Document:

PURCHASE AGREEMENT DATED JULY 1, 2007

Exhibit 10.2

Date: 1st July 2007

TEEKAY CORPORATION

and

TEEKAY OFFSHORE PARTNERS L.P.

 

PURCHASE AGREEMENT

 

relating to

the sale and purchase of

the entire ownership interests in

NAVION BERGEN L.L.C.

And

NAVION BERGEN AS

 

 

INDEX

	 	 	 	 	 
	Clause	 	Page	 
	1 DEFINITIONS AND INTERPRETATION
	 	 	1	 
	 

	2 AGREEMENT FOR SALE
	 	 	5	 
	 

	3 CONSIDERATION
	 	 	6	 
	 

	4 COMPLETION
	 	 	7	 
	 

	5 WARRANTIES
	 	 	8	 
	 

	6 REMEDIES OF THE PURCHASER
	 	 	10	 
	 

	7 IMPLEMENTATION
	 	 	12	 
	 

	8 COSTS
	 	 	13	 
	 

	9 OTHER PROVISIONS
	 	 	13	 
	 

	10 NOTICES
	 	 	15	 
	 

	11 GOVERNING LAW AND JURISDICTION
	 	 	16	 
	 

	12 TERMINATION
	 	 	17	 
	 

	SCHEDULE A WARRANTIES AND REPRESENTATIONS
	 	 	18	 
	 

	SCHEDULE B THE VESSEL
	 	 	32	 
	 

	SCHEDULE C COUNTER-INDEMNITY AGREEMENT
	 	 	 	 
	 

	EXECUTION PAGE
	 	 	32	 

 

 

THIS AGREEMENT is made as of the 29th day of June 2007

BETWEEN:

	(1)	 	Teekay Corporation, a Marshall Islands company having a principal office at Bayside House,
Bayside Executive Park, West Bay Street & Blake Road, P.O. Box AP-59212, Nassau, Bahamas (the
“Vendor”); and
	 
	(2)	 	Teekay Offshore Partners L.P., a Marshall Islands limited partnership having a principal
office at Bayside House, Bayside Executive Park, West Bay Street & Blake Road, P.O. Box
AP-59212, Nassau, Bahamas (the “Purchaser”)

WHEREAS:

	(A)	 	 Navion Bergen LLC, as owner of the m.v. NAVION BERGEN (the “Vessel”), has bareboat
chartered the Vessel to Navion Bergen AS pursuant to a bareboat charterer dated December 1,
2006 (the “Head Charter”) and Navion Bergen AS, as disponent owner of the Vessel, has bareboat
chartered the Vessel to Fronape International Company of P.O. Box 714 Georgetown, Grand
Cayman, Cayman Islands (the “Charterer”) pursuant to a novation agreement on December 1, 2006
of the bareboat charter dated January 16, 2006 between the Charterer, counter-signed by
Petrobras Transporte S.A. — Transpetro of Av Presidente Vargas, 328-20091-660 Rio de Janiero,
RJ, Brazi,l and Teekay Norway AS (the bareboat charter as novated is hereinafter referred to
as the “Charter”).
	 
	(B)	 	 The Vessel has been converted to a dynamically positioned shuttle tanker for service
under the Charter and the purchase of the Vessel by Navion Bergen LLC and its conversion for
US$100,000,000 are financed or are to be financed by means of a US$70,000,000 secured
revolving credit facility from DnB Nor Bank ASA as agent.
	 
	(C)	 	 The Vendor is the legal and beneficial owner of 100% of the limited liability interests
of Navion Bergen LLC and the ultimate beneficial indirect owner of 100% of all of the shares
of the Navion Bergen AS (together the “Interests”).
	 
	(D)	 	 The Vendor has agreed to sell or procure the sale of, and the Purchaser has agreed to
purchase itself and through its wholly owned subsidiary Teekay Norway AS, the Interests, on
and subject to the terms and conditions hereinafter appearing.

IT IS AGREED as follows:

	1	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Definitions. In this Agreement, including the Schedules and the recitals, unless the context
requires otherwise:
	 
	 	 	“Business Day” means a day (other than a Saturday or Sunday) on which banks in New York are
open for the transaction of normal banking business (other than solely for trading and
settlement in Dollars) or, for the purposes of Clause 10, a day on which banks are open for
the transaction of normal banking business in the country of receipt of a notice.
	 
	 	 	“Business Information” means all information and records (in whatever form held and whether
commercial, financial, technical or otherwise) relating to the Company or the

 

 

	 	 	business or activities or affairs of the Company, which can be reasonably considered to be
confidential to the Company.
	 
	 	 	“Charter” means the bareboat charter in respect of the Vessel dated 16th January
2006 between Navion Bergen AS the Charterer and Transpetro (as novated by a novation
agreement dated December 1, 2006) as defined in Recital (A).
	 
	 	 	“Transpetro” means Petrobras Transporte S.A. — Transpetro of Av Presidente Vargas,
328-20091-660 Rio de Janiero, RJ, Brazil.
	 
	 	 	“Charterer” means Fronape International Company of P.O. Box 714 Georgetown, Grand Cayman,
Cayman Islands.
	 
	 	 	“Claim” means a claim for breach of Warranty by the Purchaser against the Vendor.
	 
	 	 	“Closing” means completion of the sale and purchase of the Interests in accordance with
Clause 4.1.
	 
	 	 	“Closing Date” means 2nd July 2007, being the day on which Closing takes place.
	 
	 	 	“Companies” means:
	 
	 	 	(1) Navion Bergen L.L.C. (“Navion Bergen LLC”), a limited liability company formed under the
laws of the Republic of the Marshall Islands with a registered office at Trust Company
Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and a principal
office c/o Teekay Corporation, Bayside House, Bayside Executive Park, West Bay Street &
Blake Road, P.O. Box AP-59212, Nassau, Bahamas.; and
	 
	 	 	(2) Navion Bergen AS (“Navion Bergen AS”) a limited company incorporated and registered
under the laws of Norway with a business address at Verven 4, 4014 Stavanger, Norway.
	 
	 	 	“Consideration” means the consideration payable by the Purchaser for the Interests as stated
in Clause 3.
	 
	 	 	“Contracts” means those agreements, contracts, understandings and arrangements to which the
Companies respectively are a party or to which any of the Interests, the Vessel or any other
assets of the Companies are subject or by which they are bound which are material to the
Companies or their trading activities, set out in the Disclosure Schedule.
	 
	 	 	“Counter-Indemnity Agreement” means the agreement in the form set out in Schedule C.
	 
	 	 	“Covered Environmental Losses” means all environmental and toxic tort Losses and
Expenses suffered or incurred by the Purchaser, the Purchaser Group Companies or the Company
by reason of or arising out of:

	 	 	(a) any violation or correction of violation of Environmental Laws; or

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	 	 	(b) any event or condition associated with ownership or operation by the Vendor or the
Vendor Group Companies of the Interests (including, without limitation, the presence
of Hazardous Substances on, under, about or migrating to or from the Vessel or the disposal
or release of Hazardous Substances generated by operation of the Vessel), including, without
limitation, (i) the cost and expense of any investigation, assessment, evaluation,
monitoring, containment, cleanup, repair, restoration, remediation or other corrective
action required or necessary under Environmental Laws, (ii) the cost or expense of the
preparation and implementation of any closure, remedial, corrective action or other plans
required or necessary under Environmental Laws and (iii) the cost and expense for any
environmental or toxic tort pre-trial, trial or appellate legal or litigation support work,
	 
	 	 	but only to the extent that such violation complained of under clause (a), or such events or
conditions included in clause (b), occurred before the Closing Date; and, provided that, in
no event shall Losses or Expenses to the extent arising from a change in any Environmental
Law after the Closing Date be deemed “Covered Environmental Losses”.
	 
	 	 	“Disclosed” means fully, fairly and expressly disclosed by the Transaction Documents or the
Disclosure Schedule and, for this purpose “fairly disclosed” means any information disclosed
in such manner and in such detail or with sufficient explanation as to enable a reasonable
purchaser to make an informed assessment or estimation of the matter concerned and its
financial, operational or other consequences to the Companies.
	 
	 	 	“Disclosure Schedule” means the Disclosure Schedule provided to the Purchaser by the Vendor
concurrently with the execution and delivery of this Agreement.
	 
	 	 	“Dollars” means United States Dollars.
	 
	 	 	“Environmental Laws” means all federal, state, foreign and local laws, statutes, rules,
regulations, orders, judgments and ordinances relating to protection of health and safety
and the environment, each as amended up to and including the Closing Date..
	 
	 	 	“Hazardous Substances” means (a) substances which contain substances defined in or regulated
under applicable Environmental Laws; (b) petroleum and petroleum products, including crude
oil and any fractions thereof; (c) natural gas, synthetic gas and any mixtures thereof; (d)
any substances with respect to which a federal, state, foreign or local agency requires
environmental investigation, monitoring, reporting or remediation; (e) any hazardous waste
or solid waste, within the meaning of any Environmental Law; (f) any solid, hazardous,
dangerous or toxic chemical, material, waste or substance, within the meaning of and
regulated by any Environmental Law; (g) any radioactive material; and (h) any
asbestos-containing materials that represent a health hazard.
	 
	 	 	“Head Charter” means the bareboat charter of the Vessel dated 1st December 2006
made between Navion Bergen LLC and Navion Bergen AS as defined in Recital (A).
	 
	 	 	“Indebtedness” means any borrowings or other indebtedness whatsoever owed by either of the
Companies.

3

 

	 	 	“Insolvency Event” means in relation to any of the Purchaser, the Vendor or either of the
Companies (as the context may require) that any of the following actions has occurred in
relation to it:

	 	(i)	 	an order has been made or an effective resolution passed or other proceedings
or actions taken (including, without limitation, the presentation of a petition) with
a view to its administration, bankruptcy, winding-up, liquidation or dissolution; or
	 
	 	(ii)	 	it has had a receiver, administrative receiver, manager or administrator
appointed over all or any substantial part of its undertaking or assets; or
	 
	 	(iii)	 	any event has occurred or situation arisen in any jurisdiction that has a
substantially similar effect to any of the foregoing.

	 	 	“Interests” means 100% of the entire equity interests or share capital in each of the
Companies.
	 
	 	 	“Loan Facility Agreement” means the loan facility agreement dated December 28, 2006 among
(i) Navion Bergen L.L.C. as borrower, (ii) the banks and financial institutions listed
therein as lenders and (iii) DnB NOR Bank ASA as agents, mandated lead arranger, bookrunner
and security trustee (the “Agent”) and Fortis Capital Corp, as mandated lead arranger and
bookrunner, providing for a term loan facility of up to US$70,000,000.
	 
	 	 	“Losses and Expenses” means liabilities, losses, damages, claims, demands, awards and
expenses (including, without limitation, legal costs) and includes, for the avoidance of
doubt, any value added tax (VAT) (or similar tax) payable in relation to any such matter,
circumstance or item (except to the extent that the party claiming Losses and Expenses
obtains credit for such VAT as input tax).
	 
	 	 	“Purchaser Group Companies” means the Purchaser and any subsidiaries thereof and the
Purchaser’s general partner.
	 
	 	 	“Security Interest” means any mortgage, charge (whether fixed or floating), pledge,
lien, hypothecation, encumbrance, assignment, right of set-off, trust arrangement, title
retention or other security interest or other agreement or arrangement of any kind having
the effect of conferring security.
	 
	 	 	“Specified Rate” is the rate of interest equal to yearly LIBOR from time to time plus 100
basis points.
	 
	 	 	“Tax” or “Taxation” means any tax, duty, contribution, impost, levy or charge in the nature
of tax, whether domestic or foreign, and any fine, penalty, surcharge or interest in
relation thereto, including without limitation (and without prejudice to the foregoing)
corporation tax, income tax (including tax failing to be deducted or withheld from or
accounted for in respect of any payment), capital gains tax, value added tax, customs excise
and import duties, stamp duty, stamp duty reserve tax, and any other payment whatsoever that
the Company is or may be or become bound to make to any person and that is or purports to be
in the nature of taxation or otherwise by reason of any taxation statutes.

4

 

	 	 	“Taxation Authority” means any national, local municipal, governmental, state, federal or
fiscal, revenue, customs or excise authority, body, agency or official anywhere in the world
having, or purporting to have power or authority in relation to Tax.
	 
	 	 	“Transaction Documents” means this Agreement and the other documents delivered at Closing
pursuant to Clause 4.
	 
	 	 	“Vendor’s Account” means such account of the Vendor as the Vendor may specify to the
Purchaser from time to time.
	 
	 	 	“Vendor Group Companies” means the Vendor and any subsidiary of the Vendor, from time to
time (except, with effect from Closing, the Companies and any Purchaser Group Companies).
	 
	 	 	“Vessel” means the shuttle tanker vessel “NAVION BERGEN” owned by Navion Bergen L.L.C.,
details of which are set out in Schedule B.
	 
	 	 	“Warranties” means the representations and warranties set out in Clause 5.1 and Schedule A.
	 
	1.2	 	Interpretation
	 
	(a)	 	Reference to:

	 	(i)	 	a person includes a legal or natural person, partnership, trust, company,
government or local authority department or other body (whether corporate or
unincorporated);
	 
	 	(ii)	 	a statutory or regulatory body shall include its successors and any substituted
body;
	 
	 	(iii)	 	the singular includes the plural and vice versa; and
	 
	 	(iv)	 	one gender includes all genders.

	(b)	 	Unless otherwise stated, a reference to a Clause, sub-clause or Schedule is a reference to a
Clause or sub-clause of, or Schedule to, this Agreement and a reference to this Agreement
includes its Schedules.
	 
	(c)	 	Clause headings in this Agreement and in the Schedules are for ease of reference only and do
not affect its construction.
	 
	(d)	 	In construing this Agreement the so-called ejusdem generis rule does not apply and
accordingly the interpretation of general words shall not be restricted by words indicating a
particular class or particular examples.
	 
	2	 	AGREEMENT FOR SALE
	 
	2.1	 	Sale and purchase of Interests. Subject to the other provisions of this Agreement, the
Vendor shall sell the Interests of the Vendor in Navion Bergen L.L.C. to the Purchaser

5

 

	 	 	and the
Purchaser shall purchase the Interests with effect from July 1, 2007. The Vendor shall procure
the sale by wholly owned subsidiary Teekay Shipping Norway AS of all the Interests in Navion
Bergen AS to Teekay Norway AS. The purchase by Teekay Norway AS of the Interests in Navion
Bergen AS is at the direction of the Purchaser.
	 
	2.2	 	Absolute title to Interests; no Security Interest in Interests. The Vendor shall take all
steps within its power and control (but without any obligation to expend any material amount)
to procure that the Purchaser and Teekay Norway AS (as appropriate) will duly obtain absolute
title to the entire legal and beneficial interest in the Interests, and all rights (whether in
respect of distributions, voting or otherwise) that at the date of this Agreement or any later
time are conferred on or by any of the Interests, free from any Security Interest.
	 
	3	 	CONSIDERATION
	 
	3.1	 	Payment of Consideration. The Consideration shall be the sum of US$100,000,000 (One Hundred
Million United States Dollars) which shall include the assumption of any amount drawn under
the Loan Facility Agreement, payable as follows:

	 	 	 	 	 
	 

	 	Intermediary Bank:
	 	Bank of New York,
	 

	 	 	 	New York
	 

	 	Intermediary Bank’s SWIFT:
	 	IRVTUS3N
	 

	 	ABA:
	 	021 000 018 
	 

	 	Beneficiary Bank:
	 	DnB NOR Bank ASA,
	 

	 	 	 	New York
	 

	 	Address:
	 	200 Park Avenue, New York, NY
	 

	 	 	 	10166-0396 
	 

	 	Account Number:
	 	8026001499 
	 

	 	Beneficiary Bank’s SWIFT:
	 	DNBAUS33
	 

	 	Account Name:
	 	Teekay Corporation
	 

	 	Account Number:
	 	14712001 
	 

	 	Currency:
	 	USD

	3.2	 	Vendor’s Undertakings. In addition to the transfer of the Interests to the Purchaser, the
Vendor further undertakes as follows:
	 
	(a)	 	that on Closing, it shall procure that the Companies shall have no net liabilities other than
the liabilities disclosed in the Disclosure Statement;
	 
	(b)	 	following the Closing Date and upon receiving any notices, correspondence, information or
enquiries in relation to either of the Companies, the Interests, the Vessel or the Contracts,
it shall forthwith pass copies thereof to the Purchaser and shall hold in trust for the
Companies and account forthwith for any monies received after the Closing Date on account of
the Companies.

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	4	 	COMPLETION
	 
	4.1	 	Timing and place of Closing. Subject to the provisions of this Agreement, Closing shall be
effected by the Vendor satisfying its obligations under Clauses 4.2 and by the Purchaser
satisfying its obligations under Clause 4.3 and shall take place on the Closing Date.
	 
	4.2	 	Vendor’s Closing obligations. The Vendor shall deliver or procure that there are delivered
to the Purchaser on or before the Closing Date (as the context may permit):
	 
	(a)	 	duly executed transfers in respect of the Interests in favour of the Purchaser and/or Teekay
Norway AS (as appropriate), or as it may direct;
	 
	(b)	 	the certificates, if any, for the Interests (or an indemnity in the approved form for any
lost certificates);
	 
	(c)	 	a certified copy of the minutes of a meeting of the directors of the Vendor (certified as at
the date of Closing to be a certified copy of such resolutions in full force and effect and
certifying that such resolutions have not been revoked), authorising the execution of the
Transaction Documents (to which it is party);
	 
	(d)	 	confirmation in a form satisfactory to the Purchaser that the transfer of the Interests in
Navion Bergen AS has been duly authorised and effected;
	 
	(e)	 	all statutory and minute books (in every case written up to, but not including, the Closing
Date), common seals, certificates of formation and certificates of amendment (or equivalent),
cheque books, bank mandates and other books and records (whether statutory, financial or
otherwise) of the Companies as applicable and all certificates and documents of title relating
to any investments of the Companies;
	 
	(f)	 	the original copies of the Contracts;
	 
	(g)	 	evidence satisfactory to the Purchaser that all amounts payable by the Companies under any
loan facilities made available by the Vendor (other than with respect to amounts Disclosed as
liabilities in the Disclosure Schedule), any bank, financial institution, or any other person
whether on the basis of any Security Interest provided by the Companies, and whether in
relation to the Vessel or otherwise, have been paid in full and all associated Security
Interests (including, without limitation, those identified in the Disclosure Schedule) and any
other agreements or obligations entered into by the Companies for the benefit of themselves
respectively or any other person have been terminated or released and, in relation to Security
Interests, reassigned to the Companies or to the person giving the same; and
	 
	(h)	 	the duly executed certificate of an officer of the Vendor dated on the Closing Date, in form
reasonably acceptable to the Purchaser, certifying on behalf of the Vendor to the accuracy of
representations and Warranties of the Vendor contained in this Agreement.
	 
	(i)	 	The duly executed certificate of an officer of the Vendor dated on the Closing Date, in form
reasonably acceptable to the Purchaser, certifying that the Vessel has been accepted by the
Charterer and in on hire under the terms of the Charter and attaching a

7

 

	 	 	copy of a protocol of
delivery and acceptance under the Charter duly executed by the Charterer to this effect or any
other document reasonably acceptable to the Purchaser and executed by the Charterer evidencing
such acceptance.
	 
	4.3	 	Purchaser’s Closing obligations. The Purchaser shall on Closing and subject to the transfer
of the Interests:
	 
	(a)	 	deliver or procure that there are delivered to the Vendor a certified copy of the minutes of
a meeting of the directors of its general partner, authorising the execution of this Agreement
and any other Transaction Document that it is to execute pursuant to this Agreement;
	 
	(b)	 	pay to the Vendor the Consideration by transferring such amount to the Vendor’s Account for
value on the Closing Date.
	 
	4.4	 	Closing obligations not fulfilled. If either party fails, for any reason, to comply with any
of its obligations under the foregoing provisions of this Clause 4, the other party may, at
its option:
	 
	(a)	 	by written notice to the first party defer the date for Closing by one or more periods that
shall not exceed 20 (twenty) Business Days in aggregate in respect of either all of the
parties’ obligations under the foregoing provisions of this Clause 4 or such of those
obligations that have not been complied with; or
	 
	(b)	 	proceed to Closing so far as practicable but without prejudice to the second party’s rights
(whether under this Agreement or the general law) as regards the obligations with which the
first party has not complied; or
	 
	(c)	 	waive all or any of the obligations in question of the first party.
	 
	(d)	 	If Closing is deferred to another date in accordance with Clause 4.4(a), and Closing is
effected, the provisions of this Agreement shall apply as if that other date were the Closing
Date.
	 
	5	 	WARRANTIES
	 
	5.1	 	General. The Vendor represents, warrants and undertakes, subject to Clause 5.8, that each
statement in Schedule A is at the date of this Agreement, and will (save as Disclosed [in the
Disclosure Schedule] [in writing not later than the time of Closing]) at the Closing Date
remain, true, accurate and not misleading in any respect on the basis that a reference to the
Closing Date were substituted for any express or implied reference to the date of this
Agreement in that Schedule.
	 
	5.2	 	Claims. The Vendor hereby unconditionally and irrevocably covenants with the Purchaser that,
subject always to the limitations set out in Clause 6, it will indemnify the Purchaser, Teekay
Norway AS and the Companies against all Losses and Expenses that any of the Purchaser Group
Companies or the Companies may suffer or incur or pay in enforcing its rights in connection
with any matter referred to in this Agreement or any of the Transaction Documents including,
without limitation:

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	 	(i)	 	the disputing and/or settlement of any Claims and any steps taken to avoid
and advice sought in connection with any actual, threatened or anticipated Claims;
	 
	 	(ii)	 	any legal proceedings in which any of the Purchaser Group Companies or the
Companies makes a Claim; and
	 
	 	(iii)	 	the enforcement of any such settlement or judgement.

	5.3	 	Reliance on Warranties. The Vendor acknowledges that:

	 	(a)	 	the Purchaser has been induced to enter and is entering into this Agreement and
the other Transaction Documents on the basis of and in reliance upon the Warranties;
	 
	 	(b)	 	the Purchaser may rely on the Warranties to the exclusion of any other
information, and that, with the exception of matters set forth in the Disclosure
Schedule, the Purchaser’s rights in respect thereof will not be in any way impaired as
a result of any other information being possessed by or available to any Purchaser
Group Companies or any officer, employee, professional or financial adviser of, or
person acting on behalf of, the Purchaser or any Purchaser Group Companies.

	5.4	 	Warranties are separate and independent. Each Warranty shall be construed as a separate and
independent warranty and, save as expressly provided otherwise, shall not be limited or
restricted by reference to or inference from any other terms of this Agreement or any other
Warranty.
	 
	5.5	 	Reduction in Consideration. Any payments made by the Vendor to the Purchaser in respect of
Claims shall, to the extent lawfully possible, be treated by the parties as a reduction in the
Consideration; provided, however, that this Clause 5.5 shall not in any way limit or restrict
the amount recoverable by the Purchaser or any other person under this agreement to the amount
of the Consideration or any other amount (but this is without prejudice to the limitations set
out in Clause 6).
	 
	5.6	 	Awareness of Vendor and Ordinary Course of Business. Where any Warranty is qualified by
reference to the awareness, knowledge, information or belief of the Vendor (or any similar
expression), the Vendor shall be deemed to have such awareness, knowledge, information or
belief as it would have after having made reasonable enquiry of the senior executive managers
and officers of the Vendor. In relation to each of the Warranties concerning the assets,
liabilities, Contracts, Vessel or results of the Companies, such Warranties shall be deemed to
be qualified by reference to exclude any matters (whether or not Disclosed) arising in the
ordinary and normal course of trading since 1st May 2007.
	 
	5.7	 	Provision of information. The Vendor undertakes promptly to provide the Purchaser with any
information that the Purchaser may by written notice request in relation to:
	 
	(a)	 	any of the Warranties or any statement of fact contained elsewhere in this Agreement or any
other Transaction Document; or

9

 

	(b)	 	the Disclosure Schedule or any other disclosure made or information provided (or purportedly
made or provided) under this Clause 5.7; or
	 
	(c)	 	any matter or question connected with or arising out of any of the foregoing,
	 
	 	 	but this only applies to information that is (either at the date of the Agreement or at the
date of the request) in the possession of the Vendor or that the Vendor or any of its
professional advisers can reasonably be expected to obtain and present without undue
efforts.
	 
	5.8	 	Disclosure in Disclosure Schedule. The Vendor shall not have any liability in respect of any
Claim if and to the extent that any fact, matter or circumstance that causes any of the
Warranties to be breached or that might result in a Claim or possible Claim has been Disclosed
in the Disclosure Schedule or otherwise in any of the Transaction Documents.
	 
	5.9	 	Notification of potential Claims before Closing. If, at any time before Closing, the Vendor
becomes aware of any Claim or any matter that could reasonably be expected to cause a Claim to
arise or any matter that at Closing would constitute a Claim or could reasonably be expected
to cause a Claim to arise, it shall forthwith disclose the same in writing to the Purchaser.
	 
	6	 	REMEDIES OF THE PURCHASER
	 
	6.1	 	Survival. Subject to the limitations and other provisions of this Agreement and the
Transaction Documents, the representations and warranties of the Vendor contained in this
Agreement (including the Schedules hereto), the Disclosure Schedule and the Transaction
Documents shall survive the Closing and remain in full force and effect for a period of
12 months after the Closing Date; provided, however, that (a) the Warranties in Clauses 1.2
(Title to Interests), 1.3 (No arrangements relating to share capital), 11 (Taxation) and 12.1
(No brokers fees) of Schedule A to this Agreement shall survive until, and shall terminate
upon, the date of expiration of the applicable statute of limitations with respect to the
liability in question. The covenants and agreements of the Vendor contained in this Agreement
and the Transactions Documents that by their terms extend beyond the Closing Date shall not
terminate until all obligations with respect thereto have been performed or satisfied or shall
have expired or been terminated in accordance with their terms.
	 
	6.2	 	Indemnification by the Vendor
	 
	(a)	 	The Vendor agrees, subject to the other terms and conditions of this Agreement and the
Transaction Documents, to indemnify the Purchaser, Teekay Norway AS and the Purchaser Group
Companies against and hold it harmless from any and all (i) Losses and Expenses to the
Purchaser, Teekay Norway AS, any Purchaser Group Company or the Companies arising out of or
related to the breach of any representation, warranty, covenant or agreement of the Vendor in
this Agreement (including the Schedules hereto), the Disclosure Schedule and the Transaction
Documents, to the extent Vendor is notified by the Purchaser of such Losses or Expenses prior
to expiration of the applicable survival period set forth in Clause 6.1 above, (ii) any
Covered Environmental Losses relating to the Interests to the extent that the Vendor is
notified by the Purchaser of any such Covered Environmental Losses within five (5) years
after the Closing Date;

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	 	 	(iii)  Losses or Expenses to the Purchaser, the Purchaser Group
Companies or the Companies arising from (A) the failure of the Purchaser Group Companies,
immediately after the Closing Date,
to be the owner of such ownership interests in and to the
Interests as are necessary to enable the Purchaser Group Companies to own and operate the
Interests in substantially the same manner that the Interests were owned and operated by the
Vendor Group Companies immediately prior to the Closing Date or (B) the failure of the
Purchaser Group Companies to have on the Closing Date any consent or governmental permit
necessary to allow the Purchaser Group Companies to own or operate the Interests in
substantially the same manner that the Interests were owned and operated by the Vendor Group
Companies immediately prior to the Closing Date, in each of clauses (A) and (B) above, to the
extent that the Vendor is notified by the Purchaser of such Losses or Expenses within three
(3) years after the Closing Date; and (iv) all federal, state, foreign and local income tax
liabilities attributable to the operation of the Interests prior to the Closing Date.
	 
	(b)	 	The aggregate liability of Vendor under Clause 6.2(a) above shall not exceed $10 million.
Furthermore, no claim may be made against Vendor for indemnification
pursuant to Clause 6.2(a) unless the
aggregate dollar amount of all claims for
indemnification pursuant to such clause
shall exceed $500,000, in which case Vendor
shall be liable for claims for
indemnification only to the extent such
aggregate amount exceeds $500,000.
	 
	6.3	 	General Provisions.
	 
	(a)	 	The Purchaser agrees that within a reasonable period of time after it becomes aware of facts
giving rise to a claim for indemnification pursuant to Clause 6.2, it will provide notice
thereof in writing to the Vendor specifying the nature of and specific basis for such claim.
	 
	(b)	 	The Vendor shall have the right to control all aspects of the defence of (and any
counterclaims with respect to) any claims brought against the Purchaser, Teekay Norway AS, the
Purchaser Group Companies or the Companies that are covered by the indemnification set forth
in Clause 6.2, including, without limitation, the selection of counsel, determination of
whether to appeal any decision of any court and the settling of any such matter or any issues
relating thereto; provided, however, that no such settlement shall be entered into without the
consent (which consent shall not be unreasonably withheld) of the Purchaser (with the
concurrence of the conflicts committee of Teekay Offshore Operating GP L.L.C.) unless it
includes a full release of the Purchaser, Teekay Norway AS, the Purchaser Group Companies and
the Companies from such matter or issues, as the case may be.
	 
	(c)	 	The Purchaser agrees to cooperate fully with the Vendor with respect to all aspects of the
defence of any claims covered by the indemnification set forth in Clause 6.2, including,
without limitation, the prompt furnishing to the Vendor of any correspondence or other notice
relating thereto that the Purchaser, Teekay Norway AS, the Purchaser Group Companies or the
Companies may receive, permitting the names of such parties to be utilized in connection with
such defence, the making available to the Vendor of any files, records or other information of
such parties that the Vendor considers relevant to such defence and the making available to
the Vendor of any employees of the Purchaser, Teekay Norway AS, the Purchaser Group Companies
or the Comapnies;

11

 

	 	 	provided, however, that in connection therewith the Vendor agrees to use
reasonable efforts to minimize the impact thereof on the operations of such parties and
further agrees to maintain the confidentiality of all files, records and other information
furnished by any such party pursuant to this Clause 6.3. In no event shall the obligation of
the Purchaser to cooperate with the Vendor as set forth in the immediately preceding sentence
be construed as imposing upon the Purchaser an obligation to hire and pay for counsel in
connection with the defence of any claims covered by the indemnification set forth in this
Clause 6; provided, however, that the Purchaser may, at its own option, cost and expense, hire
and pay for counsel in connection with any such defence. The Vendor agrees to keep any such
counsel hired by the Purchaser reasonably informed as to the status of any such defence
(including providing such counsel with such information related to any such defence as such
counsel may reasonably request) but the Vendor shall have the right to retain sole control
over such defence.
	 
	(d)	 	In determining the amount of any Loss or Expense for which the Purchaser, Teekay Norway AS,
any Purchaser Group Company or any of the Companies is entitled to indemnification under this
Agreement, the gross amount of the indemnification will be reduced by (i) any insurance
proceeds realized by such parties, and such correlative insurance benefit shall be net of any
incremental insurance premium that becomes due
and payable by such parties as a result of such claim, and (ii) all amounts recovered by
such parties under contractual indemnities from third persons. The Purchaser hereby agrees
to use commercially reasonable efforts to realize any applicable insurance proceeds or
amounts recoverable under such contractual indemnities; provided, however, that the costs
and expenses (including, without limitation, court costs and reasonable attorneys’ fees) of
the Purchaser, Teekay Norway AS, the Purchaser Group Companies or the Companies in
connection with such efforts shall be promptly reimbursed by the Vendor in advance of any
determination of whether such insurance proceeds or other amounts will be recoverable.
	 
	(e)	 	The Purchaser hereby acknowledges and agrees that its sole and exclusive remedy with respect
to any and all claims relating to the subject matter of this Agreement and the Transaction
Documents shall be pursuant to the indemnification provisions set forth in this Clause 6. In
furtherance of the foregoing, the Purchaser hereby waives, to the fullest extent permitted
under applicable law, any and all rights, claims and causes of action it may have against the
Vendor and the Vendor Group Companies arising under or based upon any federal, state, foreign
or local statute, law, ordinance, rule or regulation (including, without limitation, any such
rights, claims or causes of action arising under or based upon common law or otherwise).
	 
	7	 	IMPLEMENTATION
	 
	7.1	 	Further assurances. The Vendor shall (and shall procure that any other relevant person
shall) execute any deeds or documents and exercise or waive any rights and generally take any
action, including passing (or procuring that there is passed) any resolution of the Vendor or
(whilst the Vendor remains the registered owner) the Companies that the Purchaser may
reasonably require, which may be necessary for the Transaction Documents to be carried into
effect.

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	8	 	COSTS
	 
	8.1	 	Responsibility for costs. Except where expressly provided otherwise, each party shall pay
its own costs connected with the negotiation, preparation, execution and implementation of the
Transaction Documents and any matters connected therewith and investigating the affairs of the
Companies.
	 
	9	 	OTHER PROVISIONS
	 
	9.1	 	Performance Guarantees. The Vendor shall continue to guarantee the performance of the
Companies’ obligations under the Charter and the financing arrangements of the Vessel under
the Loan Facility Agreement. In consideration for such guarantees the Purchaser shall provide
a counter-indemnity in the form attached in Schedule C and pay a fee based on an amount of 10
bps per annum on the Loan as defined in the Loan Facility Agreement payable semi-annually to
the Vendor such amount becoming due and payable within 30 days after the relevant semi-annual
period following the Closing Date and each semi-annual period thereafter. In respect of a
period of less than semi-annual, the fee shall be paid on a pro rata basis accordingly.
	 
	9.2	 	Entire agreement. This Agreement together with the other Transaction Documents constitutes
the entire agreement between the parties regarding the sale and purchase of the Interests and
related matters and supersedes any prior drafts, agreements, undertakings, representations,
warranties and arrangements of any kind, whether or not
in writing, regarding the same, all of which are hereby terminated and shall cease to have
effect in all respects, and the parties confirm that there are no collateral or supplemental
agreements relating to the Transaction Documents, except as expressly set forth herein or
therein.
	 
	9.3	 	Assignment.
	 
	(a)	 	This Agreement shall be binding on and enure for the benefit of each party’s successors and
permitted assigns. Save as provided in Clause 9.3(b), no party shall, without the prior
written consent of the other party, assign, transfer, charge or deal in any other manner with
this Agreement or any of its rights (whether to damages or otherwise) or obligations arising
under or in connection with the Agreement, or purport to do any of the same, nor sub-contract
any or all of its obligations under this Agreement, and any such assignment, transfer, charge
or dealing shall be void for all purposes.
	 
	(b)	 	The Purchaser may assign all or any part of its rights and benefits under this Agreement to
any Purchaser Group Companies.
	 
	(c)	 	Subject to and upon any succession or assignment permitted by this Agreement, any such
successor or assignee shall in its own right be able to enforce any term of this Agreement in
accordance with the terms of this Agreement as if it were a party, but until such time shall
have no rights whether as a third party or otherwise. The Vendor shall have no greater
liabilities towards any successor or assignee of the Purchaser than it would have had to the
Purchaser had the Purchaser remained fully and solely entitled under this Agreement.

13

 

	9.4	 	Right of set-off, deductions and withholdings and Tax on payments.
	 
	(a)	 	The Purchaser shall not be entitled to set off against the Consideration any sums owing to it
by the Vendor.
	 
	(b)	 	If any deduction or withholding is required by law to be made from any payment from one party
to another party under any Transaction Document, the party making the payment shall increase
the amount thereof so as to ensure that the recipient receives and is able to retain that
amount that it would have received and retained had the payment not been the subject matter of
such deduction or withholding provided always that if the recipient is entitled to a credit or
some other benefit as a consequence of the payment to it being the subject matter of a
deduction or withholding it shall use its reasonable endeavours to utilise the credit (whether
by set off, or by claiming a repayment in respect thereof, or otherwise) or benefit so arising
and in the event that it is able so to do it shall repay to the party who made the payment an
amount equal to the credit or benefit so utilised, provided always that this clause is without
prejudice to the limitations on the Vendor’s liabilities as set out in Clause 6. For the
avoidance of doubt, this clause shall not impose upon the recipient of the payment any
obligation to utilise any credit or benefit in priority to any other economic credit or
benefit available to it or to pay to the party making the payment an amount greater than that
by which the original payment was increased under this Clause 9.3.
	 
	(c)	 	If any payment from the Vendor to the Purchaser under any Transaction Document is liable to
Tax in the hands of the Purchaser, the Vendor shall increase the payment by
such an amount as will ensure that the Purchaser is
able to receive and retain, after paying Tax in
respect of its receipt, an amount equal to that which
would otherwise have been paid to it had the receipt
not been subject to Tax in its hands, provided always
that this clause is without prejudice to the
limitations on the Vendor’s liabilities as set out in
Clause 6. The parties shall agree to the amount of
any increase in a relevant payment to give effect to
this Clause 9.3. In the event that the parties are
not able to agree the amount of any increase, the
amount thereof shall be certified by the Purchaser’s
auditors acting as experts whose decision in respect
thereof shall be binding on the relevant parties
except in the case of manifest error.
	 
	9.5	 	Waivers, rights and remedies.
	 
	(a)	 	No failure or delay on the part of either party to this Agreement in exercising any right or
remedy provided by law or under this Agreement shall impair such right or remedy or operate as
a waiver or variation of it or preclude its exercise at any subsequent time and no single or
partial exercise of any such right or remedy shall preclude or restrict any other or further
exercise of it or the exercise of any other right or remedy.
	 
	(b)	 	A waiver by either party to this Agreement of a breach of or default under any Transaction
Document shall not constitute a waiver of any other breach or default, shall not affect the
other terms of any Transaction Document or the rights of any other person thereto and shall
not prevent the Purchaser from subsequently requiring compliance with the waived obligation.
	 
	(c)	 	Any waiver (in whole or in part) of any right or remedy under this Agreement must be set out
in writing, signed by or on behalf of the person granting the waiver and may be given

14

 

	 	 	subject
to any conditions thought fit by the grantor and, unless otherwise expressly stated, any
waiver shall be effective only in the instance and only for the purpose for, and in favour of
the person to, which it is given.
	 
	(d)	 	Unless specifically provided otherwise, the rights and remedies of the Purchaser and the
Vendor under or pursuant to any Transaction Document are cumulative, may be exercised as often
as the Purchaser or the Vendor, as applicable considers appropriate and are in addition to its
rights and remedies under the general law.
	 
	9.6	 	Variations. No variation of any Transaction Document shall be valid unless it is agreed in
writing and signed by or on behalf of each of the parties thereto.
	 
	9.7	 	Effect of Closing. This Agreement (other than obligations that have already been fully
performed) remains in full force after Closing.
	 
	9.8	 	Provisions of Agreement severable. If any provisions of this Agreement or any other
Transaction Document is, or becomes, invalid, unenforceable or illegal, in whole or in part,
under the laws of any jurisdiction, such term or provision or part shall to that extent be
deemed not to form part of this Agreement or the relevant Transaction Document (as the case
may be), but the validity, enforceability or legality of the remaining provisions of this
Agreement or the relevant Transaction Document shall not be impaired.
	 
	9.9	 	Interest for late payment. Any sum owing by either party under this Agreement shall carry
interest from (and excluding) the date on which it is payable until (and including) the date
of actual payment at the Specified Rate; such interest will be compounded semi-annually and be
payable after as well as before any judgment.
	 
	9.10	 	Counterparts. This Agreement and each of the other Transaction Documents may be entered into
in any number of counterparts and by the parties thereto on separate counterparts, each of
which when so executed and delivered shall be an original but each such Transaction Document
shall not be effective until each party thereto has executed at least one counterpart, but all
the counterparts for each Transaction Document shall together constitute one and the same
instrument.
	 
	9.11	 	Third party rights. Except pursuant to Clause 9.12, this Agreement and the other Transaction
Documents are made for the benefit of the respective parties hereto and thereto and their
successors and permitted assigns only and are not intended to benefit, and no term thereof
shall be enforceable by, any other person by virtue of the Contracts (Rights of Third Parties)
Act 1999.
	 
	9.12	 	Exception. Teekay Norway AS shall be entitled to the benefit of
any of the provisions of this Agreement expressed to
be in its favour as if it were a party to this
Agreement.
	 
	10	 	NOTICES
	 
	10.1	 	General. Any notice under or in connection with this Agreement shall be in writing and may
be delivered by hand or fax to the address of the relevant party that is set out below or to
such other address as that party may have notified in writing from time to time to the party
serving the notice, which notice so served by fax shall be deemed to have been received at the
time of despatch:

15

 

	(a)	 	the Vendor

	 	 	 	 	 
	 

	 	Name:
	 	Teekay Corporation
	 

	 	Address:
	 	Bayside House, Bayside Executive Park,
	 

	 	 	 	West Bay Street & Blake Road,
	 

	 	 	 	P.O. Box AP-59212,
	 

	 	 	 	Nassau, The Bahamas
	 

	 	Fax Number:
	 	+1 242 502 8840
	 
	 	 	marked for the attention of the Corporate Secretary

	(b)	 	the Purchaser

	 	 	 	 	 
	 

	 	Name:
	 	Teekay Offshore Partners L.P.
	 

	 	Address:
	 	Bayside House, Bayside Executive Park,
	 

	 	 	 	West Bay Street & Blake Road,
	 

	 	 	 	P.O. Box AP-59212,
	 

	 	 	 	Nassau, The Bahamas
	 

	 	Fax Number:
	 	+1 242 502 8840

	11	 	GOVERNING LAW AND JURISDICTION
	 
	11.1	 	English law. This Agreement is governed by, and shall be construed in accordance with,
English law.
	 
	11.2	 	Arbitration.
	 
	(a)	 	Any dispute arising out of this Agreement shall be referred to arbitration in London in
accordance with the Arbitration Act 1996 and any statutory re-enactment or modification
thereof before a sole arbitrator agreed by the parties or failing agreement within 7 days of
receipt by one party of a notice (the “First Notice”) from the other proposing an arbitrator,
a tribunal of three arbitrators comprising:

	 	(i)	 	the arbitrator proposed in the First Notice;
	 
	 	(ii)	 	an arbitrator appointed by the party that received the First Notice; and
	 
	 	(iii)	 	an arbitrator, who shall be the chairman, appointed by the two arbitrators
referred to in (i) and (ii) above.

	 	 	If the party receiving the First Notice does not within 14 days of receipt thereof notify
the other party of its appointed arbitrator, the arbitrator referred to in (i) above shall
be deemed appointed as sole arbitrator.

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	(b)	 	Once appointed in relation to a dispute, a sole arbitrator or tribunal shall resolve all
other disputes between the parties in relation to this Agreement, subject to the availability
of the arbitrator(s).
	 
	12	 	TERMINATION
	 
	12.1	 	Termination. This Agreement may be terminated upon written notice given at any time before
the Closing:
	 
	(a)	 	by the mutual written consent of Vendor and Purchaser;
	 
	(b)	 	by the Vendor of the Purchaser, if the Closing shall not have occurred prior to July
31st 2007 (the “Expiration Date”); provided, however, that the right to terminate
this Agreement under this Clause 12.1(b) shall not be available to any party whose failure to
fulfill any obligation under this Agreement shall have been the cause of, or shall have
resulted in, the failure of the Closing to occur prior to such date;
	 
	(c)	 	by the Vendor, in the event of a material breach by the Purchaser of any representation,
Warranty, covenant or agreement of the Purchaser contained herein that has not been cured or
is not curable by the Expiration Date; or
	 
	(d)	 	by the Purchaser, in the event of a material breach by the Vendor of any representation,
Warranty, covenant or agreement of the Vendor contained herein that has not been cured or is
not curable by the Expiration Date.
	 
	12.2	 	Effect of Termination. In the event of the termination of this Agreement pursuant to
Clause 12.1 above, the parties shall be relieved of their obligations under this Agreement,
save that Clauses 1 and 10 to 11 shall continue in full force and effect, and neither party
shall have any claims against the other party in connection with this Agreement except in
respect of any accrued rights or obligations arising under this Agreement before termination
or in connection with any antecedent breach by any party of any provision of this Agreement or
any breach by any party of any continuing provision of this Agreement.

[Remainder of This Page Intentionally Left Blank]

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SCHEDULE A

WARRANTIES AND REPRESENTATIONS

	1	 	THE COMPANIES AND THE INTERESTS
	 
	1.1	 	Information.
	 
	 	 	Navion Bergen L.L.C. is duly formed and validly existing under the laws of The Republic
of the Marshall Islands. Navion Bergen LLC has the requisite power and authority to own and
operate its properties and assets and to carry on its business.
	 
	 	 	Navion Bergen AS is duly incorporated and registered under the laws of Norway. Navion
Bergen AS has the requisite power and authority to own and operate its properties and assets
and to carry on its business.
	 
	1.2	 	Title to Interests. The Interests constitute one hundred per cent of the issued capital of
each of the Companies, the Vendor in the case of Navion Bergen L.L.C. and its wholly owned
subsidiary Teekay Shipping Norway AS in the case of Navion Bergen AS is the sole legal and
beneficial owner of the Interests, and no claim has been made by any person to be entitled to
any of them. The Interests have been duly authorized, properly allotted and validly issued
and are fully paid, or credited as fully paid, and non-assessable. There is no Security
Interest, option, conversion right, right to acquire, or other adverse interest, right,
equity, claim or potential claim of any description on or over or affecting any of the
Interests nor are there any agreements, arrangements or commitments to give or create any such
Security Interest, right or claim, and no claim has been made by any person to be entitled to
any.
	 
	1.3	 	No arrangements relating to share capital. Neither of the Companies have created or issued
any shares or equity interests (other than the Interests). There is no agreement, arrangement,
obligation or commitment (including an option or right of pre-emption or conversion) requiring
or granting any person the right to require the creation, allotment, issue, transfer,
redemption or repayment of, or creating or requiring the creation of any Security Interest
over, or requiring the grant to a person of the right (conditional or not) to require the
allotment, issue, transfer, redemption or repayment of, any shares, equity or loan capital in
either of the Companies (or any unissued shares, equity capital, loan capital or other
securities of the Companies) now or at any time in the future, and neither of the Companies
have agreed to do or enter into any of the foregoing and no person has made any claim to be
entitled to any of the foregoing.
	 
	1.4	 	No capital reorganisation. Neither of the Companies since their incorporation or formation
have:
	 
	(a)	 	made any issue of securities by way of capitalisation of profits or reserves (including share
premium account and capital redemption reserve); or
	 
	(b)	 	repaid, purchased or redeemed any shares of any class of its share capital or otherwise
reduced its share capital or any class of it;

18

 

	 	 	and have not agreed to do any of the foregoing (whether at the option of any other person or
otherwise).
	 
	1.5	 	No agreement/arrangement. Neither the Vendor nor the Companies are party to any agreement or
arrangement concerning:
	 
	(a)	 	the transfer or disposal of the Interests or any interest therein or any restriction thereon
or obligation relating thereto;
	 
	(b)	 	the exercise of votes at meetings of the board of either of the Companies (if any) or of the
holders of any class of Interests; or
	 
	(c)	 	the right to appoint or remove any directors or officers of either of the Companies (where
applicable).
	 
	1.6	 	No Security Interest over assets. There is no Security Interest (other than liens arising in
the usual course of business consistent with past practices) affecting the whole or any
material part of the assets of the Companies.
	 
	2	 	THE VENDOR
	 
	2.1	 	Capacity of Vendor and Teekay Shipping Norway AS. As regards the Vendor and Teekay Shipping
Norway AS:
	 
	(a)	 	it has the requisite power and authority to enter into the Transaction Documents to which it
is a party and perform all its obligations thereunder;
	 
	(b)	 	the Transaction Documents to which it is a party constitute (or will constitute when
executed) its legal, valid and binding obligations enforceable against it in accordance with
their terms;
	 
	(c)	 	it has the power and authority to absolutely and unconditionally sell and transfer the full
legal and beneficial ownership in the Interests registered in its name to the Purchaser on the
terms set out in this Agreement;
	 
	(d)	 	the execution and delivery of the Transaction Documents and performance by it of the
obligations thereunder do not and will not result in a breach of, or constitute any default
under, any law or regulation, any order, judgement or decree by any court or governmental
agency to which it is a party or by which it is bound, its Articles of Incorporation and
Bylaws or any agreement to which it is a party;
	 
	(e)	 	all consents, licences, approvals and authorisations required by it in connection with the
Transaction Documents to which it is a party and the transactions contemplated thereby have
been obtained and are in full force and effect;
	 
	(f)	 	no action, suit, proceeding, litigation or dispute against it or any Vendor Group Company is
presently taking place or pending or, to its knowledge, threatened that would or might
reasonably be expected to inhibit its ability to perform its obligations under the Transaction
Documents to which it is a party or that could materially and adversely affect the Interests;
and

19

 

	(g)	 	in so far as it is a body corporate:

	 	(i)	 	it is a body corporate duly incorporated and validly existing under the laws
of the jurisdiction in which it is incorporated;
	 
	 	(ii)	 	no Insolvency Event has occurred in relation to it and no events or
circumstances have arisen that entitle or could entitle any person to take any action,
appoint any person, commence proceedings or obtain any order instigating an Insolvency
Event.

	2.2	 	Vendor/Company relationship. Neither the Vendor, Teekay Shipping Norway AS nor any Vendor
Group Companies:
	 
	(a)	 	owe any indebtedness or other liability which has not been Disclosed and which in aggregate
exceeds $100,000 to either of the Companies whether actually or contingently, whether solely
or jointly with any other person and whether as principal or surety, and there is no such
indebtedness or liability which has not been Disclosed and which in aggregate exceeds $100,000
due or owing by either of the Companies to the Vendor, Teekay Shipping Norway AS or any Vendor
Group Companies and there is no guarantee or Security Interest in respect of any such
indebtedness or liability outstanding;
	 
	(b)	 	are party to any agreement, arrangement or understanding, other than the Transaction
Documents, with the Companies or relating to the Companies or the Interests in which the
Vendor, Teekay Shipping Norway AS or any Vendor Group Company is or has been interested,
whether directly or indirectly, and there is no agreement, arrangement or understanding to
which either of the Companies is a party and in which the Vendor, Teekay Shipping Norway AS or
any Vendor Group Company has or has had an interest, whether directly or indirectly; or
	 
	(c)	 	is entitled to a claim of any nature against the Companies, which has not been Disclosed or
which individually does not exceed $100,000, or has assigned to any person the benefit of a
claim against either of the Companies to which it would otherwise be entitled.
	 
	3	 	AGREEMENTS
	 
	3.1	 	Disclosure of Contracts. Complete and accurate copies of all Contracts (including all
amendments and supplemental agreements relating thereto) have been provided to the Purchaser
and all Contracts are set out in the Disclosure Schedule.
	 
	3.2	 	Enforceability of and compliance with agreements. In relation to each Contract:
	 
	(a)	 	the Vendor has no reason to believe that the Companies will be unable to complete and fulfil
each of the Contracts by the due date and within the estimated level of costs or that any
products sold or to be sold by the Companies are or will be unable to meet the specifications
contracted for;
	 
	(b)	 	the Companies are in the possession or in the control of each such Contract;

20

 

	(c)	 	so far as the Vendor is aware, there are no written or oral agreements that derogate from the
obligations of any person other than the Companies or increase the obligations of the
Companies under the Contracts;
	 
	(d)	 	each such Contract has been validly executed by the respective Companies, is valid and
subsisting, has not been terminated and is fully enforceable against the such of the Companies
and, to the Vendor’s knowledge, the other parties to such agreement in accordance with its
terms;
	 
	(e)	 	none of such Contracts is subject to a Security Interest granted or created by the Companies
or the Vendor Group Companies other than under the terms of the relevant Contract;
	 
	(f)	 	to the Vendor’s knowledge, there is no and has not been, at any time, any breach of, or any
default in the performance of, the terms of any such Contracts by any person other than the
Companies nor are there any circumstances likely to give rise to such breach or default. The
Companies have not granted any time or indulgence, or waived any right, in relation to any
such Contract and, in particular, but without prejudice to the generality of the foregoing,
all amounts due and payable under such agreements have been duly paid in full on, or within a
reasonable period of, the due date for payment of the same;
	 
	(g)	 	so far as the Vendor is aware, the Companies have fulfilled all of their obligations and
performed and observed all warranties, undertakings, covenants and agreements on their part to
be fulfilled, performed and observed under each of such Contracts;
	 
	(h)	 	no notice of any intention to terminate, repudiate, rescind, modify or disclaim any provision
of any Contract has been given by the Companies or, so far as the Vendor is aware, received
from a person other than the Companies by the Companies in respect of any such Contract;
	 
	(i)	 	so far as the Vendor is aware, the Companies have paid all Taxes, duties, imposts and other
charges payable in respect of the Contracts so far as such Taxes, duties, imposts and other
charges fall upon the Companies and have become due and payable;
	 
	(j)	 	all necessary licences, approvals and consents required by the Companies prior to the entry
into of each of such Contracts and for their continuation were duly obtained and are
subsisting and, to the Vendor’s knowledge, no circumstances have arisen that may lead to
withdrawal or failure to renew, if applicable, of any such licence, approval or consent;
	 
	(k)	 	there are no disputes or outstanding claims pending or, to the Vendor’s knowledge, threatened
against either of the Companies under such Contracts and, to the Vendor’s knowledge, no person
is entitled to make, or has threatened to make, a claim against the Companies in respect of
any representation, breach of condition or warranty or other express or implied term relating
to any such Contracts and no matter exists that would or might enable a person other than the
respective Companies to make such a claim or raise a set-off, deduction, withholding or
counterclaim in any action for breach of the relevant Contract or otherwise give any person
other than the Company the right to withhold or delay payment of any sum due from it under the terms of the relevant Contract or
the performance of any of its obligations thereunder;

21

 

	(l)	 	so far as the Vendor is aware, no person (other than the parties to such Contracts) has any
rights (including any Security Interests) in respect of any such Contracts or the assets the
subject thereof;
	 
	(m)	 	the execution of this Agreement by the Vendor and the exercise of its rights and performance
of its obligations under the Agreement does not constitue and will not result in any breach of
any agreement or treaty to which the Vendor, Teekay Shipping Norway AS or the Companies are a
party;
	 
	(n)	 	the obligations expressed to be assumed by the Vendor or which the Vendor is to procure by
Teekay Shipping Norway AS in this Agreement are legal and valid obligations, binding on them
in accordance with the terms of this Agreement and no limit on any of their powers will be
exceeded as a result of the transaction contemplated by this Agreement or the performance by
the Vendor of its obligations herein or by Teekay Shipping Norway AS of such obligations on
behalf of the Vendor;and
	 
	(o)	 	so far as the Vendor is aware, no Insolvency Event has occurred in relation to any third
party to such Contracts.
	 
	3.3	 	No powers of attorney. There are in force no powers of attorney given by the Companies nor
any other authority (express, implied or ostensible) given by the Companies to or in favour of
any person (as agent or otherwise) to enter into any agreement, contract or commitment or to
do anything on their behalf except as set out in the Disclosure Schedule. The Disclosure
Schedule sets out details of all persons who have authority to bind the Companies in the
ordinary course of their business.
	 
	3.4	 	Change of control. Neither the sale of the Interests hereunder nor any change in the
management of the Companies as a result of this Agreement will:
	 
	(a)	 	entitle any person to modify or terminate any Contract or other arrangement with the
Companies;
	 
	(b)	 	result in the breach by the Companies under any of the terms, conditions or provisions of any
Contract or other instrument to which either of the Companies are now a party;
	 
	(c)	 	result in any present or future Indebtedness becoming due and payable or capable of being
declared due and payable prior to its stated maturity; or
	 
	(d)	 	entitle any person to receive from either of the Companies any finder’s fee, brokerage or
other commission in connection with the sale of the Interests.
	 
	3.5	 	Offers and tenders. No offer or tender or similar arrangement given or made by the Companies
are capable of giving rise to an agreement solely by the unilateral act of any person other
than the Companies.
	 
	3.6	 	Joint Ventures etc. The Companies do not, and have not agreed to, act or carry on business
in partnership with any other person and are not and have not agreed to act or
become a member of any joint venture, consortium, corporate or unincorporated body,
association or undertaking.

22

 

	3.7	 	Competition/Anti-trust. The Companies are not party to any practice, arrangement or
agreement that infringes or is likely to require registration or notification under any
relevant anti-trust or competition law.
	 
	3.8	 	Restrictive practices. The Companies are not and have not been a party to any agreement,
arrangement, understanding or practice restricting the freedom of the respective Companies to
carry on the whole or any part of their business in any place in such manner as they think fit
or to provide or take goods and/or services by such means and from and to such persons and
into or from such places as they may from time to time think fit and/or to compete in any area
or in any field or with any person.
	 
	3.9	 	Directors or Officers.
	 
	 	 	The management of Navion Bergen LLC is vested exclusively in its members. The Vendor
is, and the Purchaser shall be upon the Closing, the sole member of Navion Bergen LLC with,
in its capacity as sole member, authority to make all decisions and take all actions for
Navion Bergen LLC as, in its sole discretion, it shall deem necessary and appropriate to
enable Navion Bergen LLC to carry out any lawful activity, including but not limited to
carrying on the acquisition, ownership, operation and disposition of oceangoing vessels.
Notwithstanding its authority to do so as sole member of Navion Bergen LLC, the Vendor has
not appointed or elected any individuals to officer positions of Navion Bergen LLC.
	 
	 	 	The management of Navion Bergen AS is vested in its Board of Directors: Kenneth Hvid –
Chairman; Arve Torkjel Ustgard – Managing Director; and, Stein Rynning. Teekay Shipping
Norway AS is, and Teekay Norway AS shall be upon the Closing, the sole shareholder of Navion
Bergen AS with, in its capacity as shareholder, authority to appoint Directors to the Board
of Navion Bergen AS to make all decisions and take all actions for Navion Bergen AS as, in
its sole discretion, it shall deem necessary and appropriate to enable Navion Bergen AS to
carry out any lawful activity.
	 
	4	 	FINANCIAL ARRANGEMENTS
	 
	4.1	 	Indebtedness. The Companies do not have outstanding nor have they incurred or agreed to
incur any Indebtedness (including, without limitation, any indebtedness for moneys borrowed or
raised under any acceptance credit, bond, rate, bill of exchange or commercial paper, finance
lease, hire purchase agreement, trade bills, forward sale or purchase agreement or conditional
sale agreement or other transaction having the commercial effect of a borrowing).
	 
	4.2	 	Borrowings. The purchase of the Vessel by the LLC and the cost of conversion are financed by
means of a US$70,000,000 secured revolving credit facility from DnB Nor Bank ASA as facility
agent. At the Closing Date the amount of US$51,200,000 has been drawn on the loan with
US$18,800,000 remaining available to be drawn.
	 
	 	 	The Companies have not borrowed any monies from the Vendor, any Vendor Group Companies or
any third party.

23

 

	4.3	 	Loans by the Companies. The Companies have not made any loans to the Vendor, any Vendor
Group Companies or any third party.
	 
	4.4	 	Debts. The Companies have not factored any of its debts. There are no debts owing to the
Companies.
	 
	4.5	 	No guarantee or Security Interests. No guarantee or Security Interest has been given or
entered into by the Companies or any third party in respect of Indebtedness or other
obligations of the Companies and no guarantee or Security Interest has been given or entered
into by the Companies in respect of any other person.
	 
	4.6	 	No indemnities given by the Companies. The Companies are not responsible (including on a
contingent basis) for the indebtedness, or for the default in the performance of any
obligation, of any person nor are they party to any option or pre-emption right or any
guarantee, suretyship or any other obligation (whatever called) to pay, purchase or provide
funds (whether by advance of money, the purchase of or subscription for shares or other
securities or the purchase of assets or services or otherwise) for the payment of, or as an
indemnity against the consequence of default in the payment of, any indebtedness of any
person.
	 
	4.7	 	Bank accounts. Details of all bank accounts of the Companies, and particulars of the
balances of all the Companies’ bank accounts as at a date not more than 2 (two) Business Days
before the date of this Agreement, have been disclosed to the Purchaser, and the Companies
have no other bank accounts. Since the date of such particulars, there have been no material
payments out of any such bank accounts, except for routine payments in the ordinary course of
business consistent with past practices.
	 
	5	 	ASSETS, LIABILITIES AND OTHER ARRANGEMENTS
	 
	5.1	 	No other assets and liabilities. The LLC has no assets other than the Vessel and the
Companies have no liabilities other than those arising in connection with the Contracts and as
set forth in the Disclosure Schedule and, save for their obligations under the Contracts,
there are no agreements or arrangements to which the Companies are a party that increase the
obligations of the Companies under the Contracts or that create or include any other
obligation that might be binding on the Companies.
	 
	5.2	 	Business activity. The only business activities of the Companies collectively since
incorporation or formation have been the acquisition, ownership, and operation of the Vessel.
	 
	6	 	PROPERTIES
	 
	6.1	 	Properties. The Companies do not own, occupy or use any real property.
	 
	7	 	INSURANCE
	 
	7.1	 	Insurance policies. The Companies maintain the policies of insurance listed in the
Disclosure Schedule and attached to the Disclosure Schedule, each of which is in full

24

 

	 	 	force and effect and, to the Vendor’s knowledge, not subject to being avoided for any reason.
	 
	8	 	LITIGATION AND OTHER DISPUTES
	 
	8.1	 	No proceedings. Neither of the Companies are, and, to the Vendor’s knowledge, no director or
officer of the Companies (in relation to the Companies’ affairs or, if resolved in a manner
adverse to such director or officer, could result in a materially adverse effect on the
Companies’ business) is, engaged in or a party to any dispute, litigation, arbitration,
prosecution or other legal proceedings or in any proceedings or hearings before any statutory
or governmental body, department, board or agency, nor are any of the foregoing pending or, to
the Vendor’s knowledge, threatened or expected either against or by the Companies, and, to the
Vendor’s knowledge, there is no fact or circumstance or any other form of written demand in
existence that might give rise to the same, or form the basis of any criminal prosecution
against either of the Companies.
	 
	8.2	 	No orders or judgements. There is no order, decree or judgement of any court, tribunal or
any governmental agency of any country outstanding against the Companies or, to the Vendor’s
knowledge, any person for whose acts either of the Companies may be vicariously liable, and,
to the Vendor’s knowledge, there are no circumstances likely to give rise to vicarious
liability of the Companies, and no injunction has been granted against the Companies.
	 
	8.3	 	No unlawful acts. Neither of the Companies has committed, or been prosecuted for, any breach
of a statutory or regulatory duty or any tortious or other criminal or unlawful or
unauthorised act that could reasonably be expected to lead, or has led, to a claim for damages
or an injunction or other order of a court or tribunal of competent jurisdiction being made
against it, and there are no circumstances likely to give rise to such a breach or act.
	 
	9	 	COMPLIANCE WITH LEGAL REQUIREMENTS
	 
	9.1	 	Compliance by Companies. The Companies have, so far as the Vendor is aware, complied and are
continuing to comply in all material respects with all relevant legislation and regulations
and guidelines in any part of the world applicable to them and/or their business and/or their
assets.
	 
	9.2	 	Ultra vires. The Companies are empowered and duly qualified to carry on business in all
jurisdictions in which their present businesses are now carried on and have not entered into
any ultra vires transaction.
	 
	9.3	 	Returns. All returns, particulars, resolutions and other documents required to be filed with
or delivered to the Registrar of Corporations in the Republic of the Marshall Islands by
Navion Bergen LLC and the Registrar of Corporations in Norway by Navion Bergen AS have been
properly prepared and so filed or delivered.
	 
	9.4	 	Limited Liability Company Agreement. The Limited Liability Company Agreement of, and all
resolutions passed by, Navion Bergen LLC and all other legal requirements concerning Navion
Bergen LLC have been complied with. A copy of Navion Bergen LLC’s Limited Liability Company
Agreement has been provided to the Purchaser, which is

25

 

	 	 	complete and accurate in all material respects, has attached thereto or incorporated therein copies of all resolutions and other
documents required by law to be so attached or incorporated, and fully sets out the rights and
restrictions attaching to the Interests.
	 
	9.5	 	Constitutional documents. The articles of, and all resolutions passed by, Navion Bergen AS
and all other legal requirements concerning Navion Bergen AS have been complied with. A copy
of Navion Bergen AS’ constitutional documents has been provided to the Purchaser, which is
complete and accurate in all material respects, and fully sets out the rights and restrictions
attaching to the Interests.
	 
	9.6	 	Books and records. The statutory books (including all registers and minute books whether
electronic or otherwise), books of account and other statutory records of the Companies have
been properly and accurately written up or maintained in accordance with all applicable laws
and are up to date (but not including the date of the Agreement) and comprise complete and
accurate records of all information required to record therein other than to the extent that
they are not material to the business of the respective Companies. The Companies have not
received any notice or allegation that any of the statutory books, books of accounts or other
records of whatsoever kind of such of the Companies are inaccurate or incomplete or should be
rectified.
	 
	9.7	 	Companies’ name. The Companies do not use or otherwise carry on business under any name
other than their full corporate name. The Companies have the full right to use their
corporate name without restriction, and the Companies and the Vendor are not aware of any
actual or threatened challenge to the use of those names or any of them in respect of the
business of the Companies or any claim that any such use infringes any rights of any third
party.
	 
	9.8	 	Consents and licences. The Companies hold any and all licences (including statutory
licences), permissions, authorisations, consents, registrations and exemptions required by
them for the operation of their business as now carried on, and, to the Vendor’s knowledge,
none of these is subject to revocation or cancellation for any reason.
	 
	9.9	 	No penalties or fines. Neither of the Companies nor any of their officers (or agents during
the course of their duties) have committed or omitted to do any act or thing that has given or
could give rise to a material claim, fine, penalty or other liability, at law or in equity, in
respect of the physical or environmental condition of any of their fixed or moveable assets,
real property or products.
	 
	9.10	 	No investigations and inquiries. No investigations, inquiries or reviews by or on behalf of
any governmental or other body in respect of the Companies or their business or assets are
pending or, to the Vendor’s knowledge, in existence or have been conducted or threatened, and
there are no circumstances that might give rise to such investigation, inquiry or review.
	 
	10	 	EMPLOYMENT
	 
	10.1	 	Employees. The Companies do not, and have never had any employees and there are no
arrangements (written or otherwise) under which remuneration or benefit or other sum
whatsoever is paid or given to any person (including any officer or consultant of the
Companies).

26

 

	11	 	TAXATION
	 
	11.1	 	Tax Residence.
	 
	(a)	 	Navion Bergen LLC is and always has been resident in The Bahamas for the purposes of Taxation
and has never been resident in any other country for the purposes of Taxation or treated as so
resident for the purposes of any double taxation agreement.
	 
	(b)	 	Navion Bergen LLC has never traded through a branch, agency or permanent establishment
situated outside The Bahamas.
	 
	(c)	 	No circumstances exist whereby a person not resident in The Bahamas is assessable and
chargeable to tax in the name of Navion Bergen LLC.
	 
	(d)	 	Navion Bergen LLC is not liable to pay nor has it at any time incurred any liability to Tax
chargeable under the laws of any jurisdiction other than The Bahamas.
	 
	(e)	 	Navion Bergen AS is and always has been resident in Norway for the purposes of Taxation and
has never been resident in any other country for the purposes of Taxation or treated as so
resident for the purposes of any double taxation agreement.
	 
	(f)	 	Navion Bergen AS has never traded through a branch, agency or permanent establishment
situated outside Norway.
	 
	(g)	 	No circumstances exist whereby a person not resident in Norway is assessable and chargeable
to tax in the name of Navion Bergen AS.
	 
	(h)	 	Navion Bergen AS is not liable to pay nor has it at any time incurred any liability to Tax
chargeable under the laws of any jurisdiction other than Norway.
	 
	11.2	 	Disclosures, Notices, Returns, Clearances and Records.
	 
	(a)	 	All notices, reports, disclosures, accounts, computations, statements, assessments,
registrations, de-registrations and any other information that ought to have been made or
supplied by or in respect of the Companies for any Taxation purposes have been made or
supplied on a proper basis, were punctually submitted, were accurate and complete when
submitted and remain accurate and complete and are not the subject of any dispute, enquiry or
investigation with any Taxation Authority, and, to the Vendor’s knowledge, there are no
present circumstances that are likely to give rise to any such dispute, enquiry or
investigation.
	 
	(b)	 	No action has been taken by the Companies in respect of which any consent or clearance from
any Taxation Authority was required except in circumstances where such consent or clearance
was validly obtained, and no conditions were attaching thereto.
	 
	(c)	 	The Companies have made and submitted each claim, disclaimer, election, notice and consent to
have been made and submitted, and details of all such claims, disclaimers, elections, notices
and consents are set forth in the Disclosure Schedule.

27

 

	(d)	 	The Companies have never been subject to any enquiry, visit, audit, investigation or
discovery order by any Taxation Authority nor, to the Vendor’s knowledge, are there any
circumstances existing that make it likely that any such enquiry, visit, audit, investigation
or discovery order will be made in the next 12 months.
	 
	(e)	 	The Disclosure Schedule sets out details of all notices given by any Taxation Authority to or
in relation to the Companies, the provisions of which remain in force.
	 
	(f)	 	The Companies have sufficient records relating to past events to permit accurate calculation
of the Taxation liability or relief that would arise upon a disposal or realisation on
completion of each asset owned by the Companies before Closing.
	 
	(g)	 	Except as set out in the Disclosure Schedule, the Companies’ Taxation affairs are not
dependent on or subject to any concession, agreement or other formal or informal arrangement
with any Taxation Authority.
	 
	11.3	 	All Tax Paid.
	 
	(a)	 	All Taxation for which the Companies are liable and that ought to have been paid has been
paid on a timely basis to the appropriate Taxation Authority.
	 
	(b)	 	The Companies have not paid, within the three years ending on the date of this Agreement, nor
will become liable to pay, any interest, penalty, fine or surcharge to any Taxation Authority.
	 
	(c)	 	The Companies have not received from any Taxation Authority (and have not subsequently repaid
to or settled with that Taxation Authority) any payment to which they were not entitled or any
notice in which their liability to Taxation was understated.
	 
	11.4	 	Stamp Duty.
	 
	(a)	 	All documents that are in the possession of the Companies or under their control or to which
the Companies are a party and that attract stamp duty have been properly stamped, and the
Companies have duly paid all stamp duty to which they are, have been or may be made liable,
and there is no liability for any penalty in respect of such duty nor, to the Vendor’s
knowledge, are there any circumstances or transactions to which the Companies are or have been
a party, which may result in the Companies becoming liable for any such penalty.
	 
	11.5	 	U.S. Tax Classification. Navion Bergen LLC is classified for United States federal income
tax purposes as a disregarded entity pursuant to Treas. Reg. Section 301.7701-
3. Neither the Vendor nor Navion Bergen LLC will take any action to change the U.S. federal
income tax classification of Navion Bergen LLC.
	 
	12	 	MISCELLANEOUS
	 
	12.1	 	No broker’s fees. No one is entitled to receive from either of the Companies any finder’s
fee, brokerage, or other commission in connection with the purchase of the Interests.

28

 

	12.2	 	Effect of entering into this Agreement. Compliance with the terms of this Agreement or
Closing does not and will not:
	 
	(a)	 	conflict with or result in the breach of or constitute a default under any of the terms,
conditions or provisions of:

	 	(i)	 	any agreement or instrument to which the Companies are now a party, including
the Contracts; or
	 
	 	(ii)	 	Navion Bergen LLC’s Limited Liability Agreement or give rise to or cause to
become exercisable any right of pre-emption or right of first refusal;
	 
	 	(iii)	 	the articles and constitutional documents of Navion Bergen AS or give rise
to or cause to become exercisable any right of pre-emption or right of first refusal;
or
	 
	 	(iv)	 	any loan to or mortgage created by either of the Companies or any lien,
lease, order, judgment, award, injunction, decree, ordinance or regulation or any
other restriction of any kind or character to which any property of the Companies are
subject or by which the Companies are bound;

	(b)	 	result in any present or future Indebtedness becoming due or capable of becoming due and
payable prior to its stated maturity;
	 
	(c)	 	relieve any other party to an agreement or arrangement with the Companies, including the
Contracts, of its obligations thereunder (whether contractual or otherwise) or enable it to
vary or terminate its rights or obligations thereunder or determine any right or benefit
enjoyed by the Companies or to exercise any right, whether under an agreement with, or
otherwise in respect of, the Companies;
	 
	(d)	 	result in the creation or imposition of any Security Interest on any assets of the Companies;
	 
	(e)	 	cause the Companies to lose the benefit of any right or privilege either of them presently
enjoys;
	 
	(f)	 	cause any person who normally does business with either of the Companies not to continue to
do so on the same basis as previously; or
	 
	(g)	 	cause any licence or authority necessary or desirable for the continuation of the Companies’
respective business to be determined or not renewed or continued or renewed on less favourable
terms.
	 
	12.3	 	Accurate information provided. All information given by the Vendor or any Vendor Group
Companies or officials or professional advisers of the Companies or the Vendor to any of the
directors, officials or professional advisers of the Purchaser in the course of negotiations
leading to this Agreement, taken as a whole, was, when given, and remains and will at Closing
be true and accurate in all material respects, and there is no matter or fact that has not
been disclosed to the Purchaser that renders any such information untrue or misleading in any
material respect.

29

 

	12.4	 	Disclosure Schedule etc accurate. All information contained in the Disclosure Schedule is
true, complete and accurate in all respects and nothing has been omitted and, there is no
matter or fact, which renders any such information untrue, inaccurate, incomplete or
misleading in any material respect.
	 
	12.5	 	All information disclosed. All information relating to the Companies that the Vendor knows
or should reasonably know and that is material to be known by the Purchaser in the context of
the sale of the Interests has been disclosed to the Purchaser and, to the best of the
knowledge, information and belief of the Vendor, there are no other facts or matters
undisclosed to the Purchaser that could reasonably be expected to have a material adverse
effect on the Companies or the Interests.
	 
	13	 	INSOLVENCY
	 
	13.1	 	No Insolvency event. No Insolvency Event has occurred in relation to the Companies and no
events or circumstances have arisen that entitle or could entitle any person to take any
action, appoint any person, commence proceedings or obtain any order instigating an Insolvency
Event.
	 
	14	 	THE VESSEL
	 
	14.1	 	Vessel Commitments. In relation to the Vessel:

	 	(i)	 	the Vessel is properly registered in the name of Navion Bergen LLC under and
pursuant to the flag and law of the Bahamas and all fees due and payable in connection
with such registration have been paid;
	 
	 	(ii)	 	the Vessel is entered with Det norske Veritas (or another classification
society of like standing) and has the highest classification rating issued by such
society for a vessel of the type, age and class of the Vessel;
	 
	 	(iii)	 	the Vessel is in class without any recommendations or notation as to class or
other requirement of the relevant classification society, and if the Vessel is in a
port, it is in such condition that it can not be detached by any port state authority
or the flag state authority for any deficiency;
	 
	 	(iv)	 	the Vessel is owned free of all maritime liens, encumbrances and mortgages
except those that have been Disclosed in the Disclosure Schedule and accepted by the
Purchaser and the terms of any charters that continue beyond the Closing Date,
mortgages and loan documents do not prohibit the sale of the Companies;
	 
	 	(v)	 	the Vessel has been maintained in a proper and efficient manner in accordance
with internationally accepted standards for good ship maintenance, is in good operating
order, condition and repair and is seaworthy and all repairs made to the Vessel during
the last two years and all known scheduled repairs due to be made and all know
deficiencies have been Disclosed in the Disclosure Schedule;
	 
	 	(vi)	 	the Vessel is not (i) under arrest or otherwise detained, (ii) other than in
the ordinary course of business, in the possession of any person (other than her

30

 

	 	 	 	master and crew) or subject to a possessory lien; or (iii) other than in the ordinary course
of business, subject to any other lien;
	 
	 	(vii)	 	the Vessel complies in all material respects with all laws, the requirements
of any government agency having jurisdiction over the Vessel, the provisions of all
international conventions and the provisions of the rules and regulations issued under
international conventions applicable to that Vessel;
	 
	 	(viii)	 	the Vessel is supplied with valid and up-to-date safety, safety construction, safety
equipment, radio, loadline, health, tonnage, trading and other certificates or
documents as may for the time being be prescribed by the law of the flag of the Vessel
or of any other pertinent jurisdiction, or that would otherwise be deemed necessary by
a shipowner acting in accordance with internationally accepted standards for good ship
management and operations; and
	 
	 	(ix)	 	The Vessel has been delivered by Navion Bergen AS to and accepted on an
unconditional basis by the Charterer for service under and in accordance with the terms
and conditions of the Charter.
	 
	 	(x)	 	no blacklisting or boycotting of any description whatsoever has been applied or
currently exists against or in respect of the Vessel.

31

 

SCHEDULE B

THE VESSEL

	 	 	 
	Vessel	 	“NAVION BERGEN”
	Built

	 	2000 
	 
	 	 
	Yard

	 	Sumitomo
	 
	 	 
	Class

	 	DNV (Det norske Veritas)
	 
	 	 
	Flag

	 	Bahamas
	 
	 	 
	Place of Registration

	 	Nassau
	 
	 	 
	Call sign

	 	C6VQ7
	 
	 	 
	IMO (Registration) No.

	 	9197715 
	 
	 	 
	Grt/Nrt

	 	56207/32059 

32

 

DISCLOSURE SCHEDULE

	1.	 	Bareboat Charter of the Vessel dated 1st December 2006 made between Navion
Bergen LLC and Navion Bergen AS.
	 
	2.	 	Bareboat Charter in respect of the Vessel dated 16th January 2006 made
between Teekay Norway AS and Fronape International Company of P.O. Box 714 Georgetown,
Grand Cayman, Cayman Islands and counter-signed by Petrobras Transporte S.A. – Transpetro
of Av Presidente Vargas, 328-20091-660 Rio de Janiero, RJ, Brazi,l (as novated by agreement
dated December 1, 2006)
	 
	3.	 	Novation agreement dated December 1, 2006 between Teekay Norway AS, Navion Bergen AS,
Fronape International Company and Petrobras Transporte S.A. – Transpetro.
	 
	4.	 	Performance guarantee of Teekay Corporation dated December 1, 2006 in relation to the
Bareboat Charter in respect of the Vessel dated 16th January 2006 made between
Teekay Norway AS and Fronape International Company
	 
	5.	 	The Loan Facility Agreement dated December 28, 2006 among (i) Navion Bergen L.L.C. as
borrower, (ii) the banks and financial institutions listed therein as lenders and (iii) DnB
NOR Bank ASA as agents, mandated lead arranger, bookrunner and security trustee (the
“Agent”) and Fortis Capital Corp, as mandated lead arranger and bookrunner, providing for a
term loan facility of up to US$70,000,000.
	 
	6.	 	Guaranty and Indemnity of Teekay Corporation dated December 28, 2006.
	 
	7.	 	First Priority Bahamas Ship Mortgage dated December 28, 2006.
	 
	8.	 	Deed of Covenants dated December 28, 2006.
	 
	9.	 	General Deed of Assignment dated December 28, 2006.
	 
	10.	 	Actions by Written Consent of Sole Member of Navion Bergen L.L.C. dated August 11,
2006, December 20, 2006.
	 
	11.	 	Power of attorney dated December 20, 2006.
	 
	12.	 	List of insurance policies in effect: Gard Certificate of Entry number 193,182 dated
March 30, 2007 and Sul America Hull & Machinery War Risks Policy No. 292512-5.

33

 

EXECUTION PAGE

IN WITNESS WHEREOF this Purchase Agreement has been executed by or on behalf of the parties the day
and year first above written.

	 	 	 	 	 
	EXECUTED by	 	 
	TEEKAY CORPORATION	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	

	 	 

	 	 
	 
	Name:

	 	 

Arthur Bensler
	 	 
	 
	Title:

	 	Authorized Person	 	 
	 
	 	 	 	 
	EXECUTED by	 	 
	 
	BY: TEEKAY OFFSHORE PARTNERS L.P.,	 	 
	 
	 	 	 	 
	By:
	 	 	 	 
	

	 	 

	 	 
	 
	Name:

	 	 

	 	 
	 
	Title:
	 	 	 	 

Purchase Agreement

34PURCHASE AGREEMENT DATED OCTOBER 1, 2007

Exhibit 10.3

Date: October 2007

TEEKAY CORPORATION

and

TEEKAY AUSTRALIA OFFSHORE HOLDINGS PTY LTD.

 

PURCHASE AGREEMENT

 

relating to

the sale and purchase of

the entire ownership interest in

DAMPIER SPIRIT L.L.C.

 

 

INDEX

	 	 	 	 	 
	Clause	 	Page
	1 DEFINITIONS AND INTERPRETATION
	 	 	1	 
	 
	 	 	 	 
	2 AGREEMENT FOR SALE
	 	 	5	 
	 
	 	 	 	 
	3 CONSIDERATION
	 	 	5	 
	 
	 	 	 	 
	4 COMPLETION
	 	 	6	 
	 
	 	 	 	 
	5 WARRANTIES
	 	 	7	 
	 
	 	 	 	 
	6 REMEDIES OF THE PURCHASER
	 	 	9	 
	 
	 	 	 	 
	7 IMPLEMENTATION
	 	 	11	 
	 
	 	 	 	 
	8 COSTS
	 	 	11	 
	 
	 	 	 	 
	9 OTHER PROVISIONS
	 	 	11	 
	 
	 	 	 	 
	10 NOTICES
	 	 	14	 
	 
	 	 	 	 
	11 GOVERNING LAW AND JURISDICTION
	 	 	15	 
	 
	 	 	 	 
	12 TERMINATION
	 	 	15	 
	 
	 	 	 	 
	SCHEDULE A WARRANTIES
AND REPRESENTATIONS
	 	 	18	 
	 
	 	 	 	 
	SCHEDULE B
	 	 	31	 
	 
	 	 	 	 
	EXECUTION PAGE
	 	 	33	 

 

 

THIS AGREEMENT is made as of the 1st day of October 2007

BETWEEN:

	(1)	 	Teekay Corporation, a Marshall Islands company having a principal office at Bayside House,
Bayside Executive Park, West Bay Street & Blake Road, P.O. Box AP-59212, Nassau, Bahamas (the
“Vendor”); and

	(2)	 	Teekay Australia Offshore Holdings Pty Ltd., an Australian company having a principal office
at Level 6, Bayview Tower, 1753-1765 Botany Road, Banksmeadow NSW 2019, Australia (the
“Purchaser”)

WHEREAS:

	(A)	 	 The Vendor is the legal and beneficial owner of 100% of the Interest (as defined
below).

	(B)	 	 The Vendor has agreed to sell and the Purchaser has agreed to purchase the Interest of
Damiper Spirit LLC, on and subject to the terms and conditions hereinafter appearing.

IT IS AGREED as follows:

	1	 	DEFINITIONS AND INTERPRETATION
	 
	1.1	 	Definitions. In this Agreement, including the Schedules and the recitals, unless the context
requires otherwise:
	 
	 	 	“Business Day” means a day (other than a Saturday or Sunday) on which banks in New York are
open for the transaction of normal banking business (other than solely for trading and
settlement in Dollars) or, for the purposes of Clause 10, a day on which banks are open for
the transaction of normal banking business in the country of receipt of a notice.
	 
	 	 	“Business Information” means all information and records (in whatever form held and whether
commercial, financial, technical or otherwise) relating to the Company or the business or
activities or affairs of the Company, which can be reasonably considered to be confidential
to the Company.
	 
	 	 	“Claim” means a claim for breach of Warranty by the Purchaser against the Vendor.
	 
	 	 	“Closing” means completion of the sale and purchase of the Interest in accordance with
Clause 4.1.
	 
	 	 	“Closing Date” means 1st October 2007, being the day on which Closing
takes place.
	 
	 	 	“Completion Date” means the date of this agreement.
	 
	 	 	"Company” means Dampier Spirit LLC, a limited liability company formed under the laws of the
Republic of the Marshall Islands with a registered office at Trust Company Complex, Ajeltake
Road, Ajeltake Island, Majuro, Marshall Islands MH96960 and a principal office c/o Teekay
Corporation, Bayside House, Bayside Executive Park, West Bay Street & Blake Road, P.O. Box
AP-59212, Nassau, Bahamas.
	 
	 	 	“Consideration” means the consideration payable by the Purchaser for the Interest as stated
in Clause 3.

 

 

	 	 	“Contracts” means those agreements, contracts, understandings and arrangements to which the
Company is a party or to which any of the Interest, the Vessel or any other assets of the
Company are subject or by which they are bound which are material to the Company or its
trading activities, set out in the Disclosure Schedule.
	 
	 	 	“Covered Environmental Losses” means all environmental and toxic tort Losses and Expenses
suffered or incurred by the Purchaser, the Purchaser Group Companies or the Company by
reason of or arising out of:
	 
	 	 	(a) any violation or correction of violation of Environmental Laws; or
	 
	 	 	(b) any event or condition associated with ownership or operation by the Vendor or the
Vendor Group Companies of the Interest (including, without limitation, the presence of
Hazardous Substances on, under, about or migrating to or from the Vessel or the disposal or
release of Hazardous Substances generated by operation of the Vessel), including, without
limitation, (i) the cost and expense of any investigation, assessment, evaluation,
monitoring, containment, cleanup, repair, restoration, remediation or other corrective
action required or necessary under Environmental Laws, (ii) the cost or expense of the
preparation and implementation of any closure, remedial, corrective action or other plans
required or necessary under Environmental Laws and (iii) the cost and expense for any
environmental or toxic tort pre-trial, trial or appellate legal or litigation support work,
	 
	 	 	but only to the extent that such violation complained of under clause (a), or such events or
conditions included in clause (b), occurred before the Closing Date; and, provided that, in
no event shall Losses or Expenses to the extent arising from a change in any Environmental
Law after the Closing Date be deemed “Covered Environmental Losses”.

	 	 	“Disclosed” means fully, fairly and expressly disclosed by the Transaction Documents or the
Disclosure Schedule and, for this purpose “fairly disclosed” means any information disclosed
in such manner and in such detail or with sufficient explanation as to enable a reasonable
purchaser to make an informed assessment or estimation of the matter concerned and its
financial, operational or other consequences to the Company.
	 
	 	 	“Disclosure Schedule” means the Disclosure Schedule provided to the Purchaser by the Vendor
concurrently with the execution and delivery of this Agreement.
	 
	 	 	“Dollars” means United States Dollars.
	 
	 	 	“Environmental Laws” means all federal, state, foreign and local laws, statutes, rules,
regulations, orders, judgments and ordinances relating to protection of health and safety
and the environment, each as amended up to and including the Closing Date.
	 
	 	 	“GST Act” means A New Tax System (Goods and Services Tax) Act 1999 (Cth).
	 
	 	 	“Hazardous Substances” means (a) substances which contain substances defined in or regulated
under applicable Environmental Laws; (b) petroleum and petroleum products, including crude
oil and any fractions thereof; (c) natural gas, synthetic gas and any mixtures thereof; (d)
any substances with respect to which a federal, state, foreign or local agency requires
environmental investigation, monitoring, reporting or remediation;

2

 

		 	(e) any hazardous waste or solid waste, within the meaning of any Environmental Law; (f) any
solid, hazardous, dangerous or toxic chemical, material, waste or substance, within the
meaning of and regulated by any Environmental Law; (g) any radioactive material; and (h) any
asbestos-containing materials that represent a health hazard.
	 
	 	 	“Indebtedness” means any borrowings or other indebtedness whatsoever owed by the
Company.
	 
	 	 	“Insolvency Event” means in relation to any of the Purchaser, the Vendor or the Company (as
the context may require) that any of the following actions has occurred in relation to it:

	 	(i)	 	an order has been made or an effective resolution passed or other proceedings
or actions taken (including, without limitation, the presentation of a petition) with
a view to its administration, bankruptcy, winding-up, liquidation or dissolution; or
	 
	 	(ii)	 	it has had a receiver, administrative receiver, manager or administrator
appointed over all or any substantial part of its undertaking or assets; or
	 
	 	(iii)	 	any event has occurred or situation arisen in any jurisdiction that has a
substantially similar effect to any of the foregoing.

	 	 	“Interest” means 100% of the entire equity interest of the Company.
	 
	 	 	“Losses and Expenses” means liabilities, losses, damages, claims, demands, awards and
expenses (including, without limitation, legal costs) and includes, for the avoidance of
doubt, any value added tax (VAT) (or similar tax) payable in relation to any such matter,
circumstance or item (except to the extent that the party claiming Losses and Expenses
obtains credit for such VAT as input tax).
	 
	 	 	“Purchaser Group Companies” means Teekay Offshore Partners LP and any subsidiaries thereof
including the Purchaser and the general partner of Teekay Offshore Partners LP.
	 
	 	 	“Security Interest” means any mortgage, charge (whether fixed or floating), pledge, lien,
hypothecation, encumbrance, assignment, right of set-off, trust arrangement, title retention
or other security interest or other agreement or arrangement of any kind having the effect
of conferring security.
	 
	 	 	“Specified Rate” is the rate of interest equal to yearly LIBOR from time to time plus 100
basis points.
	 
	 	 	“Tax” or “Taxation” means any tax, duty, contribution, impost, levy or charge in the nature
of tax, whether domestic or foreign, and any fine, penalty, surcharge or interest in
relation thereto, including without limitation (and without prejudice to the foregoing)
corporation tax, income tax (including tax failing to be deducted or withheld from or
accounted for in respect of any payment), capital gains tax, value added tax, customs excise
and import duties, stamp duty, stamp duty reserve tax, and any other payment whatsoever that
the Company is or may be or become bound to make to any person and

3

 

	 	 	that is or purports to be in the nature of taxation or otherwise by reason of any taxation
statutes.
	 
	 	 	“Taxation Authority” means any national, local municipal, governmental, state, federal or
fiscal, revenue, customs or excise authority, body, agency or official anywhere in the world
having, or purporting to have power or authority in relation to Tax.
	 
	 	 	“Transaction Documents” means this Agreement and the other documents delivered at Closing
pursuant to Clause 4.
	 
	 	 	“Vendor’s Account” means such account of the Vendor as the Vendor may specify to the
Purchaser from time to time.
	 
	 	 	“Vendor Group Companies” means the Vendor and any subsidiary of the Vendor, from time to
time (except, with effect from Closing, the Company and any Purchaser Group Companies).
	 
	 	 	“Vessel” means the floating storage and offloading unit “DAMIPER SPIRIT” owned by the
Company, details of which are set out in Schedule B.
	 
	 	 	“Warranties” means the representations and warranties set out in Clause 5.1 and Schedule A.

	1.2	 	Interpretation
	 
	(a)	 	Reference to:

	 	(i)	 	a person includes a legal or natural person, partnership, trust, company,
government or local authority department or other body (whether corporate or
unincorporated);
	 
	 	(ii)	 	a statutory or regulatory body shall include its successors and any substituted
body;
	 
	 	(iii)	 	the singular includes the plural and vice versa; and
	 
	 	(iv)	 	one gender includes all genders.

	(b)	 	Unless otherwise stated, a reference to a Clause, sub-clause or Schedule is a reference to a
Clause or sub-clause of, or Schedule to, this Agreement and a reference to this Agreement
includes its Schedules.

	(c)	 	Clause headings in this Agreement and in the Schedules are for ease of reference only and do
not affect its construction.

	(d)	 	In construing this Agreement the so-called ejusdem generis rule does not apply and
accordingly the interpretation of general words shall not be restricted by words indicating a
particular class or particular examples.

4

 

	2	 	AGREEMENT FOR SALE
	 
	2.1	 	Sale and purchase of Interest. Subject to the other provisions of this Agreement, the Vendor
shall sell the Interest to the Purchaser and the Purchaser shall purchase the Interest with
effect from the Closing Date.
	 
	2.2	 	Absolute title to Interest; no Security Interest in Interest. The Vendor shall take all
steps within its power and control (but without any obligation to expend any material amount)
to procure that the Purchaser (as appropriate) will duly obtain absolute title to the entire
legal and beneficial interest in the Interest, and all rights (whether in respect of
distributions, voting or otherwise) that at the Closing Date or any later time are conferred
on or by any of the Interest, free from any Security Interest.
	 
	3	 	CONSIDERATION
	 
	3.1	 	Payment of Consideration. The Consideration shall be the sum of US$30,253,000 (Thirty
Million, Two Hundred and Fifty-Three Thousand United States Dollars), payable as follows:

	 	 	 	 	 
	 

	 	Intermediary Bank:
	 	Bank of New York,

 New York
	 

	 	Intermediary Bank’s SWIFT:
	 	IRVTUS3N
	 

	 	ABA:
	 	021 000 018
	 

	 	Beneficiary Bank:
	 	DnB NOR Bank ASA, 

New York
	 

	 	Address:
	 	200 Park Avenue,

 New York, NY 10166-0396
	 

	 	Account Number:
	 	8026001499
	 

	 	Beneficiary Bank’s SWIFT:
	 	DNBAUS33
	 

	 	Account Name:
	 	Teekay Corporation
	 

	 	Account Number:
	 	14712001
	 

	 	Currency:
	 	USD

	3.2	 	Vendor’s Undertakings. In addition to the transfer of the Interest to the Purchaser, the
Vendor further undertakes as follows:
	 
	(a)	 	that on Closing, it shall procure that the Company shall have no net liabilities other than
the liabilities disclosed in the Disclosure Statement;
	 
	(b)	 	following the Closing Date and upon receiving any notices, correspondence, information or
enquiries in relation to the Company, the Interest, the Vessel or the Contracts, it shall
forthwith pass copies thereof to the Purchaser and shall hold in trust for the Company and
account forthwith to the Company for any monies received after the Closing Date on account of
the Company.

5

 

	4	 	COMPLETION
	 
	4.1	 	Timing and place of Closing. Subject to the provisions of this Agreement, Closing shall be
effected by the Vendor satisfying its obligations under Clauses 4.2 and by the Purchaser
satisfying its obligations under Clause 4.3 and shall take place on the Completion Date.
	 
	4.2	 	Vendor’s Closing obligations. The Vendor shall deliver or procure that there are delivered
to the Purchaser on or before the Completion Date (as the context may permit):
	 
	(a)	 	duly executed transfers in respect of the Interest in favour of the Purchaser;
	 
	(b)	 	the certificates, if any, for the Interest (or an indemnity in the approved form for any lost
certificates);
	 
	(c)	 	a certified copy of the minutes of a meeting of the directors of the Vendor (certified as at
the date of Closing to be a certified copy of such resolutions in full force and effect and
certifying that such resolutions have not been revoked), authorising the execution of the
Transaction Documents (to which it is party) and the performance by Vendor of its obligations
thereunder;
	 
	(d)	 	all statutory and minute books (in every case written up to, but not including, the Closing
Date), common seals, certificates of formation and certificates of amendment (or equivalent),
cheque books, bank mandates and other books and records (whether statutory, financial or
otherwise) of the Company as applicable and all certificates and documents of title relating
to any investments of the Company;
	 
	(e)	 	the original copies of the Contracts;
	 
	(f)	 	evidence satisfactory to the Purchaser that all amounts payable by the Company under any loan
facilities made available by the Vendor (other than with respect to amounts Disclosed as
liabilities in the Disclosure Schedule), any bank, financial institution, or any other person
whether on the basis of any Security Interest provided by the Company, and whether in relation
to the Vessel or otherwise, have been paid in full and all associated Security Interests
(including, without limitation, those identified in the Disclosure Schedule) and any other
agreements or obligations entered into by the Company for the benefit of themselves
respectively or any other person have been terminated or released and, in relation to Security
Interests, reassigned to the Company or to the person giving the same; and
	 
	(g)	 	the duly executed certificate of an officer of the Vendor dated on the Completion Date, in
form reasonably acceptable to the Purchaser, certifying on behalf of the Vendor to the
accuracy of representations and Warranties of the Vendor contained in this Agreement.
	 
	4.3	 	Purchaser’s Closing obligations. The Purchaser shall on the Completion Date and subject to
the transfer of the Interest:
	 
	(a)	 	deliver or procure that there are delivered to the Vendor a certified copy of the minutes of
a meeting of the directors of its general partner, authorising the execution of this

6

 

	 	 	Agreement and any other Transaction Document that it is to execute pursuant to this
Agreement;
	 
	(b)	 	pay to the Vendor the Consideration by transferring such amount to the Vendor’s Account for
value on the Completion Date;
	 
	4.4	 	Closing obligations not fulfilled. If either party fails, for any reason, to comply with any
of its obligations under the foregoing provisions of this Clause 4, the other party may, at
its option:
	 
	(a)	 	by written notice to the first party defer the date for Closing by one or more periods that
shall not exceed 20 (twenty) Business Days in aggregate in respect of either all of the
parties’ obligations under the foregoing provisions of this Clause 4 or such of those
obligations that have not been complied with; or
	 
	(b)	 	proceed to Closing so far as practicable but without prejudice to the second party’s rights
(whether under this Agreement or the general law) as regards the obligations with which the
first party has not complied; or
	 
	(c)	 	waive all or any of the obligations in question of the first party.
	 
	(d)	 	If Closing is deferred to another date in accordance with Clause 4.4(a), and Closing is
effected, the provisions of this Agreement shall apply as if that other date were the Closing
Date.
	 
	5	 	WARRANTIES
	 
	5.1	 	General. The Vendor represents, warrants and undertakes, subject to Clause 5.8, that each
statement in Schedule A is at the Closing date and the Completion Date true, accurate and not
misleading in any respect.
	 
	5.2	 	Claims. The Vendor hereby unconditionally and irrevocably covenants with the Purchaser that,
subject always to the limitations set out in Clause 6, it will indemnify the Purchaser and the
Company against all Losses and Expenses that any of the Purchaser Group Companies or the
Company may suffer or incur or pay in enforcing its rights in connection with any matter
referred to in this Agreement or any of the Transaction Documents including, without
limitation:

	 	(i)	 	the disputing and/or settlement of any Claims and any steps taken to avoid
and advice sought in connection with any actual, threatened or anticipated Claims;
	 
	 	(ii)	 	any legal proceedings in which any of the Purchaser Group Companies or the
Company makes a Claim; and
	 
	 	(iii)	 	the enforcement of any such settlement or judgement.

	5.3	 	Reliance on Warranties. The Vendor acknowledges that:

7

 

	 	(a)	 	the Purchaser has been induced to enter and is entering into this Agreement and
the other Transaction Documents on the basis of and in reliance upon the Warranties;

	 	(b)	 	the Purchaser may rely on the Warranties to the exclusion of any other
information, and that, with the exception of matters set forth in the Disclosure
Schedule, the Purchaser’s rights in respect thereof will not be in any way impaired as
a result of any other information being possessed by or available to any Purchaser
Group Companies or any officer, employee, professional or financial adviser of, or
person acting on behalf of, the Purchaser or any Purchaser Group Companies.

	5.4	 	Warranties are separate and independent. Each Warranty shall be construed as a separate and
independent warranty and, save as expressly provided otherwise, shall not be limited or
restricted by reference to or inference from any other terms of this Agreement or any other
Warranty.
	 
	5.5	 	Reduction in Consideration. Any payments made by the Vendor to the Purchaser in respect of
Claims shall, to the extent lawfully possible, be treated by the parties as a reduction in the
Consideration; provided, however, that this Clause 5.5 shall not in any way limit or restrict
the amount recoverable by the Purchaser or any other person under this agreement to the amount
of the Consideration or any other amount (but this is without prejudice to the limitations set
out in Clause 6).
	 
	5.6	 	Awareness of Vendor and Ordinary Course of Business. Where any Warranty is qualified by
reference to the awareness, knowledge, information or belief of the Vendor (or any similar
expression), the Vendor shall be deemed to have such awareness, knowledge, information or
belief as it would have after having made reasonable enquiry of the senior executive managers
and officers of the Vendor. In relation to each of the Warranties concerning the assets,
liabilities, Contracts, Vessel or results of the Company, such Warranties shall be deemed to
be qualified by reference to exclude any matters (whether or not Disclosed) arising in the
ordinary and normal course of trading since the Closing Date.
	 
	5.7	 	Provision of information. The Vendor undertakes promptly to provide the Purchaser with any
information that the Purchaser may by written notice request in relation to:
	 
	(a)	 	any of the Warranties or any statement of fact contained elsewhere in this Agreement or any
other Transaction Document; or
	 
	(b)	 	the Disclosure Schedule or any other disclosure made or information provided (or purportedly
made or provided) under this Clause 5.7; or
	 
	(c)	 	any matter or question connected with or arising out of any of the foregoing,
	 
	 	 	but this only applies to information that is (either at the Closing Date or at the date of
the request) in the possession of the Vendor or that the Vendor or any of its professional
advisers can reasonably be expected to obtain and present without undue efforts.

8

 

	5.8	 	Disclosure in Disclosure Schedule. The Vendor shall not have any liability in respect of any
Claim if and to the extent that any fact, matter or circumstance that causes any of the
Warranties to be breached or that might result in a Claim or possible Claim has been Disclosed
in the Disclosure Schedule or otherwise in any of the Transaction Documents.
	 
	5.9	 	Notification of potential Claims before Closing. If, at any time before Closing, the Vendor
becomes aware of any Claim or any matter that could reasonably be expected to cause a Claim to
arise or any matter that at Closing would constitute a Claim or could reasonably be expected
to cause a Claim to arise, it shall forthwith disclose the same in writing to the Purchaser.
	 
	6	 	REMEDIES OF THE PURCHASER
	 
	6.1	 	Survival. Subject to the limitations and other provisions of this Agreement and the
Transaction Documents, the representations and warranties of the Vendor contained in this
Agreement (including the Schedules hereto), the Disclosure Schedule and the Transaction
Documents shall survive the Closing and remain in full force and effect for a period of
12 months after the Closing Date; provided, however, that (a) the Warranties in Clauses 1.2
(Title to Interest), 1.3 (No arrangements relating to share capital), 11 (Taxation) and 12.1
(No brokers fees) of Schedule A to this Agreement shall survive until, and shall terminate
upon, the date of expiration of the applicable statute of limitations with respect to the
liability in question. The covenants and agreements of the Vendor contained in this Agreement
and the Transactions Documents that by their terms extend beyond the Closing Date shall not
terminate until all obligations with respect thereto have been performed or satisfied or shall
have expired or been terminated in accordance with their terms.
	 
	6.2	 	Indemnification by the Vendor
	 
	(a)	 	The Vendor agrees, subject to the other terms and conditions of this Agreement and the
Transaction Documents, to indemnify the Purchaser and the Purchaser Group Companies against
and hold it harmless from any and all (i) Losses and Expenses to the Purchaser, any Purchaser
Group Company or the Company arising out of or related to the breach of any representation,
warranty, covenant or agreement of the Vendor in this Agreement (including the Schedules
hereto), the Disclosure Schedule and the Transaction Documents, to the extent Vendor is
notified by the Purchaser of such Losses or Expenses prior to expiration of the applicable
survival period set forth in Clause 6.1 above, (ii) any Covered Environmental Losses relating
to the Interest to the extent that the Vendor is notified by the Purchaser of any such Covered
Environmental Losses within five (5) years after the Closing Date; (iii) Losses or Expenses
to the Purchaser, the Purchaser Group Companies or the Company arising from (A) the failure of
the Purchaser Group Companies, immediately after the Closing Date, to be the owner of such
ownership Interest in and to the Interest as are necessary to enable the Purchaser Group
Companies to own and operate the Interest and/or the Vessel in substantially the same manner
that the Interest and/or the Vessel were owned and operated by the Vendor Group Companies
immediately prior to the Closing Date or (B) the failure of the Purchaser Group Companies to
have on the Closing Date any consent or governmental permit necessary to allow the Purchaser
Group Companies to own or operate the Interest in substantially the same manner that the
Interest were owned and operated by the Vendor Group Companies immediately prior to the
Closing Date, in

9

 

	 	 	each of clauses (A) and (B) above, to the extent that the Vendor is notified by the
Purchaser of such Losses or Expenses within three (3) years after the Closing Date; and (iv)
all federal, state, foreign and local income tax liabilities attributable to the operation
of the Interest prior to the Closing Date.
	 
	(b)	 	The aggregate liability of the Vendor under Clause 6.2(a) above shall not exceed $10,000,000
(Ten Million United States Dollars). Furthermore, no claim may be made against the Vendor for
indemnification pursuant to Clause 6.2(a) unless the aggregate dollar amount of all claims for
indemnification pursuant to such clause shall exceed $500,000 (Five Hundred Thousand United
States Dollars), in which case the Vendor shall be liable for claims for indemnification only
to the extent such aggregate amount exceeds $500,000 (Five Hundred Thousand United States
Dollars).
	 
	6.3	 	General Provisions.
	 
	(a)	 	The Purchaser agrees that within a reasonable period of time after it becomes aware of facts
giving rise to a claim for indemnification pursuant to Clause 6.2, it will provide notice
thereof in writing to the Vendor specifying the nature of and specific basis for such claim.
	 
	(b)	 	The Vendor shall have the right to control all aspects of the defence of (and any
counterclaims with respect to) any claims brought against the Purchaser, the Purchaser Group
Companies or the Company that are covered by the indemnification set forth in Clause 6.2,
including, without limitation, the selection of counsel, determination of whether to appeal
any decision of any court and the settling of any such matter or any issues relating thereto;
provided, however, that no such settlement shall be entered into without the consent (which
consent shall not be unreasonably withheld) of the Purchaser (with the concurrence of the
conflicts committee of Teekay Offshore Operating GP L.L.C.) unless it includes a full release
of the Purchaser, the Purchaser Group Companies and the Company from such matter or issues, as
the case may be.
	 
	(c)	 	The Purchaser agrees to cooperate fully with the Vendor with respect to all aspects of the
defence of any claims covered by the indemnification set forth in Clause 6.2, including,
without limitation, the prompt furnishing to the Vendor of any correspondence or other notice
relating thereto that the Purchaser, the Purchaser Group Companies or the Company may receive,
permitting the names of such parties to be utilized in connection with such defence, the
making available to the Vendor of any files, records or other information of such parties that
the Vendor considers relevant to such defence and the making available to the Vendor of any
employees of the Purchaser, the Purchaser Group Companies or the Comapny; provided, however,
that in connection therewith the Vendor agrees to use reasonable efforts to minimize the
impact thereof on the operations of such parties and further agrees to maintain the
confidentiality of all files, records and other information furnished by any such party
pursuant to this Clause 6.3. In no event shall the obligation of the Purchaser to cooperate
with the Vendor as set forth in the immediately preceding sentence be construed as imposing
upon the Purchaser an obligation to hire and pay for counsel in connection with the defence of
any claims covered by the indemnification set forth in this Clause 6; provided, however, that
the Purchaser may, at its own option, cost and expense, hire and pay for counsel in connection
with any such defence. The Vendor agrees to keep any such counsel hired by the Purchaser
reasonably informed as to the status of any such defence (including

10

 

	 	 	providing such counsel with such information related to any such defence as such counsel may
reasonably request) but the Vendor shall have the right to retain sole control over such
defence.
	 
	(d)	 	In determining the amount of any Loss or Expense for which the Purchaser, any Purchaser Group
Company or the Company is entitled to indemnification under this Agreement, the gross amount
of the indemnification will be reduced by (i) any insurance proceeds realized by such parties,
and such correlative insurance benefit shall be net of any incremental insurance premium that
becomes due and payable by such parties as a result of such claim, and (ii) all amounts
recovered by such parties under contractual indemnities from third persons. The Purchaser
hereby agrees to use commercially reasonable efforts to realize any applicable insurance
proceeds or amounts recoverable under such contractual indemnities; provided, however, that
the costs and expenses (including, without limitation, court costs and reasonable attorneys’
fees) of the Purchaser, the Purchaser Group Companies or the Company in connection with such
efforts shall be promptly reimbursed by the Vendor in advance of any determination of whether
such insurance proceeds or other amounts will be recoverable.
	 
	(e)	 	The Purchaser hereby acknowledges and agrees that its sole and exclusive remedy with respect
to any and all claims relating to the subject matter of this Agreement and the Transaction
Documents shall be pursuant to the indemnification provisions set forth in this Clause 6. In
furtherance of the foregoing, the Purchaser hereby waives, to the fullest extent permitted
under applicable law, any and all rights, claims and causes of action it may have against the
Vendor and the Vendor Group Companies arising under or based upon any federal, state, foreign
or local statute, law, ordinance, rule or regulation (including, without limitation, any such
rights, claims or causes of action arising under or based upon common law or otherwise).
	 
	7	 	IMPLEMENTATION
	 
	7.1	 	Further assurances. The Vendor shall (and shall procure that any other relevant person
shall) execute any deeds or documents and exercise or waive any rights and generally take any
action, including passing (or procuring that there is passed) any resolution of the Vendor or
(whilst the Vendor remains the registered owner) the Company that the Purchaser may reasonably
require, which may be necessary for the Transaction Documents to be carried into effect.
	 
	8	 	COSTS
	 
	8.1	 	Responsibility for costs. Except where expressly provided otherwise, each party shall pay
its own costs connected with the negotiation, preparation, execution and implementation of the
Transaction Documents and any matters connected therewith and investigating the affairs of the
Company.
	 
	9	 	OTHER PROVISIONS
	 
	9.1	 	Entire agreement. This Agreement together with the other Transaction Documents constitutes
the entire agreement between the parties regarding the sale and purchase of the Interest and
related matters and supersedes any prior drafts, agreements, undertakings, representations,
warranties and arrangements of any kind, whether or not

11

 

	 	 	in writing, regarding the same, all
of which are hereby terminated and
shall cease to have effect in all
respects, and the parties confirm
that there are no collateral or
supplemental agreements relating to
the Transaction Documents, except as
expressly set forth herein or
therein.
	 
	9.2	 	Assignment.
	 
	(a)	 	This Agreement shall be binding on and enure for the benefit of each party’s successors and
permitted assigns. Save as provided in Clause 9.2(b), no party shall, without the prior
written consent of the other party, assign, transfer, charge or deal in any other manner with
this Agreement or any of its rights (whether to damages or otherwise) or obligations arising
under or in connection with the Agreement, or purport to do any of the same, nor sub-contract
any or all of its obligations under this Agreement, and any such assignment, transfer, charge
or dealing shall be void for all purposes.
	 
	(b)	 	The Purchaser may assign all or any part of its rights and benefits under this Agreement to
any Purchaser Group Companies.
	 
	(c)	 	Subject to and upon any succession or assignment permitted by this Agreement, any such
successor or assignee shall in its own right be able to enforce any term of this Agreement in
accordance with the terms of this Agreement as if it were a party, but until such time shall
have no rights whether as a third party or otherwise. The Vendor shall have no greater
liabilities towards any successor or assignee of the Purchaser than it would have had to the
Purchaser had the Purchaser remained fully and solely entitled under this Agreement.
	 
	9.3	 	Right of set-off, deductions and withholdings and Tax on payments.
	 
	(a)	 	The Purchaser shall not be entitled to set off against the Consideration any sums owing to it
by the Vendor.
	 
	(b)	 	If any deduction or withholding is required by law to be made from any payment from one party
to another party under any Transaction Document, the party making the payment shall increase
the amount thereof so as to ensure that the recipient receives and is able to retain that
amount that it would have received and retained had the payment not been the subject matter of
such deduction or withholding provided always that if the recipient is entitled to a credit or
some other benefit as a consequence of the payment to it being the subject matter of a
deduction or withholding it shall use its reasonable endeavours to utilise the credit (whether
by set off, or by claiming a repayment in respect thereof, or otherwise) or benefit so arising
and in the event that it is able so to do it shall repay to the party who made the payment an
amount equal to the credit or benefit so utilised, provided always that this clause is without
prejudice to the limitations on the Vendor’s liabilities as set out in Clause 6. For the
avoidance of doubt, this clause shall not impose upon the recipient of the payment any
obligation to utilise any credit or benefit in priority to any other economic credit or
benefit available to it or to pay to the party making the payment an amount greater than that
by which the original payment was increased under this Clause 9.3.
	 
	(c)	 	If any payment from the Vendor to the Purchaser under any Transaction Document is liable to
Tax in the hands of the Purchaser, the Vendor shall increase the payment by

12

 

	 	 	such an amount as will ensure that the Purchaser is
able to receive and retain, after paying Tax in
respect of its receipt, an amount equal to that which
would otherwise have been paid to it had the receipt
not been subject to Tax in its hands, provided always
that this clause is without prejudice to the
limitations on the Vendor’s liabilities as set out in
Clause 6. The parties shall agree to the amount of
any increase in a relevant payment to give effect to
this Clause 9.3. In the event that the parties are
not able to agree the amount of any increase, the
amount thereof shall be certified by the Purchaser’s
auditors acting as experts whose decision in respect
thereof shall be binding on the relevant parties
except in the case of manifest error.
	 
	9.4	 	Waivers, rights and remedies.
	 
	(a)	 	No failure or delay on the part of either party to this Agreement in exercising any right or
remedy provided by law or under this Agreement shall impair such right or remedy or operate as
a waiver or variation of it or preclude its exercise at any subsequent time and no single or
partial exercise of any such right or remedy shall preclude or restrict any other or further
exercise of it or the exercise of any other right or remedy.
	 
	(b)	 	A waiver by either party to this Agreement of a breach of or default under any Transaction
Document shall not constitute a waiver of any other breach or default, shall not affect the
other terms of any Transaction Document or the rights of any other person thereto and shall
not prevent the Purchaser from subsequently requiring compliance with the waived obligation.
	 
	(c)	 	Any waiver (in whole or in part) of any right or remedy under this Agreement must be set out
in writing, signed by or on behalf of the person granting the waiver and may be given subject
to any conditions thought fit by the grantor and, unless otherwise expressly stated, any
waiver shall be effective only in the instance and only for the purpose for, and in favour of
the person to, which it is given.
	 
	(d)	 	Unless specifically provided otherwise, the rights and remedies of the Purchaser and the
Vendor under or pursuant to any Transaction Document are cumulative, may be exercised as often
as the Purchaser or the Vendor, as applicable considers appropriate and are in addition to its
rights and remedies under the general law.
	 
	9.5	 	Variations. No variation of any Transaction Document shall be valid unless it is agreed in
writing and signed by or on behalf of each of the parties thereto.
	 
	9.6	 	Effect of Closing. This Agreement (other than obligations that have already been fully
performed) remains in full force after Closing.
	 
	9.7	 	Provisions of Agreement severable. If any provisions of this Agreement or any other
Transaction Document is, or becomes, invalid, unenforceable or illegal, in whole or in part,
under the laws of any jurisdiction, such term or provision or part shall to that extent be
deemed not to form part of this Agreement or the relevant Transaction Document (as the case
may be), but the validity, enforceability or legality of the remaining provisions of this
Agreement or the relevant Transaction Document shall not be impaired.
	 
	9.8	 	Interest for late payment. Any sum owing by either party under this Agreement shall carry
interest from (and excluding) the date on which it is payable until (and including)

13

 

	 	 	the date of actual payment at the Specified Rate; such interest will be compounded
semi-annually and be payable after as well as before any judgment.
	 
	9.9	 	Counterparts. This Agreement and each of the other Transaction Documents may be entered into
in any number of counterparts and by the parties thereto on separate counterparts, each of
which when so executed and delivered shall be an original but each such Transaction Document
shall not be effective until each party thereto has executed at least one counterpart, but all
the counterparts for each Transaction Document shall together constitute one and the same
instrument.
	 
	9.10	 	Third party rights. This Agreement and the other Transaction Documents are made for the
benefit of the respective parties hereto and thereto and their successors and permitted
assigns only and are not intended to benefit, and no term thereof shall be enforceable by, any
other person by virtue of the Contracts (Rights of Third Parties) Act 1999.
	 
	10	 	NOTICES
	 
	10.1	 	General. Any notice under or in connection with this Agreement shall be in writing and may
be delivered by hand or fax to the address of the relevant party that is set out below or to
such other address as that party may have notified in writing from time to time to the party
serving the notice, which notice so served by fax shall be deemed to have been received at the
time of despatch:
	 
	(a)	 	the Vendor

	 	 	 	 	 
	 

	 	Name:
	 	Teekay Corporation
	 

	 	Address:
	 	Bayside House, Bayside Executive Park,
	 

	 	 	 	West Bay Street & Blake Road,
	 

	 	 	 	P.O. Box AP-59212,
	 

	 	 	 	Nassau, The Bahamas
	 	 	Fax Number: +1 242 502 8840
	 
	 	 	marked for the attention of the Corporate Secretary

	(b)	 	the Purchaser

	 	 	 	 	 
	 

	 	Name:
	 	Teekay Australia Offshore Holdings Pty Ltd.
	 

	 	Address:
	 	Level 6, Bayview Tower,
	 

	 	 	 	1753-1765 Botany Road,
	 

	 	 	 	Banksmeadow NSW 2019,
	 

	 	 	 	Australia
	 

	 	 	 	Fax Number: :+61 (2) 9316 1001

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	11	 	GOVERNING LAW AND JURISDICTION
	 
	11.1	 	English law. This Agreement is governed by, and shall be construed in accordance with,
English law.
	 
	11.2	 	Arbitration.
	 
	(a)	 	Any dispute arising out of this Agreement shall be referred to arbitration in London in
accordance with the Arbitration Act 1996 and any statutory re-enactment or modification
thereof before a sole arbitrator agreed by the parties or failing agreement within 7 days of
receipt by one party of a notice (the “First Notice”) from the other proposing an arbitrator,
a tribunal of three arbitrators comprising:

	 	(i)	 	the arbitrator proposed in the First Notice;
	 
	 	(ii)	 	an arbitrator appointed by the party that received the First Notice; and
	 
	 	(iii)	 	an arbitrator, who shall be the chairman, appointed by the two arbitrators
referred to in (i) and (ii) above.

	 	 	If the party receiving the First Notice does not within 14 days of receipt thereof notify
the other party of its appointed arbitrator, the arbitrator referred to in (i) above shall
be deemed appointed as sole arbitrator.
	 
	(b)	 	Once appointed in relation to a dispute, a sole arbitrator or tribunal shall resolve all
other disputes between the parties in relation to this Agreement, subject to the availability
of the arbitrator(s).
	 
	12	 	TERMINATION
	 
	12.1	 	Termination. This Agreement may be terminated upon written notice given at any time before
the Closing:
	 
	(a)	 	by the mutual written consent of the Vendor and the Purchaser;
	 
	(b)	 	subject to the provisions of Clause 4.4, by the Vendor or the Purchaser, if the Closing shall
not have occurred prior to October 1st 2007 (the “Expiration Date”); provided,
however, that the right to terminate this Agreement under this Clause 12.1(b) shall not be
available to any party whose failure to fulfill any obligation under this Agreement shall have
been the cause of, or shall have resulted in, the failure of the Closing to occur prior to
such date;
	 
	(c)	 	by the Vendor, in the event of a material breach by the Purchaser of any representation,
Warranty, covenant or agreement of the Purchaser contained herein that has not been cured or
is not curable by the Expiration Date; or
	 
	(d)	 	by the Purchaser, in the event of a material breach by the Vendor of any representation,
Warranty, covenant or agreement of the Vendor contained herein that has not been cured or is
not curable by the Expiration Date.

15

 

	12.2	 	Effect of Termination. In the event of the termination of this Agreement pursuant to
Clause 12.1 above, the parties shall be relieved of their obligations under this Agreement,
save that Clauses 1, 10 and 11 shall continue in full force and effect, and neither party
shall have any claims against the other party in connection with this Agreement except in
respect of any accrued rights or obligations arising under this Agreement before termination
or in connection with any antecedent breach by any party of any provision of this Agreement or
any breach by any party of any continuing provision of this Agreement.
	 
	13	 	GST

	 	(a)	 	Definitions

	 	(i)	 	In this clause 13 the expressions “adjustment note”,
“consideration”, “GST”, “supply”, “tax invoice”, “supplier”, “recipient” and
“taxable supply” have the meanings given to those expressions in the GST Act.
	 
	 	(ii)	 	For the avoidance of doubt, “GST” excludes any penalties or
additional tax imposed in relation to the GST.

	 	(b)	 	Sums exclude GST
	 
	 	 	 	Unless otherwise expressly stated, the consideration to be provided or payment
obligation under this Agreement is exclusive of GST.
	 
	 	(c)	 	Responsibility for GST

	 	(i)	 	Despite any other provision in this Agreement, if GST is
imposed on any supply made under this Agreement, the recipient must pay to the
supplier an amount equal to the GST payable on the supply.
	 
	 	(ii)	 	The recipient must pay the amount referred to in clause
13Error! Reference source not found.(i) in addition to and at the same time as
payment for the supply is required to be made under this Agreement.
	 
	 	(iii)	 	The supplier will be responsible for any GST penalties,
interest or additional tax imposed on the supplier and attributable to its act
or omission.

	 	(d)	 	Tax invoice
	 
	 	 	 	If a supply is made to which GST applies or is varied under this Agreement, the
supplier must provide to the recipient of the supply a valid tax invoice or
adjustment note at or before the time of payment or variation.
	 
	 	(e)	 	Adjustment
	 
	 	 	 	If the amount of GST paid or payable by the supplier on any supply made under

16

 

	 	 	 	this Agreement differs from the amount of GST paid by the recipient, because the
Commissioner of Taxation lawfully adjusts the value of the taxable supply for the
purpose of calculating GST, then the amount of GST paid by the recipient will be
adjusted accordingly by a further payment by the recipient to the supplier or the
supplier to the recipient, as the case requires.

[Remainder of This Page Intentionally Left Blank]

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SCHEDULE A

WARRANTIES AND REPRESENTATIONS

	1	 	THE COMPANY AND THE INTEREST
	 
	1.1	 	Information.
	 
	 	 	The Company is duly formed and validly existing under the laws of The Republic of the
Marshall Islands. The Company has the requisite power and authority to own and operate its
properties and assets and to carry on its business.
	 
	1.2	 	Title to Interest. The Interest constitutes 100% of the equity interests of the Company and
Vendor is the sole legal and beneficial owner of the Interest, and no claim has been made by
any person to be entitled to any of them. The Interest has been duly authorized, properly
allotted and validly issued and are fully paid, or credited as fully paid, and non-assessable.
There is no Security Interest, option, conversion right, right to acquire, or other adverse
interest, right, equity, claim or potential claim of any description on or over or affecting
any of the Interest nor are there any agreements, arrangements or commitments to give or
create any such Security Interest, right or claim, and no claim has been made by any person to
be entitled to any.
	 
	1.3	 	No arrangements relating to share capital. The Company has not created or issued any shares
or equity interests (other than the Interest). There is no agreement, arrangement, obligation
or commitment (including an option or right of pre-emption or conversion) requiring or
granting any person the right to require the creation, allotment, issue, transfer, redemption
or repayment of, or creating or requiring the creation of any Security Interest over, or
requiring the grant to a person of the right (conditional or not) to require the allotment,
issue, transfer, redemption or repayment of, any shares, equity or loan capital in the Company
(or any unissued shares, equity capital, loan capital or other securities of the Company) now
or at any time in the future, and the Company has agreed to do or enter into any of the
foregoing and no person has made any claim to be entitled to any of the foregoing.
	 
	1.4	 	No capital reorganisation. The Company has not since its incorporation or formation:
	 
	(a)	 	made any issue of securities by way of capitalisation of profits or reserves (including share
premium account and capital redemption reserve); or
	 
	(b)	 	repaid, purchased or redeemed any shares of any class of its share capital or otherwise
reduced its share capital or any class of it;
	 
	 	 	and have not agreed to do any of the foregoing (whether at the option of any other person or
otherwise).
	 
	1.5	 	No agreement/arrangement. Neither the Vendor nor the Company are party to any agreement or
arrangement concerning:

18

 

	(a)	 	the transfer or disposal of the Interest or any interest therein or any restriction thereon
or obligation relating thereto;
	 
	(b)	 	the exercise of votes at meetings of the board of the Company (if any) or of the holders of
any class of Interest; or
	 
	(c)	 	the right to appoint or remove any directors or officers of the Company (where applicable).
	 
	1.6	 	No Security Interest over assets. There is no Security Interest (other than liens arising in
the usual course of business consistent with past practices) affecting the whole or any
material part of the assets of the Company.
	 
	2	 	THE VENDOR
	 
	2.1	 	Capacity of Vendor. As regards the Vendor:
	 
	(a)	 	it has the requisite power and authority to enter into the Transaction Documents to which it
is a party and perform all its obligations thereunder;
	 
	(b)	 	the Transaction Documents to which it is a party constitute (or will constitute when
executed) its legal, valid and binding obligations enforceable against it in accordance with
their terms;
	 
	(c)	 	it has the power and authority to absolutely and unconditionally sell and transfer the full
legal and beneficial ownership in the Interest registered in its name to the Purchaser on the
terms set out in this Agreement;
	 
	(d)	 	the execution and delivery of the Transaction Documents and performance by it of the
obligations thereunder do not and will not result in a breach of, or constitute any default
under, any law or regulation, any order, judgement or decree by any court or governmental
agency to which it is a party or by which it is bound, its Articles of Incorporation and
Bylaws or any agreement to which it is a party;
	 
	(e)	 	all consents, licences, approvals and authorisations required by it in connection with the
Transaction Documents to which it is a party and the transactions contemplated thereby have
been obtained and are in full force and effect;
	 
	(f)	 	no action, suit, proceeding, litigation or dispute against it or any Vendor Group Company is
presently taking place or pending or, to its knowledge, threatened that would or might
reasonably be expected to inhibit its ability to perform its obligations under the Transaction
Documents to which it is a party or that could materially and adversely affect the Interest;
and
	 
	(g)	 	in so far as it is a body corporate:

	 	(i)	 	it is a body corporate duly incorporated and validly existing under the laws
of the jurisdiction in which it is incorporated;

19

 

	 	(ii)	 	no Insolvency Event has occurred in relation to it and no events or
circumstances have arisen that entitle or could entitle any person to take any action,
appoint any person, commence proceedings or obtain any order instigating an Insolvency
Event.

	2.2	 	Vendor/Company relationship. Neither the Vendor nor any Vendor Group Companies:
	 
	(a)	 	owe any indebtedness or other liability which has not been Disclosed and which in aggregate
exceeds $100,000 (One Hundred Thousand United States Dollars) to the Company whether actually
or contingently, whether solely or jointly with any other person and whether as principal or
surety, and there is no such indebtedness or liability which has not been Disclosed and which
in aggregate exceeds $100,000 (One Hundred Thousand United Stated Dollars) due or owing by the
Company to the Vendor, or any Vendor Group Companies and there is no guarantee or Security
Interest in respect of any such indebtedness or liability outstanding;
	 
	(b)	 	are party to any agreement, arrangement or understanding, other than the Transaction
Documents, with the Company or relating to the Company or the Interest or the Vessel in which
the Vendor, or any Vendor Group Company is or has been interested, whether directly or
indirectly, and there is no agreement, arrangement or understanding to which the Company is a
party and in which the Vendor, or any Vendor Group Company has or has had an interest, whether
directly or indirectly; or
	 
	(c)	 	is entitled to a claim of any nature against the Company, which has not been Disclosed or
which individually does not exceed $100,000 (One Hundred Thousand United States Dollars), or
has assigned to any person the benefit of a claim against the Company to which it would
otherwise be entitled.
	 
	3	 	AGREEMENTS
	 
	3.1	 	Disclosure of Contracts. Complete and accurate copies of all Contracts (including all
amendments and supplemental agreements relating thereto) have been provided to the Purchaser
and all Contracts are set out in the Disclosure Schedule.
	 
	3.2	 	Enforceability of and compliance with agreements. In relation to each Contract:
	 
	(a)	 	the Vendor has no reason to believe that the Company will be unable to complete and fulfil
each of the Contracts by the due date and within the estimated level of costs or that any
products sold or to be sold by the Company are or will be unable to meet the specifications
contracted for;
	 
	(b)	 	the Company is in the possession or in the control of each such Contract;
	 
	(c)	 	so far as the Vendor is aware, there are no written or oral agreements that derogate from the
obligations of any person other than the Company or increase the obligations of the Company
under the Contracts;
	 
	(d)	 	each such Contract has been validly executed by the respective Company, is valid and
subsisting, has not been terminated and is fully enforceable against the such of the

20

 

	 	 	Company
and, to the Vendor’s knowledge, the other parties to such agreement in accordance with its
terms;
	 
	(e)	 	none of such Contracts is subject to a Security Interest granted or created by the Company or
the Vendor Group Companies other than under the terms of the relevant Contract;
	 
	(f)	 	to the Vendor’s knowledge, there is no and has not been, at any time, any breach of, or any
default in the performance of, the terms of any such Contracts by any person other than the
Company nor are there any circumstances likely to give rise to such breach or default. The
Company has not granted any time or indulgence, or waived any right, in relation to any such
Contract and, in particular, but without prejudice to the generality of the foregoing, all
amounts due and payable under such agreements have been duly paid in full on, or within a
reasonable period of, the due date for payment of the same;
	 
	(g)	 	so far as the Vendor is aware, the Company has fulfilled all of their obligations and
performed and observed all warranties, undertakings, covenants and agreements on their part to
be fulfilled, performed and observed under each of such Contracts;
	 
	(h)	 	no notice of any intention to terminate, repudiate, rescind, modify or disclaim any provision
of any Contract has been given by the Company or, so far as the Vendor is aware, received from
a person other than the Company by the Company in respect of any such Contract;
	 
	(i)	 	so far as the Vendor is aware, the Company has paid all Taxes, duties, imposts and other
charges payable in respect of the Contracts so far as such Taxes, duties, imposts and other
charges fall upon the Company and have become due and payable;
	 
	(j)	 	all necessary licences, approvals and consents required by the Company prior to the entry
into of each of such Contracts and for their continuation were duly obtained and are
subsisting and, to the Vendor’s knowledge, no circumstances have arisen that may lead to
withdrawal or failure to renew, if applicable, of any such licence, approval or consent;
	 
	(k)	 	there are no disputes or outstanding claims pending or, to the Vendor’s knowledge, threatened
against the Company under such Contracts and, to the Vendor’s knowledge, no person is entitled
to make, or has threatened to make, a claim against the Company in respect of any
representation, breach of condition or warranty or other express or implied term relating to
any such Contracts and no matter exists that would or might enable a person other than the
respective Company to make such a claim or raise a set-off, deduction, withholding or
counterclaim in any action for breach of the relevant Contract or otherwise give any person
other than the Company the right to withhold or delay payment of any sum due from it under the
terms of the relevant Contract or the performance of any of its obligations thereunder;
	 
	(l)	 	so far as the Vendor is aware, no person (other than the parties to such Contracts) has any
rights (including any Security Interests) in respect of any such Contracts or the assets the
subject thereof; and

21

 

	(m)	 	so far as the Vendor is aware, no Insolvency Event has occurred in relation to any third
party to such Contracts.
	 
	3.3	 	No powers of attorney. There are in force no powers of attorney given by the Company nor any
other authority (express, implied or ostensible) given by the Company to or in favour of any
person (as agent or otherwise) to enter into any agreement, contract or commitment or to do
anything on their behalf except as set out in the
Disclosure Schedule. The Disclosure Schedule sets out details of all persons who have
authority to bind the Company in the ordinary course of their business.
	 
	3.4	 	Change of control. Neither the sale of the Interest hereunder nor any change in the
management of the Company as a result of this Agreement will:
	 
	(a)	 	entitle any person to modify or terminate any Contract or other arrangement with the Company;
	 
	(b)	 	result in the breach by the Company under any of the terms, conditions or provisions of any
Contract or other instrument to which the Company is now a party;
	 
	(c)	 	result in any present or future Indebtedness becoming due and payable or capable of being
declared due and payable prior to its stated maturity; or
	 
	(d)	 	entitle any person to receive from the Company any finder’s fee, brokerage or other
commission in connection with the sale of the Interest.
	 
	3.5	 	Offers and tenders. No offer or tender or similar arrangement given or made by the Company
are capable of giving rise to an agreement solely by the unilateral act of any person other
than the Company.
	 
	3.6	 	Joint Ventures etc. The Company does not, and has not agreed to, act or carry on business in
partnership with any other person and are not and have not agreed to act or become a member of
any joint venture, consortium, corporate or unincorporated body, association or undertaking.
	 
	3.7	 	Competition/Anti-trust. The Company is not party to any practice, arrangement or agreement
that infringes or is likely to require registration or notification under any relevant
anti-trust or competition law.
	 
	3.8	 	Restrictive practices. The Company is not and has not been a party to any agreement,
arrangement, understanding or practice restricting the freedom of the Company to carry on the
whole or any part of their business in any place in such manner as they think fit or to
provide or take goods and/or services by such means and from and to such persons and into or
from such places as they may from time to time think fit and/or to compete in any area or in
any field or with any person.
	 
	3.9	 	Directors or Officers.

The management of the Company is vested in its Board of Directors: David Parmeter, Sonia
Manastarovski, and Roger Lowe. The Vendor is, and the Purchaser shall be upon the Closing, the
sole shareholder of the Company with, in its capacity as shareholder, authority to

22

 

appoint
Directors to the Board of the Company to make all decisions and take all actions for the Company
as, in its sole discretion, it shall deem necessary and appropriate to enable the Company to
carry out any lawful activity.

	4	 	FINANCIAL ARRANGEMENTS
	 
	4.1	 	Indebtedness. The Company does not have outstanding nor have they incurred or agreed to
incur any Indebtedness (including, without limitation, any indebtedness for moneys borrowed or
raised under any acceptance credit, bond, rate, bill of exchange or commercial paper, finance
lease, hire purchase agreement, trade bills, forward sale or purchase agreement or conditional
sale agreement or other transaction having the commercial effect of a borrowing).
	 
	4.2	 	Borrowings. The Company has not borrowed any monies from the Vendor, any Vendor Group
Company or any third party.
	 
	4.3	 	Loans by the Company. The Company have not made any loans to the Vendor, any Vendor Group
Company or any third party.
	 
	4.4	 	Debts. The Company has not factored any of its debts. There are no debts owing to the
Company.
	 
	4.5	 	No guarantee or Security Interest. No guarantee or Security Interest has been given or
entered into by the Company or any third party in respect of Indebtedness or other obligations
of the Company and no guarantee or Security Interest has been given or entered into by the
Company in respect of any other person.
	 
	4.6	 	No indemnities given by the Company. The Company is not responsible (including on a
contingent basis) for the indebtedness, or for the default in the performance of any
obligation, of any person nor are they party to any option or pre-emption right or any
guarantee, suretyship or any other obligation (whatever called) to pay, purchase or provide
funds (whether by advance of money, the purchase of or subscription for shares or other
securities or the purchase of assets or services or otherwise) for the payment of, or as an
indemnity against the consequence of default in the payment of, any indebtedness of any
person.
	 
	4.7	 	Bank accounts. Details of all bank accounts of the Company, and particulars of the balances
of all the Company’s bank accounts as at a date not more than 2 (two) Business Days before the
date of this Agreement, have been disclosed to the Purchaser, and the Company has no other
bank accounts. Since the date of such particulars, there have been no material payments out of
any such bank accounts, except for routine payments in the ordinary course of business
consistent with past practices.
	 
	5	 	ASSETS, LIABILITIES AND OTHER ARRANGEMENTS
	 
	5.1	 	No other assets and liabilities. The Company has no assets other than the Vessel and the
Company has no liabilities other than those arising in connection with the Contracts and as
set forth in the Disclosure Schedule and, save for their obligations under the Contracts,
there are no agreements or arrangements to which the Company is

23

 

	 	 	a party that increase the
obligations of the Company under the Contracts or that create or include any other obligation
that might be binding on the Company.
	 
	5.2	 	Business activity. The only business activities of the Company since incorporation or
formation has been the acquisition, ownership, and operation of the Vessel.
	 
	6	 	PROPERTIES
	 
	6.1	 	Properties. The Company does not own, occupy or use any real property.
	 
	7	 	INSURANCE
	 
	7.1	 	Insurance policies. The Company maintains the policies of insurance listed in the Disclosure
Schedule and attached to the Disclosure Schedule, each of which is in full force and effect
and, to the Vendor’s knowledge, not subject to being avoided for any reason.
	 
	8	 	LITIGATION AND OTHER DISPUTES
	 
	8.1	 	No proceedings. The Company is, and, to the Vendor’s knowledge, no director or officer of
the Company (in relation to the Company’s affairs or, if resolved in a manner adverse to such
director or officer, could result in a materially adverse effect on the Company’s business)
is, engaged in or a party to any dispute, litigation, arbitration, prosecution or other legal
proceedings or in any proceedings or hearings before any statutory or governmental body,
department, board or agency, nor are any of the foregoing pending or, to the Vendor’s
knowledge, threatened or expected either against or by the Company, and, to the Vendor’s
knowledge, there is no fact or circumstance or any other form of written demand in existence
that might give rise to the same, or form the basis of any criminal prosecution against the
Company.
	 
	8.2	 	No orders or judgements. There is no order, decree or judgement of any court, tribunal or
any governmental agency of any country outstanding against the Company or, to the Vendor’s
knowledge, any person for whose acts the Company may be vicariously liable, and, to the
Vendor’s knowledge, there are no circumstances likely to give rise to vicarious liability of
the Company, and no injunction has been granted against the Company.
	 
	8.3	 	No unlawful acts. The Company has not committed, or been prosecuted for, any breach of a
statutory or regulatory duty or any tortious or other criminal or unlawful or unauthorised act
that could reasonably be expected to lead, or has led, to a claim for damages or an injunction
or other order of a court or tribunal of competent jurisdiction being made against it, and
there are no circumstances likely to give rise to such a breach or act.
	 
	9	 	COMPLIANCE WITH LEGAL REQUIREMENTS
	 
	9.1	 	Compliance by Company. The Company has, so far as the Vendor is aware, complied and are
continuing to comply in all material respects with all relevant legislation and regulations
and guidelines in any part of the world applicable to them and/or their business and/or their
assets.

24

 

	9.2	 	Ultra vires. The Company is empowered and duly qualified to carry on business in all
jurisdictions in which its present businesses is now carried on and has not entered into any
ultra vires transaction.
	 
	9.3	 	Returns. All returns, particulars, resolutions and other documents required to be filed with
or delivered to the Registrar of Corporations in the Republic of the Marshall Islands by the
Company have been properly prepared and so filed or delivered.
	 
	9.4	 	Limited Liability Company Agreement. The Limited Liability Company Agreement of, and all
resolutions passed by, the Company and all other legal requirements concerning the Company
have been complied with. A copy of the Company’s Limited Liability Company Agreement has been
provided to the Purchaser, which is complete and accurate in all material respects, has
attached thereto or incorporated therein copies of all resolutions and other documents
required by law to be so attached or incorporated, and fully sets out the rights and
restrictions attaching to the Interest.
	 
	9.5	 	Books and records. The statutory books (including all registers and minute books whether
electronic or otherwise), books of account and other statutory records of the Company have
been properly and accurately written up or maintained in accordance with all applicable laws
and are up to date (but not including the date of the Agreement) and comprise complete and
accurate records of all information required to record therein other than to the extent that
they are not material to the business of the respective Company. The Company has not received
any notice or allegation that any of the statutory books, books of accounts or other records
of whatsoever kind of such of the Company are inaccurate or incomplete or should be rectified.
	 
	9.6	 	Company’s name. The Company does not use or otherwise carry on business under any name other
than their full corporate name. The Company has the full right to use their corporate name
without restriction, and the Company and the Vendor are not aware of any actual or threatened
challenge to the use of those names or any of them in respect of the business of the Company
or any claim that any such use infringes any rights of any third party.
	 
	9.7	 	Consents and licences. The Company holds any and all licences (including statutory
licences), permissions, authorisations, consents, registrations and exemptions required by
them for the operation of their business as now carried on, and, to the Vendor’s knowledge,
none of these is subject to revocation or cancellation for any reason.
	 
	9.8	 	No penalties or fines. The Company nor any of its officers (or agents during the course of
their duties) have committed or omitted to do any act or thing that has given or could give
rise to a material claim, fine, penalty or other liability, at law or in equity, in respect of
the physical or environmental condition of any of their fixed or moveable assets, real
property or products.
	 
	9.9	 	No investigations and inquiries. No investigations, inquiries or reviews by or on behalf of
any governmental or other body in respect of the Company or its business or assets are pending
or, to the Vendor’s knowledge, in existence or have been conducted or threatened, and there
are no circumstances that might give rise to such investigation, inquiry or review.

25

 

	10	 	EMPLOYMENT
	 
	10.1	 	Employees. The Company does not, and has never had any employees and there are no
arrangements (written or otherwise) under which remuneration or benefit or other sum
whatsoever is paid or given to any person (including any officer or consultant of the
Company).
	 
	11	 	TAXATION
	 
	11.1	 	Tax Residence.
	 
	(a)	 	The Company is resident in Australia for the purposes of Taxation.
	 
	(b)	 	The Company has never traded through a branch, agency or permanent establishment situated
outside Australia.
	 
	(c)	 	No circumstances exist whereby a person not resident in Australia is assessable and
chargeable to tax in the name of the Company.
	 
	(d)	 	The Company is not liable to pay nor has it at any time incurred any liability to Tax
chargeable under the laws of any jurisdiction other than Australia.
	 
	11.2	 	Disclosures, Notices, Returns, Clearances and Records.
	 
	(a)	 	All notices, reports, disclosures, accounts, computations, statements, assessments,
registrations, de-registrations and any other information that ought to have been made or
supplied by or in respect of the Company for any Taxation purposes have been made or supplied
on a proper basis, were punctually submitted, were accurate and complete when submitted and
remain accurate and complete and are not the subject of any dispute, enquiry or investigation
with any Taxation Authority, and, to the Vendor’s knowledge, there are no present
circumstances that are likely to give rise to any such dispute, enquiry or investigation.
	 
	(b)	 	No action has been taken by the Company in respect of which any consent or clearance from any
Taxation Authority was required except in circumstances where such consent or clearance was
validly obtained, and no conditions were attaching thereto.
	 
	(c)	 	The Company has made and submitted each claim, disclaimer, election, notice and consent to
have been made and submitted, and details of all such claims, disclaimers, elections, notices
and consents are set forth in the Disclosure Schedule.
	 
	(d)	 	The Company has never been subject to any enquiry, visit, audit, investigation or discovery
order by any Taxation Authority nor, to the Vendor’s knowledge, are there any circumstances
existing that make it likely that any such enquiry, visit, audit, investigation or discovery
order will be made in the next 12 months.
	 
	(e)	 	The Disclosure Schedule sets out details of all notices given by any Taxation Authority to or
in relation to the Company, the provisions of which remain in force.

26

 

	(f)	 	The Company has sufficient records relating to past events to permit accurate calculation of
the Taxation liability or relief that would arise upon a disposal or realisation on completion
of each asset owned by the Company before Closing.
	 
	(g)	 	Except as set out in the Disclosure Schedule, the Company’s Taxation affairs are not
dependent on or subject to any concession, agreement or other formal or informal arrangement
with any Taxation Authority.
	 
	11.3	 	All Tax Paid.
	 
	(a)	 	All Taxation for which the Company are liable and that ought to have been paid has been paid
on a timely basis to the appropriate Taxation Authority.
	 
	(b)	 	The Company has not paid, within the three years ending on the date of this Agreement, nor
will become liable to pay, any interest, penalty, fine or surcharge to any Taxation Authority.
	 
	(c)	 	The Company has not received from any Taxation Authority (and has not subsequently repaid to
or settled with that Taxation Authority) any payment to which it was not entitled or any
notice in which their liability to Taxation was understated.
	 
	11.4	 	Stamp Duty.
	 
	(a)	 	All documents that are in the possession of the Company or under its control or to which the
Company is a party and that attract stamp duty have been properly stamped, and the Company has
duly paid all stamp duty to which they are, have been or may be made liable, and there is no
liability for any penalty in respect of such duty nor, to the Vendor’s knowledge, are there
any circumstances or transactions to which the Company is or has been a party, which may
result in the Company becoming liable for any such penalty.
	 
	11.5	 	U.S. Tax Classification. The Company is not classified for United States federal income tax
purposes as a disregarded entity pursuant to Treas. Reg. Section 301.7701-3.
	 
	12	 	MISCELLANEOUS
	 
	12.1	 	No broker’s fees. No one is entitled to receive from the Company any finder’s fee,
brokerage, or other commission in connection with the purchase of the Interest.
	 
	12.2	 	Effect of entering into this Agreement. Compliance with the terms of this Agreement or
Closing does not and will not:
	 
	(a)	 	conflict with or result in the breach of or constitute a default under any of the terms,
conditions or provisions of:

	 	(i)	 	any agreement or instrument to which the Company is now a party, including
the Contracts; or

27

 

	 	(ii)	 	the Company’s Limited Liability Agreement or give rise to or cause to become
exercisable any right of pre-emption or right of first refusal; or
	 
	 	(iii)	 	any loan to or mortgage created by the Company or any lien, lease, order,
judgment, award, injunction, decree, ordinance or regulation or any other restriction
of any kind or character to which any property of the Company is subject or by which
the Company is bound;

	(b)	 	result in any present or future Indebtedness becoming due or capable of becoming due and
payable prior to its stated maturity;
	 
	(c)	 	relieve any other party to an agreement or arrangement with the Company, including the
Contracts, of its obligations thereunder (whether contractual or otherwise) or enable it to
vary or terminate its rights or obligations thereunder or determine any right or benefit
enjoyed by the Company or to exercise any right, whether under an agreement with, or otherwise
in respect of, the Company;
	 
	(d)	 	result in the creation or imposition of any Security Interest on any assets of the Company;
	 
	(e)	 	cause the Company to lose the benefit of any right or privilege either of them presently
enjoys;
	 
	(f)	 	cause any person who normally does business with the Company not to continue to do so on the
same basis as previously; or
	 
	(g)	 	cause any licence or authority necessary or desirable for the continuation of the Company’s
respective business to be determined or not renewed or continued or renewed on less favourable
terms.
	 
	12.3	 	Accurate information provided. All information given by the Vendor or any Vendor Group
Companies or officials or professional advisers of the Company or the Vendor to any of the
directors, officials or professional advisers of the Purchaser in the course of negotiations
leading to this Agreement, taken as a whole, was, when given, and remains and will at Closing
be true and accurate in all material respects, and there is no matter or fact that has not
been disclosed to the Purchaser that renders any such information untrue or misleading in any
material respect.
	 
	12.4	 	Disclosure Schedule etc accurate. All information contained in the Disclosure Schedule is
true, complete and accurate in all respects and nothing has been omitted and, there is no
matter or fact, which renders any such information untrue, inaccurate, incomplete or
misleading in any material respect.
	 
	12.5	 	All information disclosed. All information relating to the Company that the Vendor knows or
should reasonably know and that is material to be known by the Purchaser in the context of the
sale of the Interest has been disclosed to the Purchaser and, to the best of the knowledge,
information and belief of the Vendor, there are no other facts or matters undisclosed to the
Purchaser that could reasonably be expected to have a material adverse effect on the Company
or the Interest.

28

 

	13	 	INSOLVENCY
	 
	13.1	 	No Insolvency event. No Insolvency Event has occurred in relation to the Company and no
events or circumstances have arisen that entitle or could entitle any person to take any
action, appoint any person, commence proceedings or obtain any order instigating an Insolvency
Event.
	 
	14	 	THE VESSEL
	 
	14.1	 	Vessel Commitments. In relation to the Vessel:

	 	(i)	 	the Vessel is properly registered in the name of the Company under and pursuant
to the flag and law of the Bahamas and all fees due and payable in connection with such
registration have been paid;
	 
	 	(ii)	 	the Vessel is entered with ABS (or another classification society of like
standing) and has the highest classification rating issued by such society for a vessel
of the type, age and class of the Vessel;
	 
	 	(iii)	 	the Vessel is in class without any recommendations or notation as to class or
other requirement of the relevant classification society, and if the Vessel is in a
port, it is in such condition that it can not be detached by any port state authority
or the flag state authority for any deficiency;
	 
	 	(iv)	 	the Vessel is owned free of all maritime liens, encumbrances and mortgages
except those that have been Disclosed in the Disclosure Schedule and accepted by the
Purchaser and the terms of any charters that continue beyond the Closing Date,
mortgages and loan documents do not prohibit the sale of the Company;
	 
	 	(v)	 	the Vessel has been maintained in a proper and efficient manner in accordance
with internationally accepted standards for good ship maintenance, is in good operating
order, condition and repair and is seaworthy and all repairs made to the Vessel during
the last two years and all known scheduled repairs due to be made and all know
deficiencies have been Disclosed in the Disclosure Schedule;
	 
	 	(vi)	 	the Vessel is not (i) under arrest or otherwise detained, (ii) other than in
the ordinary course of business, in the possession of any person (other than her master
and crew) or subject to a possessory lien; or (iii) other than in the ordinary course
of business, subject to any other lien;
	 
	 	(vii)	 	the Vessel complies in all material respects with all laws, the requirements
of any government agency having jurisdiction over the Vessel, the provisions of all
international conventions and the provisions of the rules and regulations issued under
international conventions applicable to that Vessel;
	 
	 	(viii)	 	the Vessel is supplied with valid and up-to-date safety, safety construction, safety
equipment, radio, loadline, health, tonnage, trading and other certificates or
documents as may for the time being be prescribed by the law of the flag of the Vessel
or of any other pertinent jurisdiction, or that would otherwise be deemed

29

 

	 	 	 	necessary by a shipowner acting in accordance with internationally accepted
standards for good ship management and operations;
	 
	 	(ix)	 	The Vessel has been delivered by the Company to and accepted on an
unconditional basis by the Charterer for service under and in accordance with the terms
and conditions of the Charter; and
	 
	 	(x)	 	no blacklisting or boycotting of any description whatsoever has been applied or
currently exists against or in respect of the Vessel.

30

 

SCHEDULE B

THE VESSEL

	 	 	 
	Vessel	 	“DAMPIER SPIRIT”
	Built

	 	 1987
	 
	Yard

	 	Hyundai
	 
	Class

	 	ABS
	 
	Flag

	 	Bahamas
	 
	Place of Registration

	 	Nassau
	 
	Call sign

	 	C6PN4
	 
	IMO (Registration) No.

	 	 8613748
	 
	Grt/Nrt

	 	 59289/35989

31

 

DISCLOSURE SCHEDULE

	1.	 	Revised Contract (Including Time Charter) in respect of the Vessel made between the
Company and Apache Energy Ltd.
	 
	2.	 	Actions by Written Consent of the Company.
	 
	3.	 	Powers of Attorney Resolutions passed by the Company.
	 
	4.	 	List of insurance policies in effect to be provided:.
	 
	5.	 	Ship Management Agreement between the Company and Teekay Marine Pty Ltd.
	 
	6.	 	Balance Sheet of the Company as at December 31, 2006.

32

 

	 	 	 
	Execution Page
	 	 
	 
	 
	 	 
	Executed as an agreement
	 	 
	 
	 	 
	SIGNED by TEEKAY CORPORATION in
accordance with its constituent documents:

	 
	 

Signature of Authorised Representative

	 	 
	 
	 	 
	SIGNED by TEEKAY AUSTRALIA OFFSHORE
HOLDINGS PTY LTD (ACN 127 139 486) by two
Directors or a Director and Secretary in
accordance with s.127 of the Corporations
Act 2001:
	 	 
	 
	 

	 	 
	Signature of Director

	 	Signature of Director/Secretary
	 
	 

	 	 
	Print Name of Director

	 	Print Name of Director

Purchase
Aggreement

33

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