 

“FreeWriting Prospectus” shall mean a free writing prospectus, as defined in Rule 405.

 

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“IssuerFree Writing Prospectus” shall mean an issuer free writing prospectus, asdefined in Rule 433.

 

“PreliminaryProspectus” shall mean any preliminary prospectus referred to in paragraph1(a) above and any preliminary prospectus included in the RegistrationStatement at the Effective Date that omits Rule 430A Information.

 

“Prospectus”shall mean the prospectus relating to the Securities that is first filedpursuant to Rule 424(b) after the Execution Time.

 

“RegistrationStatement” shall mean the registration statement referred to in paragraph1(a) above, including exhibits and financial statements and anyprospectus supplement relating to the Securities that is filed with theCommission pursuant to Rule 424(b) and deemed part of suchregistration statement pursuant to Rule 430A, as amended at the ExecutionTime and, in the event any post-effective amendment thereto or any Rule 462(b) RegistrationStatement becomes effective prior to the Closing Date, shall also mean suchregistration statement as so amended or such Rule 462(b) RegistrationStatement, as the case may be.

 

“Rule 158”,“Rule 163”, “Rule 164”, “Rule 172”, “Rule 405”,“Rule 415”, “Rule 424”, “Rule 430A” and “Rule 433”refer to such rules under the Act.

 

“Rule 430AInformation” shall mean information with respect to the Securities and theoffering thereof permitted to be omitted from the Registration Statement whenit becomes effective pursuant to Rule 430A.

 

“Rule 462(b) RegistrationStatement” shall mean a registration statement and any amendments theretofiled pursuant to Rule 462(b) relating to the offering covered by theregistration statement referred to in Section 1(a) hereof

 

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If the foregoing is in accordance with your understanding of ouragreement, please sign and return to us the enclosed duplicate hereof,whereupon this letter and your acceptance shall represent a binding agreementamong the Partnership Parties and the several Underwriters.

 

 
|       | Very truly yours,                                             |
|------------|---------------------------------------------------------------|
|       |                                                          |
| ** ** | **OSG AMERICA L.P.**                                          |
|       |                                                          |
|       | By:     OSG America LLC, its general |
|       | partner                                                       |
|       |                                                          |
|       |                                                          |
|       | By:                                                           | /s/ Myles R. Itkin |
|       | Name:                                                         | Myles R. Itkin |
|       | Title:                                                        | Chief Financial Officer |
|       |                                                          |   |
|       |                                                          |   |
| ** ** | **OSG AMERICA LLC**                                           |
|       |                                                          |   |
|       |                                                          |   |
|       | By:                                                           | /s/ Myles R. Itkin |
|       | Name:                                                         | Myles R. Itkin |
|       | Title:                                                        | Chief Financial Officer |
|       |                                                          |   |
|       |                                                          |   |
| ** ** | **OSG BULK SHIPS, INC.**                                      |
|       |                                                          |   |
|       |                                                          |   |
|       | By:                                                           | /s/ Myles R. Itkin |
|       | Name:                                                         | Myles R. Itkin |
|       | Title:                                                        | Senior Vice President |
|       |                                                          | & Treasurer |
|       |                                                          |   |
|       |                                                          |   |
| ** ** | **OSG SHIP MANAGEMENT, INC.**                                 |
|       |                                                          |   |
|       |                                                          |   |
|       | By:                                                           | /s/ Lois Zabrocky |
|       | Name:                                                         | Lois Zabrocky |
|       | Title:                                                        | Vice President |
|            |                                                               |  |  |  |

 

 

*Underwriting Agreement ofOSG America L.P.*

 

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|   | **OSGAMLP ONE PERCENT INTEREST** |
|--------|----------------------------------|
|   | **CORPORATION**                  |
|   |                             |   |
|   |                             |   |
|   | By:                              | /s/ Jerry Miller |
|   | Name:                            | Jerry Miller |
|   | Title:                           | Vice President & Treasurer |
|   |                             |   |
|   |                             |   |
|   | **OVERSEAS SHIPHOLDING GROUP,**  |
|   | **INC.**                         |
|   |                             |   |
|   |                             |   |
|   | By:                              | /s/ Mats Berglund |
|   | Name:                            | Mats Berglund |
|   | Title:                           | Senior Vice President |
|        |                                  |  |  |

 

 

*Underwriting Agreement of OSG America L.P.*

 

----

 

The foregoing Agreement is herebyconfirmed and accepted as of thedate first above written.

 

CITIGROUP GLOBAL MARKETS INC.

UBS SECURITIES LLC

 

 
| By:  **Citigroup Global Markets  Inc.** |
|----------------------------------------------|
|                                         |   |
|                                         |   |
| By:                                          | /s/ Steven Escaler |   |
|                                         | Name: Steven Escaler |
|                                         | Title: Vice President |
|                                         |   |
|                                         |   |
| By:  **UBS  Securities LLC**            |
|                                         |   |
|                                         |   |
| By:                                          | /s/ Christopher C. Juban |   |
|                                         | Name: Christopher C. Juban |
|                                         | Title: Executive Director |
|                                         |   |
|                                         |   |
| By:                                          | /s/ Kenneth F. Owen |   |
|                                         | Name: Kenneth F. Owen |
|                                         | Title: Associate Director |

 

 

For themselves and the otherseveral Underwriters named inSchedule I to the foregoingAgreement.

 

----

 

SCHEDULE I

 
| **Underwriters**                                             | ** ** | **Number of Underwritten Securities  to be Purchased** | ** ** |
|--------------------------------------------------------------|------------|---------------------------------------------------------------------------------|------------|
| Citigroup  Global Markets Inc                                |       | 2,531,250                                                                       |       |
| UBS  Securities LLC                                          |       | 2,531,250                                                                       |       |
| Merrill  Lynch, Pierce, Fenner & Smith Incorporated |       | 1,687,500                                                                       |       |
| Raymond  James & Associates, Inc               |       | 562,500                                                                         |       |
| DnB NOR  Markets, Inc                                   |       | 187,500                                                                         |       |
|                                                         |       |                                                                            |       |
| Total                                                        |       | 7,500,000                                                                       |       |

 

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SCHEDULE II 

 

**ClosingDate Operating Subsidiaries**

 

----

 

SCHEDULE III

 

**Newbuilding Subsidiaries**

 

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SCHEDULE IV

 

**Owned Vessels**

 

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SCHEDULE V 

 

**Chartered Vessels**

 

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SCHEDULE VI

 

**Schedule ofFree Writing ProspectusesIncluded in the Disclosure Package**

 

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| **[Form of Lock-Up Agreement]** | ** ** | **EXHIBIT A** |
|--------------------------------------|------------|--------------------|

 

**[Letterheadof major interest holder ofOSG America L.P.]**

 

OSG America L.P. Public Offering of Common Units

 

[          ],2007

 

CITIGROUP GLOBAL MARKETS INC. UBS INVESTMENTS LLC As Representatives of the several Underwriters

 

c/o Citigroup Global Markets Inc. 388 Greenwich Street New York, New York 10013

 

Ladies and Gentlemen:

 

This letter is being delivered to you inconnection with the proposed Underwriting Agreement (the “UnderwritingAgreement”), between OSG America L.P., a Delaware limited partnership (the “Partnership”),OSG America LLC, a Delaware limited liability company (the “General Partner”),OSG Bulk Ships, Inc., a New York corporation (“OSG Bulk Ships”),OSGAMLP One Percent Interest Corporation, a Delaware corporation (“OnePercent”), OSG Ship Management, Inc., a Delaware corporation (“OSGM”),and Overseas Shipholding Group, Inc., a Delaware corporation (“OSG”and, together with the Partnership, the General Partner, OSG Bulk Ships, OnePercent and OSGM, the “Partnership Parties”), and each of you asrepresentatives of a group of Underwriters named therein, relating to anunderwritten public offering of Common Units representing limited partnerinterests in the Partnership (the “Common Units”).

 

In order to induce you and the otherUnderwriters to enter into the Underwriting Agreement, the undersigned willnot, without the prior written consent of Citigroup Global Markets Inc. and UBSSecurities LLC, offer, sell, contract to sell, pledge or otherwise dispose of,(or enter into any transaction which is designed to, or might reasonably beexpected to, result in the disposition (whether by actual disposition oreffective economic disposition due to cash settlement or otherwise) by theundersigned or any affiliate of the undersigned or any person in privity withthe undersigned or any affiliate of the undersigned), directly or indirectly,including the filing (or participation in the filing) of a registrationstatement with the Securities and Exchange Commission in respect of, orestablish or increase a put equivalent position or liquidate or decrease a callequivalent position within the meaning of Section 16 of the SecuritiesExchange Act of 1934, as amended, and the rules and regulations of theSecurities and Exchange Commission promulgated thereunder with respect to, anyCommon Units or any securities convertible into, or exercisable or exchangeablefor Common Units, or publicly announce an intention to effect any suchtransaction, for a period of 180 days after the date of the 

 

----

 

Underwriting Agreement, other than Common Unitsredeemed by the Partnership in connection with the exercise by the Underwritersof the over-allotment option granted to the Underwriters by the Partnership inthe Underwriting Agreement.

 

The restrictions imposed by this agreement,will not, however restrict transfers of Common Units to any of the followingtransferees who agree to be bound in writing by the restrictions in thisagreement and who receive such Common Units in a transfer not involving adisposition for value: (a) any donee(s) of one or more *bona fide* gifts of Common Units; (b) anytrust for the direct or indirect benefit of the locked-up party or of familialrelation thereof not more remote than first cousin, whether by blood, marriageor adoption; (c) any beneficiary of the locked-up party pursuant to a willor other testamentary document or applicable laws of descent; or (d) as adistribution to partners, members or stockholders of the locked-up party.

 

If (i) the Partnership issues anearnings release or material news, or a material event relating to thePartnership occurs, during the last 17 days of the lock-up period, or (ii) priorto the expiration of the lock-up period, the Partnership announces that it willrelease earnings results during the 16-day period beginning on the last day ofthe lock-up period, the restrictions imposed by this agreement shall continueto apply until the expiration of the 18-day period beginning on the issuance ofthe earnings release or the occurrence of the material news or material event,unless Citigroup Global Markets Inc. and UBS Securities LLC waive, in writing,such extension. The undersigned hereby acknowledges that the Partnership hasagreed in the Underwriting Agreement to provide written notice of any eventthat would result in an extension of the lock-up period and agrees that anysuch notice properly delivered will be deemed to have given to, and received by,the undersigned.

 

If for any reason the Underwriting Agreementshall be terminated prior to the Closing Date (as defined in the UnderwritingAgreement), the agreement set forth above shall likewise be terminated.

 

Yours very truly, 

 

 

**[Signature of officer, director or majorstockholder]**

 

 

**[Name and address of officer,director or majorstockholder]**

 

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| **[Form of Opinion of James I. Edelson, Esq.]** | ** ** | **EXHIBIT B** |
|-----------------------------------------------------------|------------|--------------------|

 

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| **[Form of Opinion of Cravath, Swaine &  Moore LLP]** | ** ** | **EXHIBIT C** |
|---------------------------------------------------------------------|------------|--------------------|

 

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| **[Form of Opinion of Kirkpatrick &  Lockhart Preston Gates Ellis LLP]** |   | **EXHIBIT D** |
|----------------------------------------------------------------------------------------|--------|--------------------|

 

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