**Exhibit 10.6.5**

 

**DIRECTOR AND OFFICER INDEMNITY AGREEMENT**

 

This agreement(the “Agreement”) is made and entered into as of the 9th dayof November, 2007, by and between OSG America L.P., a Delaware limitedpartnership (the “Partnership”), and KathleenC. Haines, (the “Indemnitee”).

 

RECITALS

 

A.            The Indemnitee is a Director of OSG America LLC, a Delawarelimited liability company and the general partner of the Partnership (the “GeneralPartner”).

 

B.            Both the Partnershipand the Indemnitee recognize the increased risk of litigation and other claimsbeing asserted against directors and officers of public entities in today’senvironment.

 

C.            Section 17-108 ofthe Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Section 17-101,*et seq*., (the “Act”) expresslyrecognizes that, subject to such standards and restrictions as may be set forthin its partnership agreement, a limited partnership may, and shall have thepower to, indemnify and hold harmless any person from and against any and allclaims and demands whatsoever.

 

D.            Subject to thelimitations set forth therein, Section 7.07 of the Amended and RestatedAgreement of Limited Partnership of the Partnership (the “PartnershipAgreement”) requires the Partnership to indemnify and advance expenses to thedirectors and officers of the General Partner to the fullest extent permittedby law and the Indemnitee has been serving and continues to serve as a Director of the General Partner in part inreliance on such provision.

 

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

 

Inconsideration of the foregoing and the mutual covenants contained herein, andother good and valuable consideration, the sufficiency and receipt of which arehereby acknowledged, the parties hereto agree as follows:

 

# 1.             Certain Definitions.

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## (a)           *“Affiliate”* means, with respect to anyPerson, any other Person that directly or indirectly through one or moreintermediaries controls, is controlled by or is under 

 

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## common control with, such Person. As used herein, the term “control”means the possession, direct or indirect, of the power to direct or cause thedirection of the management and policies of a Person, whether through ownershipof voting securities, by contract or otherwise.

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## (b)           *“Board ofDirectors”*means the Board of Directors of the General Partner.

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## (c)           “*Change in Control*”means, and shall be deemed to have occurred upon one or more of the followingevents: (i) any transaction resulting in the Partnership (or its successoror survivor by way of merger, consolidation, or some other transaction, or aparent or subsidiary thereof) ceasing to be an Affiliate of OSG (or itssuccessor or survivor by way of merger, consolidation, or some othertransaction, or a parent or subsidiary thereof); (ii) the limited partnersof the Partnership approve, in one transaction or a series of transactions, aplan of complete liquidation of the Partnership; (iii) the sale or otherdisposition by either the General Partner or the Partnership of all orsubstantially all of its assets, or the sale or other disposition of all orsubstantially all of the assets of the Partnership’s subsidiaries, in one ormore transactions to any Person other than the General Partner or an Affiliate ofthe General Partner; or (iv) a transaction resulting in a Person otherthan OSG (or its successor or survivor by way of merger, consolidation, or someother transaction, or a parent or subsidiary thereof) or an Affiliate thereofbeing the general partner of the Partnership (or its successor or survivor byway of merger, consolidation, or some other transaction, or a parent orsubsidiary thereof).

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## (d)           “*Expenses*”means all direct and indirect costs of any type or nature whatsoever(including, without limitation, all attorneys’ fees and related disbursementsand other out-of- pocket costs) actually and reasonably incurred by the Indemniteein connection with the investigation, defense or appeal of or being a witnessin, participating in or preparing to defend a Proceeding or establishing orenforcing a right to (i) indemnification or advancement of expenses underthis Agreement, the Partnership Agreement, the Act or otherwise or (ii) directors’and officers’ liability insurance coverage; provided, however, thatExpenses shall not include any judgments, fines or penalties or amounts paid insettlement of a Proceeding.  Should anypayments by the Partnership under this Agreement be determined to be subject toany federal, state or local income or excise tax, “Expenses” shall also includesuch amounts as are necessary to place the Indemnitee in the same after-taxposition (after giving effect to all applicable taxes) as the Indemnitee wouldhave been in had no such tax been determined to apply to such payments.

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## (e)           “*Indemnifiable Event*”is any event or occurrence related to the fact that the Indemnitee is or was adirector or officer of the General Partner, or is or was serving at the requestof the General Partner as a director, officer, employee, trustee or agent ofanother corporation, partnership, joint venture, trust, nonprofit entity orother entity (including service with respect to employee benefit plans), or byreason of anything done or not done by the Indemnitee in any such capacity.

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## (f)            “*Indemnification Period*” shall be such period as the Indemniteeshall continue to serve as a director or officer of the General Partner, orshall continue at the request of the General Partner to serve as a director,officer, employee, trustee or agent of another corporation, partnership, jointventure, trust, nonprofit entity or other entity, and thereafter so 

 

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## long as the Indemnitee shall be subject to any possible Proceedingarising out of the Indemnitee’s tenure in the foregoing positions.

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## (g)           “*Losses*” areany judgments, fines, penalties and amounts paid in settlement (including allinterest assessments and other charges paid or payable in connection with or inrespect of such judgments, fines, penalties or amounts paid in settlement) ofany Proceeding.

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## (h)           *“OSG”*means Overseas Shipholding Group, Inc.,a Delaware corporation.

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## (i)            *“Person”*means an individual or acorporation, firm, limited liability company, partnership, joint venture,trust, unincorporated organization, association, government agency or politicalsubdivision thereof or other entity.

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## (j)            “*Proceeding*” shall mean any completed, actual, pending orthreatened action, suit, claim, inquiry or proceeding, whether civil, criminal,administrative or investigative (including an action by or in the right of the Partnership)and whether formal or informal.

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## (k)           “*Reviewing Party*”shall mean (i) the Board of Directors (provided that a majority ofdirectors are not parties to the Proceeding), (ii) a person or bodyselected by the Board of Directors or (iii) if there has been a Change inControl, the special independent counsel referred to in Section 5.

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# 2.             Indemnification and Advancementof Expenses.  Subject to the limitations set forth in Section 4:

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## (a)           Indemnification.  The Partnership shall indemnify and holdharmless the Indemnitee, to the fullest extent permitted by the PartnershipAgreement, as soon as practicable after written demand is presented to the Partnership,in the event the Indemnitee was or is made or is threatened to be made a partyto or witness in or is otherwise involved in a Proceeding by reason, in wholeor in part, of an Indemnifiable Event against all Expenses and Losses incurredby the Indemnitee in connection with such Proceeding.  In the event of any change, after the date ofthis Agreement, in any applicable law, statute or rule regarding the rightof a Delaware limited partnership to indemnify any director or officer of itsgeneral partner, such change, to the extent it would expand the Indemnitee’srights under this Agreement, shall be included within the Indemnitee’s rightsand the Partnership’s obligations under this Agreement, and, to the extent itwould narrow the Indemnitee’s rights or the Partnership’s obligations underthis Agreement, shall be excluded from this Agreement; provided, however,that any change required by applicable laws, statutes or rules to beapplied to this Agreement shall be so applied regardless of whether the effectof such change is to narrow the Indemnitee’s rights or the Partnership’sobligations under this Agreement.

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## (b)           Advancement of Expenses.  The Partnership shall, to the fullest extent permittedby the Partnership Agreement, pay the Expenses incurred by the Indemnitee assoon as practicable after written demand is presented to the Partnership in theevent the Indemnitee was or is made or is threatened to be made a party to orwitness in or is otherwise involved in a Proceeding by reason, in whole or inpart, of an Indemnifiable Event in advance of its final disposition; provided,however, that, to the extent required by law, such payment of expensesin 

 

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## advance of the final disposition of the Proceeding shall be made onlyupon receipt of an undertaking by the Indemnitee to repay all amounts advancedif it should be ultimately determined that the Indemnitee is not entitled to beindemnified under this Agreement, the Act or otherwise.

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## (c)           Partial Indemnity.  If the Indemnitee is entitled under any provisionof this Agreement to indemnification by the Partnership for some or a portionof the Losses or Expenses, but not, however, for all of the total amountthereof, the Partnership shall indemnify the Indemnitee for the portion thereofto which the Indemnitee is entitled. Notwithstanding any other provision of this Agreement, to the extentthat the Indemnitee has been successful on the merits or otherwise in defenseof any issue or matter therein, including dismissal without prejudice, the Indemniteeshall be indemnified against all Expenses incurred in connection therewith.

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## (d)           Contribution.  If the indemnification provided in Section 2(a) forany reason is held by a court of competent jurisdiction to be unavailable to theIndemnitee, then in respect of any Indemnifiable Event, the Partnership shallcontribute to the amount of Expenses and Losses paid in settlement actuallyincurred and paid or payable by the Indemnitee in such proportion as isappropriate to reflect (i) the relative benefits received by the Partnershipon the one hand and the Indemnitee on the other hand from the transaction fromwhich such Proceeding arose and (ii) the relative fault of the Partnershipon the one hand and of the Indemnitee on the other hand in connection with theevents which resulted in such Expenses and Losses, as well as any otherrelevant equitable considerations.  Therelative fault of the Partnership on the one hand and of the Indemnitee on theother hand shall be determined by reference to, among other things, the parties’relative intent, knowledge, access to information and opportunity to correct orprevent the circumstances resulting in such expenses, judgments, fines orsettlement amounts.  The Partnership andthe Indemnitee agree that it would not be just and equitable if contributionpursuant to this Section 2(d) were determined by pro rata allocationor any other method of allocation which does not take account of the foregoingequitable considerations.

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## (e)           Enforcement.  If a claim for indemnification (following thefinal disposition of such Proceeding) under Section 2(a) oradvancement of Expenses under Section 2(b) is not paid in full withinthirty days after a written claim therefor by the Indemnitee has been presentedto the Partnership, the Indemnitee may file suit against the Partnership torecover the unpaid amount of such claim and, if successful in whole or in part,shall be entitled to be paid the expense of prosecuting such claim.  In addition, the Indemnitee may file suitagainst the Partnership to establish a right to indemnification or advancementof Expenses arising under this Agreement, the Partnership Agreement, the Act orotherwise.  In any such action the Partnershipshall have the burden of proving by clear and convincing evidence that the Indemniteeis not entitled to the requested indemnification or advancement of Expensesunder applicable law.

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# 3.             Notification and Defense ofProceeding.  Promptly after receipt by the Indemnitee ofnotice of the commencement of or threat of the commencement of any Proceeding, theIndemnitee shall, if a request for indemnification in respect thereof is to bemade against the Partnership under this Agreement, notify the Partnership ofthe commencement thereof; but the failure to notify the Partnership will notrelieve the Partnership from any liability which it may have to the Indemniteeunder this Agreement or otherwise unless and only to the extent that such 

 

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# omission can be shown to have prejudiced the Partnership’sability to defend the Proceeding.  Exceptas otherwise provided below, the Partnership shall be entitled to assume thedefense of such Proceeding, with counsel approved by the Indemnitee (whichapproval shall not be unreasonably withheld). After notice from the Partnership to the Indemnitee of its election toassume the defense thereof, the Partnership will not be liable to the Indemniteeunder this Agreement for any legal or other expenses subsequently incurred by theIndemnitee in connection with the defense thereof other than reasonable costsof investigation or as otherwise provided below.  The Indemnitee shall have the right to employits counsel in such Proceeding, but the fees and expenses of such counselincurred after notice from the Partnership of its assumption of the defensethereof shall be at the expense of the Indemnitee unless (i) theemployment of counsel by the Indemnitee has been authorized by the Partnership,(ii) the Indemnitee shall have reasonably concluded that there may be aconflict of interest between the Partnership and the Indemnitee in the conductof the defense of such Proceeding or (iii) the Partnership shall not infact have employed counsel to assume the defense of such Proceeding, in each ofwhich cases the fees and expenses of counsel shall be at the expense of the Partnership.  The Partnership shall not be entitled toassume the defense of any Proceeding brought by or on behalf of the Partnershipor as to which the Indemnitee shall have made the conclusion provided for inclause (ii) of this Section 3. The Partnership shall not settle any Proceeding in any manner, whichwould impose any penalty, limitation, admission, Loss or Expense on the Indemniteewithout the Indemnitee’s prior written consent. Neither the Partnership nor the Indemnitee will unreasonably withholdits consent to any proposed settlement, provided that the Indemnitee may, inthe Indemnitee’s sole discretion, withhold consent to any proposed settlementthat would impose any penalty, limitation, admission, Loss or Expense on theIndemnitee.

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# 4.             Limitation on Indemnification.  Notwithstanding the terms of Section 2:

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## (a)           the obligations of the Partnership set forth in Section 2shall be subject to the condition that the Reviewing Party shall not havedetermined (based on a written opinion of outside counsel in all cases) that theIndemnitee would not be permitted to be so indemnified under the PartnershipAgreement; provided, however, that if the Indemnitee hascommenced or thereafter commences legal proceedings in a court of competentjurisdiction to secure a determination that the Indemnitee should beindemnified under the Partnership Agreement, any determination made by theReviewing Party that the Indemnitee would not be permitted to be indemnifiedunder applicable law shall not be binding and the Indemnitee shall not berequired to reimburse the Partnership for any advancement of Expenses until afinal judicial determination is made with respect thereto (as to which allrights of appeal therefrom have been exhausted or lapsed) and the Partnershipshall not be obligated to indemnify or advance to the Indemnitee any additionalamounts covered by such Reviewing Party determination (unless there has been adetermination by a court of competent jurisdiction that the Indemnitee would bepermitted to be so indemnified under applicable law);

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## (b)           the Partnership shall not be required to indemnify oradvance Expenses to the Indemnitee with respect to a Proceeding (or partthereof) by the Indemnitee (and not by way of defense), except if thecommencement of such Proceeding (i) was authorized in the specific case bythe Board of Directors or (ii) brought to establish or enforce a right toindemnification and/or advancement of Expenses arising under this Agreement,the Partnership Agreement, the Act or otherwise;

 

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## (c)           the Partnership shall not be obligated pursuant to the termsof this Agreement to indemnify the Indemnitee for any amounts paid insettlement of a Proceeding unless the Partnership consents in advance inwriting to such settlement, which consent shall not be unreasonably withheld;

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## (d)           the Partnership shall not be obligated pursuant to the termsof this Agreement to indemnify the Indemnitee on account of any suit in whichjudgment is rendered against the Indemnitee for an accounting of profits madefrom the purchase or sale by the Indemnitee of securities of the Partnershippursuant to the provisions of Section l6(b) of the SecuritiesExchange Act of 1934, as amended or similar provisions of any federal, state orlocal statutory law;

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## (e)           the Partnership shall not be obligated pursuant to the termsof this Agreement to indemnify the Indemnitee if a final decision by a courthaving jurisdiction in the matter shall determine that such indemnification isnot lawful; and

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## (f)            the Partnership shall not beobligated pursuant to the terms of this Agreement to make any payment inconnection with any Proceeding to the extent the Indemnitee has otherwiseactually received payment (under any insurance policy or otherwise) of theamounts otherwise indemnifiable under this Agreement.

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# 5.             Change in Control.  The Partnership agrees that if there is aChange in Control, then with respect to all matters thereafter arisingconcerning the rights of the Indemnitee to indemnity payments and Expenseadvances under this Agreement, the Partnership Agreement and any otheragreements now or hereafter in effect relating to Proceedings for IndemnifiableEvents, the Partnership shall seek legal advice only from special independentcounsel selected by the Indemnitee and approved by the Board of Directors(which approval shall not be unreasonably withheld), and who has not otherwiseperformed services for the Partnership (other than in connection with suchmatters) or the Indemnitee.  Withoutlimiting the Board of Director’s obligation not to unreasonably withhold its approval,in the event that the Indemnitee and the Partnership are unable to agree on theselection of the special independent counsel, such special independent counselshall be selected by lot from among at least five nationally recognized lawfirms each in New York City, New York, each having no less than 250lawyers.  Such selection shall be made inthe presence of the Indemnitee (and the Indemnitee’s legal counsel or either ofthem, as the Indemnitee may elect).  Suchspecial independent counsel, among other things, shall determine whether and towhat extent the Indemnitee would be permitted to be indemnified under applicablelaw and shall render its written opinion to the Partnership and the Indemniteeto such effect.  The Partnership agreesto pay the reasonable fees of the special independent counsel referred to aboveand to fully indemnify such counsel against any and all expenses (includingattorneys’ fees), Proceedings, liabilities and damages arising out of orrelating to this Agreement or its engagement pursuant to this Agreement.

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# 6.             Subrogation.  In the event of payment to the Indemniteeunder this Agreement, the Partnership shall be subrogated to the extent of suchpayment to all of the rights of recovery of the Indemnitee, who shall executeall papers required and shall do everything that may be necessary to securesuch rights, including the execution of such documents necessary to enable the Partnershipeffectively to bring suit to enforce such rights.

 

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# 7.             No Presumptions.  For purposes of this Agreement, thetermination of any Proceeding against the Indemnitee by judgment, order,settlement (whether with or without court approval) or conviction, or upon aplea of nolo contendere, or its equivalent, shall not create a presumption thatthe Indemnitee did not meet any particular standard of conduct or have anyparticular belief or that a court has determined that indemnification is notpermitted by applicable law.  Inaddition, neither the failure of the Reviewing Party to have made adetermination as to whether the Indemnitee has met any particular standard ofconduct or had any particular belief, nor an actual determination by theReviewing Party that the Indemnitee has not met such standard of conduct or didnot have such belief shall be a defense to the Indemnitee’s Proceeding forindemnification or create a presumption that the Indemnitee has not met anyparticular standard of conduct or did not have any particular belief.

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# 8.             Non-Exclusivity.  The rights conferred on the Indemnitee bythis Agreement shall be in addition to, and shall not be deemed exclusive of,any other rights which the Indemnitee may have or hereafter acquire under anystatute, the certificate of limited partnership of the Partnership and thePartnership Agreement, any other agreement, vote of unitholders or a resolutionof directors, or otherwise, and to the extent that during the IndemnificationPeriod such rights are more favorable than the rights currently provided underthis Agreement to the Indemnitee, the Indemnitee shall be entitled to the fullbenefits of such more favorable rights to the extent permitted by law.  Other than as set forth in this Section 8,in the case of any inconsistency between the indemnification provisions of thisAgreement and any other agreement relating to the indemnification of theIndemnitee, the indemnification provisions of this Agreement shall control.

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# 9.             Liability Insurance.  The Partnership may, to the extent that theBoard of Directors in good faith determines it to be economically reasonable,maintain a policy of directors’ and officers’ liability insurance, on suchterms conditions as may be approved by the Board of Directors.  To the extent the Partnership maintainsdirectors’ and officers’ liability insurance, the Indemnitee shall be coveredby such policy in such a manner as to provide the Indemnitee the same rightsand benefits as are accorded to the most favorably insured of the GeneralPartner’s directors, if the Indemnitee is a director, or of the General Partner’sofficers, if the Indemnitee is not a director but is an officer.  Notice of any termination or failure to renewsuch policy shall be provided to the Indemnitee promptly upon the Partnership’sbecoming aware of such termination or failure to renew.  The Partnership shall provide to theIndemnitee copies of all such insurance policies and any endorsements theretowhenever such documents have been provided to the Partnership.

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# 10.           Amendment/Waiver.  No supplement, modification or amendment ofthis Agreement shall be binding unless executed in writing by both of theparties hereto.  No waiver of any of theprovisions of this Agreement shall be deemed or shall constitute a waiver ofany other provisions of this Agreement (whether or not similar) nor shall suchwaiver constitute a continuing waiver. Any waiver to this Agreement shall be in writing.

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# 11.           Binding Effect.  This Agreement shall be binding upon andinure to the benefit of and be enforceable by the parties hereto and theirrespective successors, including any direct or indirect successor by purchase,merger, consolidation or otherwise to all or substantially all of 

 

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# the business and/or assets of the Partnership,assigns, spouses, heirs, and personal and legal representatives.

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# 12.           Survival.  This Agreement shall continue in effectduring the Indemnification Period, regardless of whether the Indemniteecontinues to serve as an officer or director of the General Partner or of anyother enterprise at the General Partner’s request.

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# 13.           Severability.  The provisions of this Agreement shall be severablein the event that any provision of this Agreement (including any provisionwithin a single section, paragraph or sentence) is held by a court of competentjurisdiction to be invalid, void or otherwise unenforceable, and the remainingprovisions shall remain enforceable to the fullest extent permitted by law.

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# 14.           Period of Limitations.  No legal action shall be brought and no causeof action shall be asserted by or in the right of the Partnership against theIndemnitee or the Indemnitee’s estate, spouse, heirs, executors or personal orlegal representatives after the expiration of three years from the date ofaccrual of such cause of action, and any claim or cause of action of the Partnershipshall be extinguished and deemed released unless asserted by the timely filingof a legal action within such three year period; provided, however,that if any shorter period of limitations is otherwise applicable to any suchcause of action, such shorter period shall govern.

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# 15.           Counterparts.  This Agreement may be executed incounterparts, each of which shall be deemed to be an original and all of whichtogether shall be deemed to be one and the same instrument, notwithstandingthat both parties are not signatories to the original or same counterpart.

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# 16.           Governing Law.  This Agreement shall be governed by andconstrued and enforced in accordance with the laws of the State of Delawareapplicable to contracts made and to be performed in such state without givingeffect to the principles of conflicts of laws.

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|   | OSG AMERICA L.P.,      |
|--------|------------------------|
|   |                   |   |
|   | By:                    | OSG America LLC, its general partner |
|   |                   |   |
|   |                   |   |
|   | By                     | /s/ Myles R. Itkin |   |
|   |                   | Myles R. Itkin |
|   |                   | Chief Financial Officer |
|   |                   |   |
|   |                   |   |
|   | /s/ Kathleen C. Haines |   |
|   | Kathleen C. Haines     |
|        |                        |  |  |  |

 

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