Amendment No. One to Form F-3
As filed with the Securities and Exchange Commission on
May 16, 2008
Registration Statement
No. 333-150682
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Amendment No. 1
TO
FORM F-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF
1933
TEEKAY OFFSHORE PARTNERS
L.P.
(Exact name of Registrant as
specified in its charter)
|
|
|
|
|
Republic of the Marshall Islands
|
|
4400
|
|
98-051255
|
(State or other jurisdiction
of
incorporation or organization)
|
|
(Primary Standard Industrial
Classification Code Number)
|
|
(I.R.S. Employer
Identification Number)
|
4th floor, Belvedere
Building,
69 Pitts Bay Road,
Hamilton HM 08,
Bermuda
Telephone: (441)
298-2530
Fax:
(441) 292-3931
(Address, including zip code,
and telephone number,
including area code, of
Registrants principal executive office)
Watson, Farley &
Williams (New York) LLP
Attention: Daniel C.
Rodgers
100 Park Avenue, 31st
Floor
New York, New York
10017
(212) 922-2200
(Name, address, including zip
code, and telephone number,
including area code, of agent
for service)
Copy to:
David S. Matheson
Perkins Coie LLP
1120 N.W. Couch Street, Tenth
Floor
Portland, OR
97209-4128
(503) 727-2008
Approximate date of commencement
of proposed sale to the
public: From time to
time after this registration statement becomes effective, as
determined by market conditions.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following
box. o
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, check the
following
box. þ
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same
offering. o
If this Form is a registration statement pursuant to General
Instruction I.D. or a post-effective amendment thereto that
shall become effective upon filing with the Commission pursuant
to Rule 462(e) under the Securities Act, check the
following
box. o
If this Form is a post-effective amendment to a registration
statement filed pursuant to General Instruction I.D. filed
to register additional securities or additional classes of
securities pursuant to Rule 413(b) under the Securities
Act, check the following
box. o
If this Form is a post-effective amendment filed pursuant to
Rule 462(e) under the Securities Act, check the following
box and list the Securities Act registration statement number of
the earlier effective registration statement for the same
offering. o
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following
box. o
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
PROSPECTUS
$750,000,000
Teekay Offshore Partners
L.P.
Common Units
We may offer from time to time common units, which represent
limited partnership interests in Teekay Offshore Partners L.P.
The common units we may offer will have a maximum aggregate
offering price of $750,000,000 and will be offered at prices and
on terms to be set forth in one or more accompanying prospectus
supplements.
We may offer these securities directly or to or through
underwriters, dealers or other agents. The names of any
underwriters or dealers will be set forth in the applicable
prospectus supplement. Our common units are traded on the New
York Stock Exchange under the symbol TOO.
This prospectus provides you with a general description of the
securities we may offer. Each time we offer to sell securities
we will provide a prospectus supplement that will contain
specific information about those securities and the terms of
that offering. The prospectus supplement may also add, update or
change information contained in this prospectus. This prospectus
may be used to offer and sell securities only if accompanied by
a prospectus supplement. You should read this prospectus and any
prospectus supplement carefully before you invest. You should
also read the documents we refer to in the Where You Can
Find More Information and Incorporation of Documents
by Reference sections of this prospectus for information
about us and our financial statements.
Limited partnerships are inherently different than
corporations. You should carefully consider each of the factors
described or referred to under Risk Factors
beginning on page 8 of this prospectus before you make an
investment in our securities.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
May 16, 2008
TABLE OF
CONTENTS
|
|
|
|
|
|
|
Page
|
|
|
|
|
1
|
|
|
|
|
2
|
|
|
|
|
2
|
|
|
|
|
4
|
|
|
|
|
4
|
|
|
|
|
6
|
|
|
|
|
8
|
|
|
|
|
8
|
|
|
|
|
12
|
|
|
|
|
15
|
|
|
|
|
16
|
|
|
|
|
17
|
|
|
|
|
18
|
|
|
|
|
18
|
|
|
|
|
18
|
|
|
|
|
18
|
|
|
|
|
20
|
|
|
|
|
20
|
|
|
|
|
20
|
|
|
|
|
20
|
|
|
|
|
21
|
|
|
|
|
21
|
|
|
|
|
22
|
|
|
|
|
22
|
|
|
|
|
22
|
|
|
|
|
25
|
|
|
|
|
27
|
|
|
|
|
27
|
|
|
|
|
27
|
|
|
|
|
28
|
|
|
|
|
28
|
|
|
|
|
29
|
|
|
|
|
29
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
31
|
|
|
|
|
34
|
|
|
|
|
34
|
|
|
|
|
35
|
|
|
|
|
35
|
|
|
|
|
35
|
|
|
|
|
38
|
|
-i-
You should rely only on the information contained in this
prospectus, any prospectus supplement and the documents
incorporated by reference in this prospectus. We have not
authorized anyone else to give you different information. If
anyone provides you with different or inconsistent information,
you should not rely on it. We are not offering these securities
in any jurisdiction where the offer or sale is not permitted.
You should not assume that the information in this prospectus or
any prospectus supplement is accurate as of any date other than
the date on the front of those documents. We will disclose
material changes in our affairs in an amendment to this
prospectus, a prospectus supplement or a future filing with the
U.S. Securities and Exchange Commission (or
SEC ) incorporated by reference in this prospectus.
-ii-
ABOUT
THIS PROSPECTUS
This prospectus is part of a registration statement on
Form F-3
that we have filed with the SEC using a shelf
registration process. Under this shelf registration process, we
may sell, in one or more offerings, up to $750,000,000 in total
aggregate offering price of the securities described in this
prospectus. This prospectus generally describes us and the
securities we may offer. Each time we offer securities with this
prospectus, we will provide this prospectus and a prospectus
supplement that will describe, among other things, the specific
amounts and prices of the securities being offered and the terms
of the offering. The prospectus supplement may also add to,
update or change information in this prospectus. If there is any
inconsistency between the information in this prospectus and any
prospectus supplement, you should rely on the information in the
prospectus supplement.
Unless otherwise indicated, references in this prospectus to
Teekay Offshore Partners, we,
us and our and similar terms refer to
Teekay Offshore Partners L.P.
and/or one
or more of its subsidiaries (including Teekay Offshore Operating
L.P.), except that those terms, when used in this prospectus in
connection with the common units described herein, shall mean
specifically Teekay Offshore Partners L.P. References in this
prospectus to Teekay Corporation refer to Teekay
Corporation
and/or any
one or more of its subsidiaries.
Unless otherwise indicated, all references in this prospectus to
dollars and $ are to, and amounts are
presented in, U.S. Dollars, and financial information
presented in this prospectus is prepared in accordance with
accounting principles generally accepted in the United States
(or GAAP).
The information in this prospectus is accurate as of its date.
You should read carefully this prospectus, any prospectus
supplement, and the additional information described below under
the headings Where You Can Find More Information and
Incorporation of Documents by Reference.
1
TEEKAY
OFFSHORE PARTNERS L.P.
Teekay Offshore Partners L.P. is an international provider of
marine transportation and storage services to the offshore oil
industry. We were formed in August 2006 by Teekay Corporation
(NYSE:TK), a leading provider of marine services to the global
oil and gas industries, to further develop its operations in the
offshore market. Our growth strategy focuses on expanding our
fleet of shuttle tankers and floating storage and offtake (or
FSO) units under long-term, fixed-rate time charters. We
intend to continue our practice of acquiring shuttle tankers and
FSO units as needed for approved projects only after the
long-term charters for the projects have been awarded to us,
rather than ordering vessels on a speculative basis. We intend
to follow this same practice in acquiring floating production,
storage and offloading (or FPSO) units, which produce and
process oil offshore in addition to providing storage and
offloading capabilities. We may enter into joint ventures and
partnerships with companies that may provide increased access to
opportunities emerging from the global expansion of the offshore
transportation, storage and production sectors, or we may engage
in vessel or business acquisitions. We seek to leverage the
expertise, relationships and reputation of Teekay Corporation
and its affiliates to pursue these growth opportunities in the
offshore sectors and may consider other opportunities to which
our competitive strengths are well suited. Teekay Corporation
owns and controls our general partner and currently owns a 57.8%
limited partner interest in us.
Our assets include, among others, a 26.0% interest in Teekay
Offshore Operating L.P. (or OPCO), which owns and
operates the worlds largest fleet of shuttle tankers, in
addition to FSO units and conventional oil tankers. We control
OPCO through our ownership of its general partner and Teekay
Corporation owns the remaining 74.0% interest in OPCO. We
believe that Teekay Corporation will offer us the opportunity to
acquire additional limited partner interests in OPCO in the
future.
Our
Fleet and Potential Additional Offshore Project Opportunities
From Teekay Corporation
As of April 30, 2008, our fleet consisted of: 38 shuttle
tankers, 25 of which are owned by OPCO (including five through
50%-controlled joint ventures), 11 of which are chartered-in by
OPCO, and 2 or which are owned by us (including one through a
50%-controlled joint venture); 5 FSO units, four of which are
owned by OPCO; and 9 Aframax-class conventional crude oil
tankers, all of which are owned by OPCO. All of these vessels
operate under fixed-rate contracts or, for some of our shuttle
tankers, under contracts of affreightment where payments are
based upon the volume of oil transported. Our fleet consists of
double-hull vessels, other than two FSO units.
Pursuant to an omnibus agreement we entered into in connection
with our initial public offering in December 2006, Teekay
Corporation is obligated to offer us shuttle tankers, FSO units,
and FPSO units it may acquire in the future if the vessels are
servicing contracts with terms in excess of three years.
Teekay Corporation has ordered four Aframax shuttle tanker
newbuildings that are scheduled to deliver in 2010 and 2011, for
a total delivered cost of approximately $485.0 million.
These vessels will be offered to us pursuant to the omnibus
agreement and, if we acquire them, we anticipate they will be
used to service either new long-term, fixed-rate contracts
Teekay Corporation may be awarded prior to vessel delivery or
OPCOs contracts of affreightment in the North Sea.
The omnibus agreement also obligates Teekay Corporation to offer
to us (a) its interest in future FPSO and FSO projects it
may undertake through its 50%-owned joint venture with Teekay
Petrojarl ASA, one of the largest independent FPSO operators,
and (b) if Teekay Corporation obtains 100% ownership of
Teekay Petrojarl ASA, the existing FPSO units owned by Teekay
Petrojarl ASA that are servicing contracts in excess of three
years in length. As of April 30, 2008, Teekay Corporation
owned 65% of Teekay Petrojarl ASA, which owns four FPSO units.
Partnership
Structure and Management
Our operations are conducted through, and our operating assets
are owned by, our subsidiaries, including OPCO. Our subsidiary,
Teekay Offshore Operating GP L.L.C., a Marshall Islands limited
liability company, is OPCOs general partner and manages
OPCOs operations and activities. Our general partner,
Teekay Offshore
2
GP L.L.C., a Marshall Islands limited liability company, has an
economic interest in us and manages our operations and
activities. Our general partner does not receive any management
fee or other compensation in connection with its management of
our business, but it is entitled to be reimbursed for all direct
and indirect expenses incurred on our behalf. Pursuant to
services agreements between us, OPCO and our and its
subsidiaries, on the one hand, and other subsidiaries of Teekay
Corporation, on the other hand, the Teekay Corporation
subsidiaries provide to us and OPCO substantially all of our and
its administrative services and to our and OPCOs
subsidiaries substantially all of their strategic consulting,
advisory, ship management, technical and administrative services.
We are a limited partnership organized under the laws of the
Republic of The Marshall Islands. Our principal executive
offices are located at 4th floor, Belvedere Building, 69
Pitts Bay Road, Hamilton HM 08, Bermuda, and our phone number is
(441) 298-2530.
Our principal operating office is located at Suite 2000,
Bentall 5, 550 Burrard Street, Vancouver, British Columbia,
Canada, V6C 2K2, and our telephone number at such address is
(604) 683-3529.
3
WHERE YOU
CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement on
Form F-3
regarding the securities covered by this prospectus. This
prospectus does not contain all of the information found in the
registration statement. For further information regarding us and
the securities offered in this prospectus, you may wish to
review the full registration statement, including its exhibits.
The registration statement, including the exhibits, may be
inspected and copied at the public reference facilities
maintained by the SEC at 100 F Street, NE,
Washington, D.C. 20549. Copies of this material can also be
obtained upon written request from the Public Reference Section
of the SEC at 100 F Street, NE, Washington, D.C.
20549, at prescribed rates or from the SECs web site on
the Internet at www.sec.gov free of charge. Please call
the SEC at
1-800-SEC-0330
for further information on public reference rooms. Our
registration statement can also be inspected and copied at the
offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
We are subject to the information requirements of the Securities
Exchange Act of 1934 (or the Exchange Act), and, in
accordance therewith, we are required to file with the SEC
annual reports on
Form 20-F
within six months of our fiscal year-end, and provide to the SEC
other material information on
Form 6-K.
We intend to file our annual reports on
Form 20-F
earlier than the SEC currently requires. These reports and other
information may be inspected and copied at the public reference
facilities maintained by the SEC or obtained from the SECs
website as provided above. Our website on the Internet is
located at www.teekayoffshore.com, and we expect to make
our periodic reports and other information filed with or
furnished to the SEC available, free of charge, through our
website, as soon as reasonably practicable after those reports
and other information are electronically filed with or furnished
to the SEC. Information on our website or any other website is
not incorporated by reference into this prospectus and does not
constitute a part of this prospectus.
As a foreign private issuer, we are exempt under the Securities
Exchange Act from, among other things, certain rules prescribing
the furnishing and content of proxy statements, and our
executive officers, directors and principal unitholders are
exempt from the reporting and short-swing profit recovery
provisions contained in Section 16 of the Exchange Act. In
addition, we are not required under the Exchange Act to file
periodic reports and financial statements with the SEC as
frequently or as promptly as U.S. companies whose
securities are registered under the Exchange Act, including the
filing of quarterly reports or current reports on
Form 8-K.
However, we intend to make available quarterly reports
containing our unaudited interim financial information for the
first three fiscal quarters of each fiscal year.
INCORPORATION
OF DOCUMENTS BY REFERENCE
The SEC allows us to incorporate by reference into
this prospectus information that we file with the SEC. This
means that we can disclose important information to you without
actually including the specific information in this prospectus
by referring you to other documents filed separately with the
SEC. The information incorporated by reference is an important
part of this prospectus. Information that we later provide to
the SEC, and which is deemed to be filed with the
SEC, automatically will update information previously filed with
the SEC, and may replace information in this prospectus.
We incorporate by reference into this prospectus the documents
listed below:
|
|
|
|
|
Our Annual Report on
Form 20-F
for the fiscal year ended December 31, 2007;
|
|
|
|
all subsequent Annual Reports on
Form 20-F
filed prior to the termination of this offering;
|
|
|
|
all subsequent Reports on
Form 6-K
filed prior to the termination of this offering that we identify
in such Reports as being incorporated by reference into the
registration statement of which this prospectus is a
part; and
|
|
|
|
the description of our common units contained in our
Registration Statement on Form
8-A/A filed
on May 6, 2008, including any subsequent amendments or
reports filed for the purpose of updating such description.
|
4
These reports contain important information about us, our
financial condition and our results of operations.
You may obtain any of the documents incorporated by reference in
this prospectus from the SEC through its public reference
facilities or its website at the addresses provided above. You
also may request a copy of any document incorporated by
reference in this prospectus (excluding any exhibits to those
documents, unless the exhibit is specifically incorporated by
reference in this document), at no cost, by visiting our
internet website at www.teekayoffshore.com, or by writing
or calling us at the following address:
Teekay Offshore Partners, L.P.
4th floor, Belvedere Building,
69 Pitts Bay Road
Hamilton HM 08, Bermuda Attn: Corporate Secretary
(441) 298-2530
You should rely only on the information incorporated by
reference or provided in this prospectus or any prospectus
supplement. We have not authorized anyone else to provide you
with any information. You should not assume that the information
incorporated by reference or provided in this prospectus or any
prospectus supplement is accurate as of any date other than the
date on the front of each document.
5
FORWARD-LOOKING
STATEMENTS
All statements, other than statements of historical fact,
included in or incorporated by reference into this prospectus
and any prospectus supplements are forward-looking statements.
In addition, we and our representatives may from time to time
make other oral or written statements that also forward-looking
statements. Such statements include, in particular, statements
about our plans, strategies, business prospects, changes and
trends in our business, and the markets in which we operate. In
some cases, you can identify the forward-looking statements by
the use of words such as may, will,
could, should, would,
expect, plan, anticipate,
intend, forecast, believe,
estimate, predict, propose,
potential, continue or the negative of
these terms or other comparable terminology.
Forward-looking statements include statements with respect to,
among other things:
|
|
|
|
|
our ability to make cash distributions on our units or any
increases in our quarterly distributions;
|
|
|
|
our future financial condition or results of operations and
future revenues and expenses;
|
|
|
|
the repayment of debt;
|
|
|
|
expected compliance with financing agreements and the expected
effect of restrictive covenants in such agreements;
|
|
|
|
growth prospects of the offshore and tanker markets;
|
|
|
|
offshore and tanker market fundamentals, including the balance
of supply and demand in the offshore and tanker market;
|
|
|
|
the expected lifespan of a new shuttle tanker, floating storage
and off-take (or FSO) unit and conventional tanker;
|
|
|
|
future capital expenditures and the availability of capital
resources to fund capital expenditures;
|
|
|
|
our ability to maintain long-term relationships with major crude
oil companies;
|
|
|
|
our ability to leverage to our advantage Teekay
Corporations relationships and reputation in the shipping
industry;
|
|
|
|
our continued ability to enter into fixed-rate charters with
customers;
|
|
|
|
obtaining offshore projects that we or Teekay Corporation bid on
or that Teekay Corporation is awarded;
|
|
|
|
our ability to maximize the use of our vessels, including the
re-deployment or disposition of vessels no longer under
long-term time charter;
|
|
|
|
the ability of counterparties to our derivative contracts to
fulfill their contractual obligations;
|
|
|
|
our pursuit of strategic opportunities, including the
acquisition of vessels and expansion into new markets;
|
|
|
|
delivery dates and financing for newbuildings;
|
|
|
|
the commencement of service of newbuildings under long-term
contracts;
|
|
|
|
the ability to compete successfully for future chartering and
newbuilding opportunities;
|
|
|
|
our expected financial flexibility to pursue acquisitions and
other expansion opportunities;
|
|
|
|
anticipated funds for liquidity needs and the sufficiency of
cash flows;
|
|
|
|
the expected cost of, and our ability to comply with,
governmental regulations and maritime self-regulatory
organization standards applicable to our business;
|
|
|
|
the expected impact of heightened environmental and quality
concerns of insurance underwriters, regulators and charterers;
|
6
|
|
|
|
|
Teekay Corporation increasing its ownership interest in Teekay
Petrojarl ASA (formerly Petrojarl ASA) or offering us additional
interests in OPCO;
|
|
|
|
our general and administrative expenses as a public company and
expenses under service agreements with other affiliates of
Teekay Corporation and for reimbursements of fees and costs of
our general partner;
|
|
|
|
the anticipated taxation of our partnership and its subsidiaries
and distributions to our unitholders, including our estimate of
the percentage of our distributions that will constitute
dividends;
|
|
|
|
our exposure to foreign currency fluctuations, particularly in
Norwegian Kroner; and
|
|
|
|
our business strategy and other plans and objectives for future
operations.
|
These and other forward-looking statements are subject to the
risks, uncertainties and assumptions, including those risks
discussed in Risk Factors below and those risks
discussed in other reports we file with the SEC and that are
incorporated in this prospectus by reference. The risks,
uncertainties and assumptions involve known and unknown risks
and are inherently subject to significant uncertainties and
contingencies, many of which are beyond our control.
Forward-looking statements are made based upon managements
current plans, expectations, estimates, assumptions and beliefs
concerning future events impacting us and, therefore, involve a
number of risks and uncertainties, including those risks
discussed in Risk Factors. We caution that
forward-looking statements are not guarantees and that actual
results could differ materially from those expressed or implied
in the forward-looking statements.
We undertake no obligation to update any forward-looking
statement or statements to reflect events or circumstances after
the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time
to time, and it is not possible for us to predict all of these
factors. Further, we cannot assess the impact of each such
factor on our business or the extent to which any factor, or
combination of factors, may cause actual results to be
materially different from those contained in any forward-looking
statement.
7
RISK
FACTORS
Although many of our business risks are comparable to those
of a corporation engaged in a similar business, limited partner
interests are inherently different from the capital stock of a
corporation. When evaluating an investment in our common units,
you should carefully consider the following risk factors
together with all other information included in this prospectus,
including those risks discussed under the caption Risk
Factors in our latest Annual Report on
Form 20-F
filed with the SEC, which are incorporated by reference into
this prospectus, and information included in any applicable
prospectus supplement.
If any of the risks actually occur, our business, financial
condition, operating results or cash flows could be materially
adversely affected. In that case, we might be unable to pay
distributions on our common units, the trading price of our
common units could decline, and you could lose all or part of
your investment.
Risks
Inherent in an Investment in Us
Our
partnership agreement limits our general partners
fiduciary duties to our unitholders and restricts the remedies
available to unitholders for actions taken by our general
partner.
Our partnership agreement contains provisions that reduce the
standards to which our general partner would otherwise be held
by Marshall Islands law. For example, our partnership agreement:
|
|
|
|
|
permits our general partner to make a number of decisions in its
individual capacity, as opposed to in its capacity as our
general partner. Where our partnership agreement permits, our
general partner may consider only the interests and factors that
it desires, and in such cases it has no duty or obligation to
give any consideration to any interest of, or factors affecting
us, our affiliates or our unitholders. Decisions made by our
general partner in its individual capacity are made by its sole
owner, Teekay Corporation, and not by the board of directors of
our general partner. Examples include the exercise of its call
right, its voting rights with respect to the units it owns, its
registration rights and its determination whether to consent to
any merger or consolidation of the partnership;
|
|
|
|
provides that our general partner is entitled to make other
decisions in good faith if it reasonably believes
that the decision is in our best interests;
|
|
|
|
generally provides that affiliated transactions and resolutions
of conflicts of interest not approved by the conflicts committee
of the board of directors of our general partner and not
involving a vote of unitholders must be on terms no less
favorable to us than those generally being provided to or
available from unrelated third parties or be fair and
reasonable to us and that, in determining whether a
transaction or resolution is fair and reasonable,
our general partner may consider the totality of the
relationships between the parties involved, including other
transactions that may be particularly favorable or advantageous
to us; and
|
|
|
|
provides that our general partner and its officers and directors
will not be liable for monetary damages to us or our limited
partners for any acts or omissions unless there has been a final
and non-appealable judgment entered by a court of competent
jurisdiction determining that the general partner or those other
persons acted in bad faith or engaged in fraud, willful
misconduct or gross negligence.
|
In order to become a limited partner of our partnership, a
common unitholder agrees to be bound by the provisions in the
partnership agreement, including the provisions discussed above.
Fees
and cost reimbursements, which our general partner determines
for services provided to us, are substantial and reduce our cash
available for distribution to you.
Prior to making any distribution on the common units, we and
OPCO pay fees for services provided to us, OPCO and our and its
operating subsidiaries by certain subsidiaries of Teekay
Corporation, and we reimburse our general partner for all
expenses it incurs on our behalf. These fees are negotiated on
our behalf by our general partner, and our general partner also
determines the amounts it is reimbursed. These fees and expenses
include all costs incurred in providing certain administrative
services to us and OPCO and certain advisory, ship management,
technical and administrative services to our and OPCOs
operating subsidiaries,
8
including services rendered to us pursuant to certain advisory
and administrative services agreements. The payment of fees to
Teekay Corporation and reimbursement of expenses to our general
partner could adversely affect our ability to pay cash
distributions to you.
Our
general partner, which is owned and controlled by Teekay
Corporation, makes all decisions on our behalf, subject to the
limited voting rights of our common unitholders. Even if public
unitholders are dissatisfied, they cannot remove our general
partner without Teekay Corporations consent.
Unlike the holders of common stock in a corporation, unitholders
have only limited voting rights on matters affecting our
business and, therefore, limited ability to influence
managements decisions regarding our business. Unitholders
did not elect our general partner or its board of directors and
have no right to elect our general partner or its board of
directors on an annual or other continuing basis. Teekay
Corporation, which owns and controls our general partner,
appoints our general partners board of directors, which in
turn appoints the board of directors of OPCOs general
partner. Our general partner makes all decisions on our behalf.
If the unitholders are dissatisfied with the performance of our
general partner, they have little ability to remove our general
partner. As a result of these limitations, the price at which
the common units trade could be diminished because of the
absence or reduction of a takeover premium in the trading price.
The vote of the holders of at least
66-2/3%
of all outstanding units, voting together as a single class, is
required to remove our general partner. Teekay Corporation
currently owns 58.9% of the units. Also, if our general partner
is removed without cause during the subordination
period and no units held by our general partner and Teekay
Corporation are voted in favor of that removal, all remaining
subordinated units (which are held by Teekay Corporation) will
automatically convert into common units and any existing
arrearages on the common units will be extinguished. A removal
of our general partner under these circumstances would adversely
affect the common units by prematurely eliminating their
distribution and liquidation preference over the subordinated
units, which would otherwise have continued until we had met
certain distribution and performance tests. Cause is
narrowly defined to mean that a court of competent jurisdiction
has entered a final, non-appealable judgment finding our general
partner liable for actual fraud or willful or wanton misconduct
in its capacity as our general partner. Cause does not include
most cases of charges of poor management of the business.
In addition, unitholders voting rights are further
restricted by our partnership agreement provision providing that
any units held by a person that owns 20.0% or more of any class
of units then outstanding, other than our general partner, its
affiliates, their transferees, and persons who acquired such
units with the prior approval of the board of directors of our
general partner, cannot vote on any matter. Our partnership
agreement also contains provisions limiting the ability of
unitholders to call meetings or to acquire information about our
operations, as well as other provisions limiting the
unitholders ability to influence the manner or direction
of management.
The
control of our general partner may be transferred to a third
party without unitholder consent.
Our general partner may transfer its general partner interest to
a third party in a merger or in a sale of all or substantially
all of its assets without the consent of the unitholders. In
addition, our partnership agreement does not restrict the
ability of the members of our general partner from transferring
their respective membership interests in our general partner to
a third party. In the event of any such transfer, the new
members of our general partner would be in a position to replace
the board of directors and officers of our general partner with
their own choices and to control the decisions taken by the
board of directors and officers.
If we
cease to control OPCO, we may be deemed to be an investment
company under the Investment Company Act of 1940.
If we cease to manage and control OPCO and are deemed to be an
investment company under the U.S. Investment Company Act of
1940 because of our ownership of OPCO partnership interests, we
would either have to register as an investment company under the
Investment Company Act, obtain exemptive relief
9
from the SEC or modify our organizational structure or our
contract rights to fall outside the definition of an investment
company. Registering as an investment company could, among other
things, materially limit our ability to engage in transactions
with affiliates, including the purchase and sale of certain
securities or other property to or from our affiliates, restrict
our ability to borrow funds or engage in other transactions
involving leverage, and require us to add additional directors
who are independent of us or our affiliates.
Common
unitholders may experience immediate and substantial dilution of
their interest.
In the past, purchasers of our common units have experienced
immediate and substantial dilution of their ownership interest
in us. This dilution results primarily because the assets
contributed by our general partner and its affiliates in
connection with our initial public offering are recorded at
their historical cost, and not their fair value, in accordance
with GAAP. Depending on whether the offering price for any
common units exceeds the pro forma net tangible book value per
common unit, you could incur immediate and substantial dilution.
We may
issue additional equity securities without your approval, which
would dilute your ownership interests.
Our general partner, without the approval of our unitholders,
may cause us to issue an unlimited number of additional units or
other equity securities.
The issuance by us of additional common units or other equity
securities will have the following effects:
|
|
|
|
|
our unitholders proportionate ownership interest in us
will decrease;
|
|
|
|
the amount of cash available for distribution on each unit may
decrease;
|
|
|
|
because a lower percentage of total outstanding units will be
subordinated units, the risk that a shortfall in the payment of
the minimum quarterly distribution will be borne by our common
unitholders will increase;
|
|
|
|
the relative voting strength of each previously outstanding unit
may be diminished; and
|
|
|
|
the market price of the common units may decline.
|
In
establishing cash reserves, our general partner may reduce the
amount of cash available for distribution to you.
OPCOs partnership agreement provides that the board of
directors of our general partner, on our behalf, approves the
amount of reserves from OPCOs cash flow that is retained
by OPCO to fund its future operating expenditures. Our
partnership agreement requires our general partner to deduct
from our operating surplus cash reserves that it determines are
necessary to fund our future operating expenditures. These
reserves affect the amount of cash available for distribution by
OPCO to us and by us to our unitholders. In addition, our
general partner may establish reserves for distributions on the
subordinated units, but only if those reserves will not prevent
us from distributing the full minimum quarterly distribution,
plus any arrearages, on our common units for the following four
quarters. Furthermore, our partnership agreement requires our
general partner each quarter to deduct from operating surplus
estimated maintenance capital expenditures, as opposed to actual
expenditures, which could reduce the amount of available cash
for distribution.
Our
general partner has a call right that may require you to sell
your common units at an undesirable time or price.
If at any time our general partner and its affiliates own more
than 80.0% of the common units, our general partner has the
right, which it may assign to any of its affiliates or to us,
but not the obligation, to acquire all, but not less than all,
of the common units held by unaffiliated persons at a price not
less than their then-current market price as determined in
accordance with our partnership agreement. As a result, you may
be required to sell your common units at an undesirable time or
price and may not receive any return on your investment. You may
also incur a tax liability upon a sale of your units.
10
Teekay Corporation, an affiliate of our general partner,
currently owns approximately 17.9% of the common units. At the
end of the subordination period applicable to our subordinated
units, and assuming no additional issuances of common units and
conversion of our subordinated units into common units, Teekay
Corporation will own approximately 58.9% of the common units.
Teekay Corporation may acquire additional common units from us
in connection with future transactions or through open-market or
negotiated purchases.
Our
partnership agreement restricts the voting rights of unitholders
owning 20% or more of our common units.
Our partnership agreement restricts unitholders voting
rights by providing that any units held by a person that owns
20.0% or more of any class of units then outstanding, other than
our general partner, its affiliates, their transferees and
persons who acquired such units with the prior approval of the
board of directors of our general partner, cannot vote on any
matter. The partnership agreement also contains provisions
limiting the ability of unitholders to call meetings or to
acquire information about our operations, as well as other
provisions limiting the unitholders ability to influence
the manner or direction of management.
You
may not have limited liability if a court finds that unitholder
action constitutes control of our business.
As a limited partner in a partnership organized under the laws
of the Republic of The Marshall Islands, you could be held
liable for our obligations to the same extent as a general
partner if you participate in the control of our
business. Our general partner generally has unlimited liability
for the obligations of the partnership, such as its debts and
environmental liabilities, except for those contractual
obligations of the partnership that are expressly made without
recourse to our general partner. In addition, the Marshall
Islands Limited Partnership Act (or the Marshall Islands
Act) provides that a unitholder may be liable to us for the
amount of a distribution for a period of three years from the
date of the distribution, as described below under
Unitholders may have liability to repay
distributions. In addition, the limitations on the
liability of holders of limited partner interests for the
obligations of a limited partnership have not been clearly
established in some jurisdictions in which we do business.
We can
borrow money to pay distributions, which would reduce the amount
of credit available to operate our business.
Our partnership agreement allows us to make working capital
borrowings to pay distributions. Accordingly, we can make
distributions on all our units even though cash generated by our
operations may not be sufficient to pay such distributions. Any
working capital borrowings by us to make distributions will
reduce the amount of working capital borrowings we can make for
operating our business.
Increases
in interest rates may cause the market price of our common units
to decline.
An increase in interest rates may cause a corresponding decline
in demand for equity investments in general, and in particular
for yield-based equity investments such as our common units. Any
such increase in interest rates or reduction in demand for our
common units resulting from other relatively more attractive
investment opportunities may cause the trading price of our
common units to decline.
Unitholders
may have liability to repay distributions.
Unitholders may have to repay amounts wrongfully distributed to
them. Under the Marshall Islands Act, we may not make a
distribution to you if the distribution would cause our
liabilities to exceed the fair value of our assets. Marshall
Islands law provides that for a period of three years from the
date of the impermissible distribution, limited partners who
received the distribution and who knew at the time of the
distribution that it violated Marshall Islands law will be
liable to the limited partnership for the distribution amount.
Purchasers of units who become limited partners are liable for
the obligations of the transferring limited partner to make
contributions to the partnership that are known to the purchaser
at the time it became a limited partner and for unknown
obligations if the liabilities could be determined from the
partnership agreement. Liabilities to
11
partners on account of their partnership interest and
liabilities that are non-recourse to the partnership are not
counted for purposes of determining whether a distribution is
permitted.
We
have been organized as a limited partnership under the laws of
the Republic of The Marshall Islands, which does not have a
well-developed body of partnership law.
Our partnership affairs are governed by our partnership
agreement and by the Marshall Islands Act. The provisions of the
Marshall Islands Act resemble provisions of the limited
partnership laws of a number of states in the United States,
most notably Delaware. The Marshall Islands Act also provides
that it is to be applied and construed to make it uniform with
the Delaware Revised Uniform Limited Partnership Act and, so
long as it does not conflict with the Marshall Islands Act or
decisions of the Marshall Islands courts, interpreted according
to the non-statutory law (or case law) of the courts of the
State of Delaware. There have been, however, few, if any, court
cases in the Marshall Islands interpreting the Marshall Islands
Act, in contrast to Delaware, which has a fairly well-developed
body of case law interpreting its limited partnership statute.
Accordingly, we cannot predict whether Marshall Islands courts
would reach the same conclusions as Delaware courts. For
example, the rights of our unitholders and the fiduciary
responsibilities of our general partner under Marshall Islands
law are not as clearly established as under judicial precedent
in existence in Delaware. As a result, unitholders may have more
difficulty in protecting their interests in the face of actions
by our general partner and its officers and directors than would
unitholders of a limited partnership formed in the United States.
Because
we are organized under the laws of the Marshall Islands, it may
be difficult to serve us with legal process or enforce judgments
against us, our directors or our management.
We are organized under the laws of the Marshall Islands, and all
of our assets are located outside of the United States. Our
business is operated primarily from our offices in Bermuda,
Norway and Singapore. In addition, our general partner is a
Marshall Islands limited liability company and a majority of its
directors and officers are non-residents of the United States,
and all or a substantial portion of the assets of these
non-residents are located outside the United States. As a
result, it may be difficult or impossible for you to bring an
action against us or against these individuals in the United
States if you believe that your rights have been infringed under
securities laws or otherwise. Even if you are successful in
bringing an action of this kind, the laws of the Marshall
Islands and of other jurisdictions may prevent or restrict you
from enforcing a judgment against our assets or the assets of
our general partner or its directors and officers. For more
information regarding the relevant laws of the Marshall Islands,
please read Service of Process and Enforcement of Civil
Liabilities.
Tax
Risks
In addition to the following risk factors, you should read
Material U.S. Federal Income Tax Considerations
and
Non-United
States Tax Considerations for a more complete discussion
of the expected material U.S. federal and
non-U.S. income
tax considerations relating to us and the ownership and
disposition of our common units, as well as the information
included in Item 4(E) of our latest Annual Report on
Form 20-F
filed with the SEC and any updates thereof, which information is
incorporated by reference into this prospectus.
U.S.
tax authorities could treat us as a passive foreign
investment company, which could have adverse U.S. federal
income tax consequences to U.S. holders.
A foreign entity taxed as a corporation for U.S. federal
income tax purposes will be treated as a passive foreign
investment company (or PFIC), for U.S. federal
income tax purposes if at least 75.0% of its gross income for
any taxable year consists of certain types of passive
income, or at least 50.0% of the average value of the
entitys assets produce or are held for the production of
those types of passive income. For purposes of these
tests, passive income includes dividends, interest,
and gains from the sale or exchange of investment property and
rents and royalties other than rents and royalties that are
received from unrelated parties in connection with the active
conduct of a trade or business. For purposes of these tests,
income
12
derived from the performance of services does not constitute
passive income. U.S. shareholders of a PFIC are
subject to a disadvantageous U.S. federal income tax regime
with respect to the income derived by the PFIC, the
distributions they receive from the PFIC, and the gain, if any,
they derive from the sale or other disposition of their shares
in the PFIC.
While there are legal uncertainties involved in this
determination, our counsel, Perkins Coie LLP, is of the opinion
that we should not be a PFIC based on certain assumptions made
by them as well as certain representations we made to them
regarding the composition of our assets, the source of our
income, and the nature of our operations. However, no assurance
can be given that the U.S. Internal Revenue Service will
accept this position or that we would not constitute a PFIC for
any future taxable year if there were to be changes in our
assets, income or operations.
The
preferential tax rates applicable to qualified dividend income
are temporary, and the enactment of proposed legislation could
affect whether dividends paid by us constitute qualified
dividend income eligible for the preferential
rate.
Certain of our distributions may be treated as qualified
dividend income eligible for preferential rates of
U.S. federal income tax to U.S. individual unitholders
(and certain other U.S. unitholders). In the absence of
legislation extending the term for these preferential tax rates,
all dividends received by such U.S. taxpayers in tax years
beginning on January 1, 2011 or later will be taxed at
ordinary graduated tax rates. Please read Material
U.S. Federal Income Tax Considerations United
States Federal Income Taxation of U.S. Holders
Distributions.
Legislation has been, and may in the future be, proposed which,
if enacted, could deny the preferential rate of
U.S. federal income tax currently imposed on distributions
paid by us. As of the date of this prospectus, it is not
possible to predict with any certainty whether such proposed
legislation will be enacted.
We are
subject to taxes, which reduces our cash available for
distribution to you.
Some of our subsidiaries are subject to tax in the jurisdictions
in which they are organized or operate, which reduces the amount
of our cash available for distribution. In computing our tax
obligation in these jurisdictions, we are required to take
various tax accounting and reporting positions on matters that
are not entirely free from doubt and for which we have not
received rulings from the governing authorities. We cannot
assure you that upon review of these positions the applicable
authorities will agree with our positions. A successful
challenge by a tax authority could result in additional tax
imposed on our subsidiaries, further reducing the cash available
for distribution. In addition, changes in our operations or
ownership could result in additional tax being imposed on us,
OPCO or our or its subsidiaries in jurisdictions in which
operations are conducted. For example, if Teekay Corporation
holds less than 50.0% of the value of our units in the future,
our U.S. source income may become subject to taxation under
Section 883 of the U.S. Internal Revenue Code.
You
may be subject to income tax in one or more
non-U.S.
countries, including Canada, as a result of owning our common
units if, under the laws of any such country, we or OPCO are
considered to be carrying on business there. Such laws may
require you to file a tax return with and pay taxes to those
countries.
We intend that our affairs and the business of each of our
controlled affiliates, including OPCO, be conducted and operated
in a manner that minimizes income taxes imposed upon us and
these controlled affiliates or which may be imposed upon you as
a result of owning our common units. However, because we are
organized as a partnership, there is a risk in some
jurisdictions that our activities and the activities of OPCO and
our or its subsidiaries may be attributed to our unitholders for
tax purposes and, thus, that you will be subject to tax in one
or more
non-U.S. countries,
including Canada, as a result of owning our common units if,
under the laws of any such country, we or OPCO are considered to
be carrying on business there. Under the Income Tax Act
(Canada), our election to be treated as a corporation for
U.S. tax purposes has no effect. Therefore, we will
continue to be treated as a partnership for Canadian tax
purposes. If you are subject to tax in any such country, you may
be required to file a tax return with and to pay tax in that
country based
13
on your allocable share of our income. We may be required to
reduce distributions to you on account of any withholding
obligations imposed upon us by that country in respect of such
allocation to you. The United States may not allow a tax credit
for any foreign income taxes that you directly or indirectly
incur.
We believe we conduct our and OPCOs activities in a manner
so that our unitholders should not be considered to be carrying
on business in Canada solely as a consequence of the
acquisition, holding, disposition or redemption of our common
units. However, the question of whether either we or any of our
controlled affiliates will be treated as carrying on business in
any country, including Canada, will largely be a question of
fact determined through an analysis of contractual arrangements,
including the services agreements we, OPCO and our and its
operating subsidiaries have entered into and, will enter into in
the future, with subsidiaries of Teekay Corporation, and the way
we and OPCO conduct business or operations, all of which may
change over time. Please read
Non-United
States Tax Considerations Canadian Federal Income
Tax Considerations. The laws of Canada or any other
foreign country may also change, which could cause the
countrys taxing authorities to determine that we or OPCO
are carrying on business in such country and are subject to its
taxation laws. Any foreign taxes imposed on us, OPCO or any
subsidiaries will reduce our cash available for distribution to
you.
14
USE OF
PROCEEDS
Unless we specify otherwise in any prospectus supplement, we
will use the net proceeds from our sale of securities covered by
this prospectus for general partnership purposes, which may
include, among other things:
|
|
|
|
|
paying or refinancing all or a portion of our indebtedness
outstanding at the time; and
|
|
|
|
funding working capital, capital expenditures or acquisitions.
|
The actual application of proceeds from the sale of any
particular offering of securities covered by this prospectus
will be described in the applicable prospectus supplement
relating to the offering.
15
CAPITALIZATION
The following table sets forth our capitalization as of
December 31, 2007.
This table is derived from and should be read in conjunction
with our consolidated financial statements, including
accompanying notes, incorporated by reference in this
prospectus. You should also read this table in conjunction with
the section entitled Managements Discussion and
Analysis of Financial Condition and Results of Operations
and our consolidated financial statements and the related notes
thereto, which are incorporated by reference herein from our
Annual Report on
Form 20-F
for the year ended December 31, 2007.
|
|
|
|
|
|
|
As of December 31,
|
|
|
|
2007
|
|
|
|
(In thousands)
|
|
|
Total cash and cash equivalents
|
|
$
|
121,224
|
|
|
|
|
|
|
Long-term debt, including current portion
|
|
$
|
1,517,467
|
|
Non-controlling interest
|
|
|
391,645
|
|
Partners equity
|
|
|
80,969
|
|
Total capitalization
|
|
$
|
1,990,081
|
|
|
|
|
|
|
16
PRICE
RANGE OF COMMON UNITS AND DISTRIBUTIONS
As of April 30, 2008, there were 9,800,000 common units
outstanding, held by approximately 4 holders of record. Our
common units were first offered on the New York Stock Exchange
on December 14, 2006, at an initial price of $21.00 per
unit. Our common units are traded on the New York Stock Exchange
under the symbol TOO.
The following table sets forth, for the periods indicated, the
high and low sales prices for our common units, as reported on
the New York Stock Exchange, and quarterly cash distributions
declared per common unit. The last reported sale price of common
units on the New York Stock Exchange on May 15, 2008 was
$22.11 per common unit.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarterly
|
|
|
|
Closing Sales
|
|
Cash
|
|
|
|
Price Ranges
|
|
Distributions
|
|
|
|
High
|
|
Low
|
|
per Unit(1)
|
|
|
Years Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2007
|
|
$
|
37
|
.45
|
|
$
|
24
|
.04
|
|
|
|
|
Year Ended December 31, 2006(2)
|
|
$
|
26
|
.77
|
|
$
|
25
|
.00
|
|
|
|
|
Quarters Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2008(3)
|
|
$
|
24
|
.35
|
|
$
|
20
|
.35
|
|
|
|
|
March 31, 2008
|
|
$
|
26
|
.46
|
|
$
|
20
|
.71
|
|
$
|
0.40
|
|
December 31, 2007
|
|
$
|
30
|
.46
|
|
$
|
24
|
.04
|
|
$
|
0.40
|
|
September 30, 2007
|
|
$
|
37
|
.45
|
|
$
|
28
|
.00
|
|
$
|
0.385
|
|
June 30, 2007
|
|
$
|
35
|
.40
|
|
$
|
29
|
.00
|
|
$
|
0.35
|
|
March 31, 2007
|
|
$
|
31
|
.66
|
|
$
|
26
|
.00
|
|
$
|
0.35
|
|
December 31, 2006(2)
|
|
$
|
26
|
.77
|
|
$
|
25
|
.00
|
|
$
|
0.05
|
(4)
|
Months Ended
|
|
|
|
|
|
|
|
|
|
|
|
|
May 31, 2008(5)
|
|
$
|
22
|
.18
|
|
$
|
20
|
.35
|
|
|
|
|
April 30, 2008
|
|
$
|
24
|
.35
|
|
$
|
21
|
.51
|
|
|
|
|
March 30, 2008
|
|
$
|
25
|
.32
|
|
$
|
20
|
.71
|
|
|
|
|
February 29, 2008
|
|
$
|
26
|
.46
|
|
$
|
22
|
.09
|
|
|
|
|
January 31, 2008
|
|
$
|
25
|
.86
|
|
$
|
22
|
.75
|
|
|
|
|
December 31, 2007
|
|
$
|
26
|
.37
|
|
$
|
24
|
.41
|
|
|
|
|
|
|
|
(1) |
|
Distributions are shown for the quarter with respect to which
they were declared. Cash distributions were declared and paid
within 45 days following the close of each quarter. |
|
(2) |
|
Period beginning December 14, 2006. |
|
(3) |
|
Period beginning April 1, 2008 and ending May 15, 2008. |
|
(4) |
|
The distribution reflects the
13-day
period from December 19, 2006 to December 31, 2006. |
|
(5) |
|
Period beginning May 1, 2008 and ending May 15, 2008. |
17
DESCRIPTION
OF THE COMMON UNITS
Our common units and our subordinated units represent limited
partner interests in us. The holders of units are entitled to
participate in partnership distributions and exercise the rights
and privileges available to limited partners under our
partnership agreement. For a description of the relative rights
and privileges of holders of common units, holders of
subordinated units and our general partner in and to partnership
distributions, together with a description of the circumstances
under which subordinated units convert into common units, please
read How We Make Cash Distributions.
Number of
Units
We currently have 9,800,000 common units outstanding, of which
1,750,000 are held by Teekay Corporation, which owns our general
partner. We also have 9,800,000 subordinated units outstanding,
for which there is no established public trading market, all of
which are held by Teekay Corporation. The common units and the
subordinated units represent an aggregate 98% limited partner
interest and the general partner interest represents a 2%
general partner interest in us.
Issuance
of Additional Securities
Our partnership agreement authorizes us to issue an unlimited
number of additional partnership securities and rights to buy
partnership securities for the consideration and on the terms
and conditions determined by our general partner without the
approval of our unitholders.
We may fund acquisitions through the issuance of additional
common units or other equity securities. Holders of any
additional common units we issue will be entitled to share
equally with the then-existing holders of common units in our
distributions of available cash. In addition, the issuance of
additional common units or other equity securities interests may
dilute the value of the interests of the then-existing holders
of common units in our net assets.
In accordance with Marshall Islands law and the provisions of
our partnership agreement, we may also issue additional
partnership securities interests that, as determined by the
general partner, have special voting or other rights to which
the common units are not entitled.
Upon issuance of additional partnership securities, our general
partner will have the right, but not the obligation to make
additional capital contributions to the extent necessary to
maintain its 2% general partner interest in us. In addition, our
general partner and its affiliates have the right, which it may
from time to time assign in whole or in part to any of its
affiliates, to purchase common units, subordinated units or
other equity securities whenever, and on the same terms that, we
issue those securities to persons other than our general partner
and its affiliates, to the extent necessary to maintain its and
its affiliates percentage interest, including its interest
represented by common units and subordinated units, that existed
immediately prior to each issuance. Other holders of common
units do not have similar preemptive rights to acquire
additional common units or other partnership securities.
Meetings;
Voting
Unlike the holders of common stock in a corporation, the holders
of our units have only limited voting rights on matters
affecting our business. They have no right to elect our general
partner (who manages our operations and activities), or the
directors of our general partner, on an annual or other
continuing basis. On those matters that are submitted to a vote
of unitholders, each record holder of a unit may vote according
to the holders percentage interest in us, although
additional limited partner interests having special voting
rights could be issued. However, if at any time any person or
group, other than our general partner and its affiliates, or a
direct or subsequently approved transferee of our general
partner or its affiliates or a transferee approved by the board
of directors of our general partner, acquires, in the aggregate,
beneficial ownership of 20% or more of any class of units then
outstanding, that person or group will lose voting rights on all
of its units and the units may not be voted on any matter and
will not be considered to be outstanding when sending notices
18
of a meeting of unitholders, calculating required votes,
determining the presence of a quorum, or for other similar
purposes.
Holders of our subordinated units sometimes vote as a single
class together with the holders of our common units and
sometimes vote as a class separate from the holders of common
units. Holders of subordinated units, like holders of common
units, have very limited voting rights. During the subordination
period, common units (excluding common units held by our general
partner and its affiliates) and subordinated units each vote
separately as a class generally on the following matters:
|
|
|
|
|
a merger of our partnership;
|
|
|
|
a sale or exchange of all or substantially all of our assets;
|
|
|
|
the election of a successor general partner in connection with
certain withdrawals of our general partner;
|
|
|
|
dissolution or reconstitution of our partnership;
|
|
|
|
some amendments to our partnership agreement; and
|
|
|
|
some amendments to the operating agreement of our operating
company or action taken by us as a member of the operating
company if such amendment or action would materially and
adversely affect our limited partners.
|
Neither the subordinated units nor any common units held by our
general partners or any of its affiliates are entitled to vote
on approval of the withdrawal of our general partner or the
transfer by our general partner of its general partner interest
or incentive distribution rights under some circumstances.
Removal of our general partner requires:
|
|
|
|
|
a
66-2/3%
vote of all outstanding units, voting as a single class,
including units held by our general partner and its
affiliates; and
|
|
|
|
the election of a successor general partner by the holders of a
majority of the outstanding common units and subordinated units,
voting as separate classes.
|
Except as described above regarding a person or group owning 20%
or more of any class of units then outstanding, unitholders or
assignees who are record holders of units on the record date
will be entitled to notice of, and to vote at, any meetings of
our limited partners and to act upon matters for which approvals
may be solicited. Common units that are owned by an assignee who
is a record holder, but who has not yet been admitted as a
limited partner, will be voted by the general partner at the
written direction of the record holder. Absent direction of this
kind, the common units will not be voted, except that, in the
case of common units held by our general partner on behalf of
unpermitted citizen assignees, our general partner will
distribute the votes on those common units in the same ratios as
the votes of limited partners on other units are cast.
Any action that is required or permitted to be taken by the
unitholders may be taken either at a meeting of the unitholders
or without a meeting if consents in writing describing the
action so taken are signed by holders of the number of units
necessary to authorize or take that action at a meeting.
Meetings of the unitholders may be called by our general partner
or by unitholders owning at least 20% of the outstanding units
of the class for which a meeting is proposed. Unitholders may
vote either in person or by proxy at meetings. The holders of a
majority of the outstanding units of the class or classes for
which a meeting has been called, represented in person or by
proxy, will constitute a quorum unless any action by the
unitholders requires approval by holders of a greater percentage
of the units, in which case the quorum will be the greater
percentage.
Common units held in nominee or street name account will be
voted by the broker or other nominee in accordance with the
instruction of the beneficial owner unless the arrangement
between the beneficial owner and his nominee provides otherwise.
19
Call
Right
If at any time our general partner and its affiliates hold more
than 80% of the then-issued and outstanding partnership
securities of any class, our general partner will have the
right, which it may assign in whole or in part to any of its
affiliates or to us, to acquire all, but not less than all, of
the remaining partnership securities of the class held by
unaffiliated persons as of a record date to be selected by our
general partner, on at least 10 but not more than
60 days notice. The purchase price in this event is
the greater of (x) the average of the daily closing prices
of the partnership securities of such class over the 20 trading
days preceding the date three days before notice of exercise of
the call right is first mailed and (y) the highest price
paid by our general partner or any of its affiliates for
partnership securities of such class during the
90-day
period preceding the date such notice is first mailed.
As a result of our general partners right to purchase
outstanding partnership securities, a holder of partnership
securities may have the holders partnership securities
purchased at an undesirable time or price. The tax consequences
to a unitholder of the exercise of this call right are the same
as a sale by that unitholder of common units in the market.
Please read Material U.S. Federal Income Tax
Considerations United States Federal Income Taxation
of U.S. Holders Sale, Exchange or other
Disposition of Common Units and United
States Federal Income Taxation of
Non-U.S. Holders
Disposition of Units.
Exchange
Listing
Our common units are listed on the New York Stock Exchange,
where they trade under the symbol TOO.
Transfer
Agent and Registrar
BNY Mellon Shareowner Services serves as registrar and transfer
agent for our common units. We pay all fees charged by the
transfer agent for transfers of common units, except the
following, which must be paid by unitholders:
|
|
|
|
|
surety bond premiums to replace lost or stolen certificates,
taxes and other governmental charges;
|
|
|
|
special charges for services requested by a holder of a common
unit; and
|
|
|
|
other similar fees or charges.
|
There is no charge to unitholders for disbursements of our cash
distributions. We will indemnify the transfer agent, its agents
and each of their stockholders, directors, officers and
employees against all claims and losses that may arise out of
acts performed or omitted for its activities in that capacity,
except for any liability due to any gross negligence or
intentional misconduct of the indemnified person or entity.
Transfer
of Common Units
By transfer of common units in accordance with our partnership
agreement, each transferee of common units automatically shall
be admitted as a limited partner with respect to the common
units transferred when such transfer and admission is reflected
in our books and records. Our general partner will cause any
transfers to be recorded on our books and records no less
frequently than quarterly. Each transferee automatically shall
be deemed to:
|
|
|
|
|
represent that the transferee has the capacity, power and
authority to become bound by our partnership agreement;
|
|
|
|
agree to be bound by the terms and conditions of, and to have
executed, our partnership agreement; and
|
|
|
|
give the consents and approvals contained in our partnership
agreement.
|
We are entitled to treat the nominee holder of a common unit as
the absolute owner. In that case, the beneficial holders
rights are limited solely to those that it has against the
nominee holder as a result of any agreement between the
beneficial owner and the nominee holder.
20
Common units are securities and are transferable according to
the laws governing transfer of securities. In addition to other
rights acquired upon transfer, the transferor gives the
transferee the right to become a limited partner in our
partnership for the transferred common units.
Other
Matters
Merger, Sale, or Other Disposition of
Assets. A merger or consolidation of us requires
the consent of our general partner, in addition to the
unitholder vote described above under
Meetings; Voting. However, our general
partner will have no duty or obligation to consent to any merger
or consolidation and may decline to do so free of any fiduciary
duty or obligation whatsoever to us or the limited partners,
including any duty to act in good faith or in the best interests
of us or the limited partners. In addition, our partnership
agreement generally prohibits our general partner, without the
prior approval of the holders of units representing a unit
majority, from causing us to, among other things, sell,
exchange, or otherwise dispose of all or substantially all of
our assets in a single transaction or a series of related
transactions, including by way of merger, consolidation, or
other combination, or approving on our behalf the sale,
exchange, or other disposition of all or substantially all of
the assets of our subsidiaries. Our general partner may,
however, mortgage, pledge, hypothecate, or grant a security
interest in all or substantially all of our assets without that
approval. Our general partner may also sell all or substantially
all of our assets under a foreclosure or other realization upon
those encumbrances without that approval. The unitholders are
not entitled to dissenters rights of appraisal under our
partnership agreement or applicable law in the event of a
conversion, merger or consolidation, a sale of substantially all
of our assets, or any other transaction or event.
Registration Rights. Under our partnership
agreement, we have agreed to register for resale under the
Securities Act of 1933 and applicable state securities laws any
common units, subordinated units or other partnership securities
proposed to be sold by our general partner or any of its
affiliates or their assignees if an exemption from the
registration requirements is not otherwise available or
advisable. These registration rights continue for two years
following any withdrawal or removal of Teekay Offshore GP L.L.C.
as our general partner. We are obligated to pay all expenses
incidental to the registration, excluding underwriting discounts
and commissions.
Summary
of Our Partnership Agreement
A copy of our partnership agreement is filed as an exhibit to
the registration statement of which this prospectus is a part. A
summary of the important provisions of our partnership agreement
and the rights and privileges of our unitholders is included in
our registration statement on
Form 8-A/A
as filed with the SEC on May 6, 2008, including any
subsequent amendments or reports filed for the purpose of
updating such description. Please read Where You Can Find
More Information and Incorporation of Documents by
Reference.
21
HOW WE
MAKE CASH DISTRIBUTIONS
Distribution
of Available Cash
General
Within approximately 45 days after the end of each quarter,
we distribute all of our available cash (defined below) to
unitholders of record on the applicable record date.
Available
Cash
Available cash generally means, for each fiscal quarter, all
cash on hand at the end of the quarter (including our
proportionate share of cash on hand of certain subsidiaries we
do not wholly own, including OPCO):
|
|
|
|
|
less the amount of cash reserves (including our proportionate
share of cash reserves of certain subsidiaries we do not wholly
own) established by our general partner to:
|
|
|
|
|
|
provide for the proper conduct of our business (including
reserves for future capital expenditures and for anticipated
credit needs);
|
|
|
|
comply with applicable law, any debt instruments or other
agreements; or
|
|
|
|
provide funds for distributions to our unitholders and to our
general partner for any one or more of the next four quarters;
|
|
|
|
|
|
plus all cash on hand (including our proportionate share of cash
on hand of certain subsidiaries we do not wholly own) on the
date of determination of available cash for the quarter
resulting from working capital borrowings made after the end of
the quarter. Working capital borrowings are generally borrowings
that are made under credit agreements and in all cases are used
solely for working capital purposes or to pay distributions to
partners.
|
Minimum
Quarterly Distribution
Common unitholders are entitled under our partnership agreement
to receive a quarterly distribution of $0.35 per unit, or $1.40
per unit per year, prior to any distribution on our subordinated
units, to the extent we have sufficient cash on hand to pay the
distribution after we establish cash reserves and pay fees and
expenses, including payments to our general partner. Our general
partner has the authority to determine the amount of our
available cash for any quarter. This determination, as well as
all determinations made by our general partner, must be made in
good faith. Our general partners board of directors
declared an increase in our quarterly distribution to $0.385 per
unit, or $1.54 per year, commencing with the third quarter of
2007, and a subsequent increase to $0.40 per unit, or $1.60 per
year, commencing with the fourth quarter of 2007. There is no
guarantee that we will pay the quarterly distribution in this
amount or the minimum quarterly distribution on our common units
in any quarter, and we and OPCO will be prohibited from making
any distributions to our common unitholders or us, respectively,
if any such distribution would cause an event of default, or an
event of default is existing, under our or OPCOs credit
facilities.
Operating
Surplus and Capital Surplus
General
All cash distributed to unitholders is characterized as either
operating surplus or capital surplus. We
treat distributions of available cash from operating surplus
differently than distributions of available cash from capital
surplus.
22
Definition
of Operating Surplus
Operating surplus, for any period, generally means:
|
|
|
|
|
$15.0 million; plus
|
|
|
|
all cash receipts (including our proportionate share of cash
receipts for certain subsidiaries we do not wholly own,
including OPCO), after the closing of our initial public
offering, excluding cash from (1) borrowings, other than
working capital borrowings, (2) sales of equity and debt
securities, (3) sales or other dispositions of assets
outside the ordinary course of business, (4) termination of
interest rate swap agreements, (5) capital contributions or
(6) corporate reorganizations or restructurings; plus
|
|
|
|
working capital borrowings (including our proportionate share of
working capital borrowings for certain subsidiaries we do not
wholly own) made after the end of a quarter but before the date
of determination of operating surplus for the quarter; plus
|
|
|
|
interest paid on debt incurred (including periodic net payments
under related interest rate swap agreements) and cash
distributions paid on equity securities issued, in each case
(and including our proportionate share of such interest and cash
distributions paid by certain subsidiaries we do not wholly
own), to finance all or any portion of the construction,
expansion or improvement of a capital asset such as vessels
during the period from such financing until the earlier to occur
of the date the capital asset is put into service or the date
that it is abandoned or disposed of; plus
|
|
|
|
interest paid on debt incurred (including periodic net payments
under related interest rate swap agreements) and cash
distributions paid on equity securities issued, in each case
(and including our proportionate share of such interest and cash
distributions paid by certain subsidiaries we do not wholly
own), to pay the construction period interest on debt incurred
(including periodic net payments under related interest rate
swap agreements), or to pay construction period distributions on
equity issued, to finance the construction projects described in
the immediately preceding bullet; less
|
|
|
|
all of our operating expenditures (including our proportionate
share of operating expenditures by certain subsidiaries we do
not wholly own) after the closing of our initial public offering
and the repayment of working capital borrowings, but not
(1) the repayment of other borrowings, (2) actual
maintenance capital expenditures, or expansion capital
expenditures or investment capital expenditures,
(3) transaction expenses (including taxes) related to
interim capital transactions or (4) distributions; less
|
|
|
|
estimated maintenance capital expenditures and the amount of
cash reserves (including our proportionate share of cash
reserves for certain subsidiaries we do not wholly own)
established by our general partner to provide funds for future
operating expenditures.
|
If a working capital borrowing, which increases operating
surplus, is not repaid during the
12-month
period following the borrowing, it will be deemed repaid at the
end of such period, thus decreasing operating surplus at such
time. When such working capital borrowing is in fact repaid, it
will not be treated as a reduction in operating surplus because
operating surplus will have been previously reduced by the
deemed repayment.
As described above, operating surplus includes a provision that
will enable us, if we choose, to distribute as operating surplus
up to $15.0 million of cash we receive in the future from
non-operating sources, such as asset sales, issuances of
securities and long-term borrowing, that would otherwise be
distributed as capital surplus. In addition, the effect of
including, as described above, certain cash distributions on
equity securities or interest payments on debt in operating
surplus also would be to increase operating surplus by the
amount of any such cash distributions or interest payments. As a
result, we may distribute as operating surplus up to the amount
of any such cash distributions or interest payments of cash we
receive from non-operating sources.
Capital
Expenditures
For purposes of determining operating surplus, maintenance
capital expenditures are those capital expenditures required to
maintain over the long term the operating capacity of or the
revenue generated by
23
capital assets, and expansion capital expenditures are those
capital expenditures that increase the operating capacity of or
the revenue generated by capital assets. To the extent, however,
that capital expenditures associated with acquiring a new vessel
increase the revenues or the operating capacity of the fleet,
those capital expenditures would be classified as expansion
capital expenditures.
Investment capital expenditures are those capital expenditures
that are neither maintenance capital expenditures nor expansion
capital expenditures. Investment capital expenditures largely
consist of capital expenditures made for investment purposes.
Examples of investment capital expenditures include traditional
capital expenditures for investment purposes, such as purchases
of securities, as well as other capital expenditures that might
be made in lieu of such traditional investment capital
expenditures, such as the acquisition of a capital asset for
investment purposes.
Examples of maintenance capital expenditures include capital
expenditures associated with drydocking a vessel or acquiring a
new vessel to the extent such expenditures are incurred to
maintain the operating capacity of or the revenue generated by
the fleet. Maintenance capital expenditures also include
interest (and related fees) on debt incurred and distributions
on equity issued to finance the construction of a replacement
vessel and paid during the construction period, which we define
as the period beginning on the date of entry into a binding
construction contract and ending on the earlier of the date that
the replacement vessel commences commercial service or the date
that the replacement vessel is abandoned or disposed of. Debt
incurred to pay or equity issued to fund construction period
interest payments, and distributions on such equity, are also
considered maintenance capital expenditures.
Because maintenance capital expenditures may be very large and
vary significantly in timing, the amount of actual maintenance
capital expenditures may differ substantially from period to
period, which could cause similar fluctuations in the amounts of
operating surplus, adjusted operating surplus, and available
cash for distribution to our unitholders if we subtracted actual
maintenance capital expenditures from operating surplus each
quarter. Accordingly, to eliminate the effect on operating
surplus of these fluctuations, our partnership agreement
requires that an amount equal to an estimate of the average
quarterly maintenance capital expenditures necessary to maintain
the operating capacity of or the revenue generated by our
capital assets over the long term be subtracted from operating
surplus each quarter, as opposed to the actual amounts spent.
The amount of estimated maintenance capital expenditures
deducted from operating surplus is subject to review and change
by the board of directors of our general partner at least once a
year, provided that any change must be approved by the
boards conflicts committee. The estimate is made at least
annually and whenever an event occurs that is likely to result
in a material adjustment to the amount of our maintenance
capital expenditures, such as a major acquisition or the
introduction of new governmental regulations that will affect
our fleet. For purposes of calculating operating surplus, any
adjustment to this estimate is prospective only. The partnership
agreement of OPCO requires that the board of directors of our
general partner, on our behalf, must approve the amount of
maintenance capital reserves for OPCO.
Our use of estimated maintenance capital expenditures in
calculating operating surplus has the following effects:
|
|
|
|
|
it reduces the risk that actual maintenance capital expenditures
in any one quarter will be large enough to make operating
surplus less than the minimum quarterly distribution to be paid
on all the units for that quarter and subsequent quarters;
|
|
|
|
it reduces the need for us to borrow to pay distributions;
|
|
|
|
it is more difficult for us to raise our distribution above the
minimum quarterly distribution and pay incentive distributions
to our general partner; and
|
|
|
|
it reduces the likelihood that a large maintenance capital
expenditure in a period will prevent our general partners
affiliates from being able to convert some or all of their
subordinated units into common units since the effect of an
estimate is to spread the expected expense over several periods,
mitigating the effect of the actual payment of the expenditure
on any single period.
|
24
Definition
of Capital Surplus
Capital surplus generally is generated only by:
|
|
|
|
|
borrowings other than working capital borrowings;
|
|
|
|
sales of debt and equity securities; and
|
|
|
|
sales or other dispositions of assets for cash, other than
inventory, accounts receivable and other current assets sold in
the ordinary course of business or non-current assets sold as
part of normal retirements or replacements of assets.
|
Characterization
of Cash Distributions
We treat all available cash distributed as coming from operating
surplus until the sum of all available cash distributed since we
began operations equals the operating surplus as of the most
recent date of determination of available cash. We treat any
amount distributed in excess of operating surplus, regardless of
its source, as capital surplus. As described above, operating
surplus does not reflect actual cash on hand that is available
for distribution to our unitholders. For example, it includes a
provision that enables us, if we choose, to distribute as
operating surplus up to $15.0 million of cash we receive in
the future from non-operating sources such as asset sales,
issuances of securities and long-term borrowings that would
otherwise be distributed as capital surplus. We do not
anticipate that we will make any distributions from capital
surplus.
Subordination
Period
General
During the subordination period, which we define below, our
common units have the right to receive distributions of
available cash from operating surplus in an amount equal to the
minimum quarterly distribution of $0.35 per quarter, plus any
arrearages in the payment of the minimum quarterly distribution
on the common units from prior quarters, before any
distributions of available cash from operating surplus may be
made on our subordinated units. Distribution arrearages do not
accrue on the subordinated units. The purpose of the
subordinated units is to increase the likelihood that during the
subordination period there will be available cash from operating
surplus to be distributed on the common units.
Definition
of Subordination Period
Except as described below under Early Termination of
Subordination Period, the subordination period will extend
until the first day of any quarter, beginning after
December 31, 2009, that each of the following tests are met:
|
|
|
|
|
distributions of available cash from operating surplus on each
of the outstanding common units and subordinated units equaled
or exceeded the minimum quarterly distribution for each of the
three, consecutive, non-overlapping four-quarter periods
immediately preceding that date;
|
|
|
|
the adjusted operating surplus (as defined below)
generated during each of the three consecutive, non-overlapping
four-quarter periods immediately preceding that date equaled or
exceeded the sum of the minimum quarterly distributions on all
of the outstanding common units and subordinated units during
those periods on a fully diluted basis and the related
distribution on the 2% general partner interest during those
periods; and
|
|
|
|
there are no arrearages in payment of the minimum quarterly
distribution on the common units.
|
If the unitholders remove our general partner without cause, the
subordination period may end before December 31, 2009.
25
Early
Termination of Subordination Period.
The subordination period will automatically terminate and the
subordinated units will convert into common units on a
one-for-one
basis if the following tests are met:
|
|
|
|
|
distributions of available cash from operating surplus on each
of the outstanding common units, subordinated units and general
partner units equaled or exceeded $2.10 (150% of the annualized
minimum quarterly distribution) for any four-quarter period
immediately preceding the date of determination; and
|
|
|
|
the adjusted operating surplus (as defined below)
generated during any four-quarter period immediately preceding
the date of determination equaled or exceeded the sum of a
distribution of $2.10 per common unit (150% of the annualized
minimum quarterly distribution) on all of the outstanding common
and subordinated units on a fully diluted basis; and
|
|
|
|
there are no arrearages in payment of the minimum quarterly
distribution on the common units.
|
For purposes of determining whether sufficient adjusted
operating surplus has been generated under these conversion
tests, the conflicts committee of our general partners
board of directors may adjust adjusted operating surplus upwards
or downwards if it determines in good faith that the estimated
amount of maintenance capital expenditures used in the
determination of operating surplus was materially incorrect,
based on circumstances prevailing at the time of original
determination of the estimate.
Definition
of Adjusted Operating Surplus
Adjusted operating surplus, for any period, generally means:
|
|
|
|
|
operating surplus generated with respect to that period; less
|
|
|
|
any net increase in working capital borrowings (including our
proportionate share of any changes in working capital borrowings
of certain subsidiaries we do not wholly own, including OPCO)
with respect to that period; less
|
|
|
|
any net reduction in cash reserves (including our proportionate
share of cash reserves of certain subsidiaries we do not wholly
own) for operating expenditures with respect to that period not
relating to an operating expenditure made with respect to that
period; plus
|
|
|
|
any net decrease in working capital borrowings (including our
proportionate share of any changes in working capital borrowings
of certain subsidiaries we do not wholly own) with respect to
that period; plus
|
|
|
|
any net increase in cash reserves (including our proportionate
share of cash reserves of certain subsidiaries we do not wholly
own) for operating expenditures with respect to that period
required by any debt instrument for the repayment of principal,
interest or premium.
|
Adjusted operating surplus is intended to reflect the cash
generated from operations during a particular period and
therefore excludes net increases in working capital borrowings
and net drawdowns of reserves of cash generated in prior periods.
Effect
of Expiration of the Subordination Period
Upon expiration of the subordination period, each outstanding
subordinated unit will convert into one common unit and will
then participate pro rata with the other common units in
distributions of available cash. In addition, if the unitholders
remove our general partner other than for cause and units held
by our general partner and its affiliates are not voted in favor
of such removal:
|
|
|
|
|
the subordination period will end and each subordinated unit
will immediately convert into one common unit;
|
26
|
|
|
|
|
any existing arrearages in payment of the minimum quarterly
distribution on the common units will be extinguished; and
|
|
|
|
our general partner will have the right to convert its general
partner interest and, if any, its incentive distribution rights
(described below) into common units or to receive cash in
exchange for those interests.
|
Distributions
of Available Cash From Operating Surplus During the
Subordination Period
We make distributions of available cash from operating surplus
for any quarter during the subordination period in the following
manner:
|
|
|
|
|
first, 98.0% to the common unitholders, pro rata, and 2.0% to
our general partner, until we distribute for each outstanding
common unit an amount equal to the minimum quarterly
distribution for that quarter;
|
|
|
|
second, 98.0% to the common unitholders, pro rata, and 2.0% to
our general partner, until we distribute for each outstanding
common unit an amount equal to any arrearages in payment of the
minimum quarterly distribution on the common units for any prior
quarters during the subordination period;
|
|
|
|
third, 98.0% to the subordinated unitholders, pro rata, and 2.0%
to our general partner, until we distribute for each
subordinated unit an amount equal to the minimum quarterly
distribution for that quarter; and
|
|
|
|
thereafter, in the manner described in
Incentive Distribution Rights below.
|
The preceding paragraph is based on the assumption that our
general partner maintains its 2.0% general partner interest and
that we do not issue additional classes of equity securities.
Distributions
of Available Cash From Operating Surplus After the Subordination
Period
We will make distributions of available cash from operating
surplus for any quarter after the subordination period in the
following manner:
|
|
|
|
|
first, 98.0% to all unitholders, pro rata, and 2.0% to our
general partner, until we distribute for each outstanding unit
an amount equal to the minimum quarterly distribution for that
quarter; and
|
|
|
|
thereafter, in the manner described in
Incentive Distribution Rights below.
|
The preceding paragraph is based on the assumption that our
general partner maintains its 2.0% general partner interest and
that we do not issue additional classes of equity securities.
Incentive
Distribution Rights
Incentive distribution rights represent the right to receive an
increasing percentage of quarterly distributions of available
cash from operating surplus after the minimum quarterly
distribution and the target distribution levels have been
achieved. Our general partner currently holds the incentive
distribution rights, but may transfer these rights separately
from its general partner interest. Except for transfers of
incentive distribution rights to an affiliate or another entity
as part of our general partners merger or consolidation
with or into, or sale of all or substantially all of its assets
to such entity, the approval of a majority of our common units
(excluding common units held by our general partner and its
affiliates), voting separately as a class, generally is required
for a transfer of the incentive distributions rights to a third
party prior to December 31, 2016. Any transfer by our
general partner of the incentive distribution rights would not
change the percentage allocations of quarterly distributions
with respect to such rights.
If for any quarter:
|
|
|
|
|
we have distributed available cash from operating surplus to the
common and subordinated unitholders in an amount equal to the
minimum quarterly distribution; and
|
27
|
|
|
|
|
we have distributed available cash from operating surplus on
outstanding common units in an amount necessary to eliminate any
cumulative arrearages in payment of the minimum quarterly
distribution;
|
then, we distribute any additional available cash from operating
surplus for that quarter among the unitholders and our general
partner in the following manner:
|
|
|
|
|
first, 98.0% to all unitholders, pro rata, and 2.0% to our
general partner, until each unitholder receives a total of
$0.4025 per unit for that quarter (the first target
distribution);
|
|
|
|
second, 85.0% to all unitholders, pro rata, and 15.0% to our
general partner, until each unitholder receives a total of
$0.4375 per unit for that quarter (the second target
distribution);
|
|
|
|
third, 75.0% to all unitholders, pro rata, and 25.0% to our
general partner, until each unitholder receives a total of
$0.525 per unit for that quarter (the third target
distribution); and
|
|
|
|
thereafter, 50.0% to all unitholders, pro rata, and 50.0% to our
general partner.
|
In each case, the amount of the target distribution set forth
above is exclusive of any distributions to common unitholders to
eliminate any cumulative arrearages in payment of the minimum
quarterly distribution. The percentage interests set forth above
assume that our general partner maintains its 2.0% general
partner interest and has not transferred the incentive
distribution rights and that we do not issue additional classes
of equity securities.
Percentage
Allocations of Available Cash From Operating Surplus
The following table illustrates the percentage allocations of
the additional available cash from operating surplus between the
unitholders and our general partner up to the various target
distribution levels. The amounts set forth under Marginal
Percentage Interest in Distributions are the percentage
interests of the unitholders and our general partner in any
available cash from operating surplus we distribute up to and
including the corresponding amount in the column Total
Quarterly Distribution Target Amount, until available cash
from operating surplus we distribute reaches the next target
distribution level, if any. The percentage interests shown for
the unitholders and our general partner for the minimum
quarterly distribution are also applicable to quarterly
distribution amounts that are less than the minimum quarterly
distribution. The percentage interests shown for our general
partner include its 2.0% general partner interest and assume our
general partner has contributed any capital necessary to
maintain its 2.0% general partner interest and has not
transferred the incentive distribution rights.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marginal Percentage
|
|
|
|
Total Quarterly Distribution
|
|
|
Interest in Distributions
|
|
|
|
Target Amount
|
|
|
Unitholders
|
|
|
General Partner
|
|
|
Minimum Quarterly Distribution
|
|
$
|
0.35
|
|
|
|
98
|
%
|
|
|
2
|
%
|
First Target Distribution
|
|
up to $
|
0.4025
|
|
|
|
98
|
%
|
|
|
2
|
%
|
Second Target Distribution
|
|
above $
|
0.4025 up to $0.4375
|
|
|
|
85
|
%
|
|
|
15
|
%
|
Third Target Distribution
|
|
above $
|
0.4375 up to $0.525
|
|
|
|
75
|
%
|
|
|
25
|
%
|
Thereafter
|
|
above $
|
0.525
|
|
|
|
50
|
%
|
|
|
50
|
%
|
Distributions
From Capital Surplus
How
Distributions From Capital Surplus Are Made
We make distributions of available cash from capital surplus, if
any, in the following manner:
|
|
|
|
|
first, 98.0% to all unitholders, pro rata, and 2.0% to our
general partner, until we distribute for each common unit that
was issued in this offering, an amount of available cash from
capital surplus equal to the initial public offering price of
our common units; and
|
|
|
|
second, 98.0% to the common unitholders, pro rata, and 2.0% to
our general partner, until we distribute for each common unit,
an amount of available cash from capital surplus equal to any
unpaid arrearages in payment of the minimum quarterly
distribution on the common units; and
|
28
|
|
|
|
|
thereafter, we make all distributions of available cash from
capital surplus as if they were from operating surplus.
|
The preceding paragraph is based on the assumption that our
general partner maintains its 2.0% general partner interest and
that we do not issue additional classes of equity securities.
Effect
of a Distribution From Capital Surplus
Our partnership agreement treats a distribution of capital
surplus as the repayment of the initial unit price from our
initial public offering on December 19, 2006, which is a
return of capital. Each time a distribution of capital surplus
is made, the minimum quarterly distribution and the target
distribution levels will be reduced in the same proportion as
the distribution had to the fair market value of the common
units prior to the announcement of the distribution. Because
distributions of capital surplus will reduce the minimum
quarterly distribution, after any of these distributions are
made, it may be easier for our general partner to receive
incentive distributions and for the subordinated units to
convert into common units. However, any distribution of capital
surplus before the minimum quarterly distribution is reduced to
zero cannot be applied to the payment of the minimum quarterly
distribution or any arrearages.
Once we reduce the minimum quarterly distribution and the target
distribution levels to zero, we will then make all future
distributions from operating surplus, with 50.0% being paid to
the holders of units and 50.0% to our general partner. The
percentage interests shown for our general partner include its
2.0% general partner interest and assume the general partner
maintains its 2.0% general partner interest and has not
transferred the incentive distribution rights.
Adjustment
to the Minimum Quarterly Distribution and Target Distribution
Levels
In addition to adjusting the minimum quarterly distribution and
target distribution levels to reflect a distribution of capital
surplus, if we combine our units into fewer units or subdivide
our units into a greater number of units, we will
proportionately adjust:
|
|
|
|
|
the minimum quarterly distribution;
|
|
|
|
the target distribution levels; and
|
|
|
|
the initial unit price.
|
For example, if a
two-for-one
split of the common and subordinated units should occur, the
minimum quarterly distribution, the target distribution levels
and the initial unit price would each be reduced to 50.0% of its
initial level. If we combine our common units into a lesser
number of units or subdivide our common units into a greater
number of units, we will combine our subordinated units or
subdivide our subordinated units, using the same ratio applied
to the common units. We will not make any adjustment by reason
of the issuance of additional units for cash or property.
In addition, if legislation is enacted or if existing law is
modified or interpreted by a governmental taxing authority so
that OPCO or any subsidiary becomes subject to additional
taxation as an entity for U.S. federal, state, local or
foreign tax purposes, our partnership agreement specifies that
the minimum quarterly distribution and the target distribution
levels for each quarter will be reduced by multiplying each
distribution level by a fraction, the numerator of which is
available cash for that quarter and the denominator of which is
the sum of available cash for that quarter plus our general
partners estimate of our direct or indirect aggregate
liability for the quarter for such taxes payable by reason of
such legislation or interpretation. To the extent that the
actual tax liability differs from the estimated tax liability
for any quarter, the difference will be accounted for in
subsequent quarters.
Distributions
of Cash Upon Liquidation
If we dissolve in accordance with our partnership agreement, we
will sell or otherwise dispose of our assets in a process called
liquidation. We will apply the proceeds of liquidation in the
manner set forth below.
29
If, as of the date three trading days prior to the announcement
of the proposed liquidation, the average closing price of our
common units for the preceding 20 trading days (or the
current market price ) is greater than the sum of:
|
|
|
|
|
any arrearages in payment of the minimum quarterly distribution
on the common units for any prior quarters during the
subordination period; plus
|
|
|
|
the initial public offering unit price (less any prior capital
surplus distributions and any prior cash distributions made in
connection with a partial liquidation);
|
then the proceeds of the liquidation will be applied as follows:
|
|
|
|
|
first, 98.0% to the common unitholders, pro rata, and 2.0% to
our general partner, until we distribute for each outstanding
common unit an amount equal to the current market price of our
common units;
|
|
|
|
second, 98.0% to the subordinated unitholders, pro rata, and
2.0% to our general partner, until we distribute for each
subordinated unit an amount equal to the current market price of
our common units; and
|
|
|
|
thereafter, 50.0% to all unitholders, pro rata, 48.0% to holders
of incentive distribution rights and 2.0% to our general partner.
|
If, as of the date three trading days prior to the announcement
of the proposed liquidation, the current market price of our
common units is equal to or less than the sum of:
|
|
|
|
|
any arrearages in payment of the minimum quarterly distribution
on the common units for any prior quarters during the
subordination period; plus
|
|
|
|
the initial public offering unit price (less any prior capital
surplus distributions and any prior cash distributions made in
connection with a partial liquidation);
|
then the proceeds of the liquidation will be applied as follows:
|
|
|
|
|
first, 98.0% to the common unitholders, pro rata, and 2.0% to
our general partner, until we distribute for each outstanding
common unit an amount equal to the initial public offering unit
price (less any prior capital surplus distributions and any
prior cash distributions made in connection with a partial
liquidation);
|
|
|
|
second, 98.0% to the common unitholders, pro rata, and 2.0% to
our general partner, until we distribute for each outstanding
common unit an amount equal to any arrearages in payment of the
minimum quarterly distribution on the common units for any prior
quarters during the subordination period;
|
|
|
|
third, 98.0% to the subordinated unitholders and 2.0% to our
general partner, until we distribute for each outstanding
subordinated unit an amount equal to the initial public offering
unit price (less any prior capital surplus distributions and any
prior cash distributions made in connection with a partial
liquidation); and
|
|
|
|
thereafter, 50.0% to all unitholders, pro rata, 48.0% to holders
of incentive distribution rights and 2.0% to our general partner.
|
The immediately preceding two paragraphs are based on the
assumption that our general partner maintains its 2.0% general
partner interest and that we do not issue additional classes of
equity securities.
30
MATERIAL
U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of the material U.S. federal
income tax considerations that may be relevant to prospective
unitholders and, unless otherwise noted in the following
discussion, is the opinion of Perkins Coie LLP, our
U.S. counsel, insofar as it relates to matters of
U.S. federal income tax law and legal conclusions with
respect to those matters. The opinion of our counsel is
dependent on the accuracy of representations made by us to them,
including descriptions of our operations contained herein.
This discussion is based upon provisions of the
U.S. Internal Revenue Code of 1986, as amended (or the
Code) as in effect on the date of this prospectus,
existing final and temporary regulations thereunder (or
Treasury Regulations), and current administrative rulings
and court decisions, all of which are subject to change,
possibly with retroactive effect. Changes in these authorities
may cause the tax consequences to vary substantially from the
consequences described below. Unless the context otherwise
requires, references in this section to we,
our or us are references to Teekay
Offshore Partners L.P.
The following summary does not comment on all aspects of
U.S. federal income taxation which may be important to
particular unitholders in light of their individual
circumstances, such as unitholders subject to special tax rules
(e.g., financial institutions, insurance companies,
broker-dealers, tax-exempt organizations, or former citizens or
long-term residents of the United States) or to persons that
will hold the units as part of a straddle, hedge, conversion,
constructive sale, or other integrated transaction for
U.S. federal income tax purposes, partnerships or their
partners, or persons that have a functional currency other than
the U.S. dollar, all of whom may be subject to tax rules
that differ significantly from those summarized below. If a
partnership or other entity taxed as a pass-through entity holds
our common units, the tax treatment of a partner or owner
thereof will generally depend upon the status of the partner or
owner and upon the activities of the partnership or pass-through
entity. If you are a partner in a partnership or owner of a
pass-through entity holding our common units, you should consult
your tax advisor.
No ruling has been or will be requested from the
U.S. Internal Revenue Service (or the IRS) regarding
any matter affecting us or our unitholders. Instead, we will
rely on the opinion of Perkins Coie LLP. Unlike a ruling, an
opinion of counsel represents only that counsels best
legal judgment and does not bind the IRS or the courts.
Accordingly, the opinions and statements made here may not be
sustained by a court if contested by the IRS.
This summary does not discuss any U.S. state or local,
estate or alternative minimum tax considerations regarding the
ownership or disposition of common units. This summary is
written for unitholders that hold their units as capital
assets under the Code. Each unitholder is urged to consult
its tax advisor regarding the U.S. federal, state, local,
and other tax consequences of the ownership or disposition of
common units.
Election
to be Taxed as a Corporation
We have elected to be taxed as a corporation for
U.S. federal income tax purposes. As such, unitholders are
not directly subject to U.S. federal income tax on our
income, but rather are subject to U.S. federal income tax
on distributions received from us and dispositions of units as
described below.
United
States Federal Income Taxation of U.S. Holders
As used herein, the term U.S. Holder means a
beneficial owner of our common units that is a U.S. citizen
or resident (as determined for U.S. federal income tax
purposes), U.S. corporation or other U.S. entity
taxable as a corporation, an estate the income of which is
subject to U.S. federal income taxation regardless of its
source, or a trust if a court within the United States is able
to exercise primary jurisdiction over the administration of the
trust and one or more U.S. persons have the authority to
control all substantial decisions of the trust.
Distributions
Subject to the discussion of the rules applicable to passive
foreign investment companies (or PFICs) below, any
distributions made by us with respect to our common units to a
U.S. Holder generally will
31
constitute dividends, which may be taxable as ordinary income or
qualified dividend income as described in more
detail below, to the extent of our current or accumulated
earnings and profits, as determined under U.S. federal
income tax principles. Distributions in excess of our earnings
and profits will be treated first as a nontaxable return of
capital to the extent of the U.S. Holders tax basis
in its common units on a
dollar-for-dollar
basis and thereafter as capital gain. U.S. Holders that are
corporations generally will not be entitled to claim a dividends
received deduction with respect to any distributions they
receive from us. Dividends paid with respect to our common units
generally will be treated as passive category income
or, in the case of certain types of U.S. Holders,
general category income for purposes of computing
allowable foreign tax credits for U.S. federal income tax
purposes.
Dividends paid on our common units to a U.S. Holder who is
an individual, trust or estate (or a U.S. Individual
Holder) will be treated as qualified dividend
income that is taxable to such U.S. Individual Holder
at preferential capital gain tax rates provided that:
(i) our common units are readily tradable on an established
securities market in the United States (such as the New York
Stock Exchange on which our common units are currently traded);
(ii) we are not a PFIC for the taxable year during which
the dividend is paid or the immediately preceding taxable year
(which we do not believe we are, have been or will be, as
discussed below); (iii) the U.S. Individual Holder has
owned the common units for more than 60 days in the
121-day
period beginning 60 days before the date on which the
common units become ex-dividend; and (iv) the
U.S. Individual Holder is not under an obligation to make
related payments with respect to positions in substantially
similar or related property. There is no assurance that any
dividends paid on our common units will be eligible for these
preferential rates in the hands of a U.S. Individual
Holder. Dividends paid on our common units that are not eligible
for these preferential rates will be taxed as ordinary income to
a U.S. Individual Holder. In the absence of legislation
extending the term of the preferential tax rates for qualified
dividend income, all dividends received by a taxpayer in tax
years beginning on January 1, 2011 or later will be taxed
at ordinary graduated tax rates.
Special rules may apply to any extraordinary
dividend paid by us. An extraordinary dividend is,
generally, a dividend with respect to a common unit if the
amount of the dividend is equal to or in excess of 10.0% of a
unitholders adjusted basis (or fair market value in
certain circumstances) in such common unit. If we pay an
extraordinary dividend on our common units that is
treated as qualified dividend income, then any loss
derived by a U.S. Individual Holder from the sale or
exchange of such common units will be treated as long-term
capital loss to the extent of such dividend.
Consequences
of Possible PFIC Classification
A
non-U.S. entity
treated as a corporation for U.S. federal income tax
purposes will be a PFIC in any taxable year in which, after
taking into account the income and assets of the corporation and
certain subsidiaries pursuant to a look through
rule, either: (i) at least 75.0% of its gross income is
passive income; or (ii) at least 50.0% of the
average value of its assets is attributable to assets that
produce passive income or are held for the production of passive
income.
While there are legal uncertainties involved in this
determination, our counsel, Perkins Coie LLP, is of the opinion
that we should not be a PFIC based on certain representations
that we have made to them regarding the composition of our
assets, the source of our income, and the nature of our
chartering activities and other operations following this
offering, including:
|
|
|
|
|
the income derived from our time charters and contracts of
affreightment will be greater than 25.0% of our total gross
income at all relevant times; and
|
|
|
|
the gross value of our vessels servicing our contracts of
affreightment or operating under time charters will exceed the
gross value of all other assets we own at all relevant times.
|
In addition to these representations, the opinion of Perkins
Coie LLP that we should not be a PFIC is based principally on
the position that at least a majority, if not all, the gross
income we derive from our time charters and contracts of
affreightment should constitute services income, rather than
rental income. Correspondingly, such services income should not
constitute passive income, and the assets that we own and
32
operate in connection with the production of such income, in
particular the vessels operating under time charters or
servicing contracts of affreightment, should not constitute
passive assets for purposes of determining whether we are a
PFIC. Substantial legal authority supports this position,
including case law and IRS pronouncements concerning the
characterization of income derived from time charters, contracts
of affreightment and similar contracts for other tax purposes.
However, in the absence of any legal authority specifically
relating to the statutory provisions governing PFICs, the IRS or
a court could disagree with this position and the opinion we
have received from Perkins Coie LLP. Regarding this position,
the opinion of Perkins Coie LLP assumes that all future time
charters and contracts of affreightment that we will enter into
are substantially similar to those we provided to them for their
review. There is no assurance that the nature of our assets,
income and operations will remain the same in the future.
Moreover, the market value of our units may be treated as
reflecting the value of our assets at any given time. Therefore,
a decline in the market value of our units (which is not within
our control) may impact the determination of whether we are a
PFIC.
If we were classified as a PFIC, for any year during which a
U.S. Holder owns units, such U.S. Holder generally
will be subject to special rules (regardless of whether we
continue thereafter to be a PFIC) with respect to:
(i) any excess distribution (generally, any
distribution received by a unitholder in a taxable year that is
greater than 125.0% of the average annual distributions received
by the unitholder in the three preceding taxable years or, if
shorter, the unitholders holding period for the units),
and (ii) any gain realized upon the sale or other
disposition of units. Under these rules:
|
|
|
|
|
the excess distribution or gain will be allocated ratably over
the unitholders holding period;
|
|
|
|
the amount allocated to the current taxable year and any year
prior to the first year in which we were a PFIC will be taxed as
ordinary income in the current year;
|
|
|
|
the amount allocated to each of the other taxable years in the
unitholders holding period will be subject to
U.S. federal income tax at the highest rate in effect for
the applicable class of taxpayer for that year; and
|
|
|
|
an interest charge for the deemed deferral benefit will be
imposed with respect to the resulting tax attributable to each
such other taxable year.
|
Certain elections that would alter the tax consequences to a
U.S. Holder, such as a qualified electing fund election or
mark to market election, may be available to a U.S. Holder
if we were to be classified as a PFIC. If we determine that we
are or will be a PFIC, we will provide unitholders with
information concerning the potential availability of such
elections.
As described above, current law provides that dividends received
by an individual U.S. Holder from a qualified foreign
corporation are subject to U.S. federal income tax at
preferential rates through 2010. However, if we were to be
classified as a PFIC for a taxable year in which we pay a
dividend or the immediately preceding taxable year, we would not
be considered a qualified foreign corporation, and a
U.S. Individual Holder receiving such dividends would not
be eligible for the reduced rate of U.S. federal income tax.
Consequences
of Possible Controlled Foreign Corporation
Classification
If more than 50.0% of either the total combined voting power of
our outstanding units entitled to vote or the total value of all
of our outstanding units were owned, directly, indirectly or
constructively, by citizens or residents of the United States,
U.S. partnerships or corporations, or U.S. estates or
trusts (as defined for U.S. federal income tax purposes),
each of which owned, directly, indirectly or constructively,
10.0% or more of the total combined voting power of our
outstanding units entitled to vote (each, a United States
Shareholder), we generally would be treated as a controlled
foreign corporation (or CFC). United States Shareholders
of a CFC are treated as receiving current distributions of their
shares of certain income of the CFC (not including, under
current law, certain undistributed earnings attributable to
shipping income) without regard to any actual distributions and
are subject to other burdensome U.S. federal income tax and
33
administrative requirements but generally are not also subject
to the requirements generally applicable to owners of a PFIC.
Although we are not currently a CFC, U.S. persons owning a
substantial interest in us should consider the potential
implications of being treated as a United States Shareholder in
the event we were to become a CFC in the future.
Sale,
Exchange or Other Disposition of Common Units
Assuming we do not constitute a PFIC for any taxable year, a
U.S. Holder generally will recognize taxable gain or loss
upon a sale, exchange or other disposition of our common units
in an amount equal to the difference between the amount realized
by the U.S. Holder from such sale, exchange or other
disposition and the U.S. Holders tax basis in such
units. Subject to the discussion of extraordinary dividends
above, such gain or loss will be treated as long-term capital
gain or loss if the U.S. Holders holding period is
greater than one year at the time of the sale, exchange or other
disposition, and subject to preferential capital gain tax rates.
Such capital gain or loss generally will be treated as
U.S.-source
gain or loss, as applicable, for U.S. foreign tax credit
purposes. A U.S. Holders ability to deduct capital
losses is subject to certain limitations.
United
States Federal Income Taxation of
Non-U.S.
Holders
A beneficial owner of our common units (other than a
partnership, including any entity or arrangement treated as a
partnership for U.S. federal income tax purposes) that is
not a U.S. Holder is a
Non-U.S. Holder.
Distributions
Distributions we pay to a
Non-U.S. Holder
are not subject to U.S. federal income tax or withholding
tax if the
Non-U.S. Holder
is not engaged in a U.S. trade or business. If the
Non-U.S. Holder
is engaged in a U.S. trade or business, distributions we
pay will be subject to U.S. federal income tax to the
extent those distributions constitute income effectively
connected with that
Non-U.S. Holders
U.S. trade or business. However, distributions paid to a
Non-U.S. Holder
who is engaged in a trade or business may be exempt from
taxation under an income tax treaty if the income represented
thereby is not attributable to a U.S. permanent
establishment maintained by the
Non-U.S. Holder.
Disposition
of Units
The U.S. federal income taxation of
Non-U.S. Holders
on any gain resulting from the disposition of our common units
generally is the same as described above regarding
distributions. However, individual
Non-U.S. Holders
are subject to tax on gain resulting from the disposition of our
common units if they are present in the United States for
183 days or more during the taxable year in which those
shares are disposed and meet certain other requirements.
Backup
Withholding and Information Reporting
In general, payments of distributions or the proceeds of a
disposition of common units to a non-corporate U.S. Holder
will be subject to information reporting requirements. These
payments to a non-corporate U.S. Holder also may be subject
to backup withholding, if the non-corporate U.S. Holder:
|
|
|
|
|
fails to provide an accurate taxpayer identification number;
|
|
|
|
is notified by the IRS that he has failed to report all interest
or distributions required to be shown on his U.S. federal
income tax returns; or
|
|
|
|
in certain circumstances, fails to comply with applicable
certification requirements.
|
Non-U.S. Holders
may be required to establish their exemption from information
reporting and backup withholding on payments within the United
States by certifying their status on IRS
Form W-8BEN,
W-8ECI or
W-8IMY, as
applicable.
34
Backup withholding is not an additional tax. Rather, a
unitholder generally may obtain a credit for any amount withheld
against its liability for U.S. federal income tax (and a
refund of any amounts withheld in excess of such liability) by
filing a return with the IRS.
NON-UNITED
STATES TAX CONSIDERATIONS
Marshall
Islands Tax Considerations
The following discussion is based upon the opinion of Watson,
Farley & Williams (New York) LLP, our counsel as to
matters of the laws of the Republic of The Marshall Islands, and
the current laws of the Republic of The Marshall Islands and is
applicable only to persons who do not reside in, maintain
offices in or engage in business in the Republic of The Marshall
Islands.
Because we, OPCO and our respective subsidiaries do not, and we
do not expect that we, OPCO or our respective subsidiaries will,
conduct business or operations in the Republic of The Marshall
Islands, and because all documentation related to this offering
will be executed outside of the Republic of The Marshall
Islands, under current Marshall Islands law you will not be
subject to Marshall Islands taxation or withholding on
distributions, including upon a return of capital, we make to
you as a unitholder. In addition, you will not be subject to
Marshall Islands stamp, capital gains or other taxes on the
purchase, ownership or disposition of common units, and you will
not be required by the Republic of The Marshall Islands to file
a tax return relating to the common units.
It is the responsibility of each unitholder to investigate the
legal and tax consequences, under the laws of pertinent
jurisdictions, including the Marshall Islands, of its investment
in us. Accordingly, each unitholder is urged to consult its tax
counsel or other advisor with regard to those matters. Further,
it is the responsibility of each unitholder to file all state,
local and
non-U.S., as
well as U.S. federal, tax returns that may be required of
him.
Canadian
Federal Income Tax Considerations
The following discussion is a summary of the material Canadian
federal income tax considerations under the Income Tax Act
(Canada) (the Canada Tax Act ), as of the date of this
prospectus, that we believe are relevant to holders of common
units who are, at all relevant times, for the purposes of the
Canada Tax Act and the Canada-United States Tax Convention 1980
(the Canada-U.S. Treaty ) resident in the United
States and entitled to all of the benefits of the
Canada-U.S. Treaty and who deal at arms length with
us and Teekay Corporation ( U.S. Resident Holders ).
Under the Canada Tax Act, no taxes on income (including taxable
capital gains) are payable by U.S. Resident Holders in
respect of the acquisition, holding, disposition or redemption
of the common units, provided that we do not carry on business
in Canada and such U.S. Resident Holders do not, for the
purposes of the Canada-U.S. Treaty, otherwise have a
permanent establishment or fixed base in Canada to which such
common units pertain and, in addition, do not use or hold and
are not deemed or considered to use or hold such common units in
the course of carrying on a business in Canada and, in the case
of any U.S. Resident Holders that carry on an insurance
business in Canada and elsewhere, such U.S. Resident
Holders establish that the common units are not effectively
connected with their insurance business carried on in Canada.
In this connection, we believe that our activities and affairs
and the activities and affairs of OPCO, a Marshall Island
limited partnership in which we own a 26.0% limited partnership
interest, can be conducted in a manner that both we and OPCO
will not be carrying on business in Canada. As a result,
U.S. Resident Holders should not be considered to be
carrying on business in Canada for purposes of the Canada Tax
Act solely by reason of the acquisition, holding, disposition or
redemption of their common units. We intend that this is and
continues to be the case, notwithstanding that in providing
certain services to Teekay Offshore Partners L.P., OPCO and its
operating subsidiaries, Teekay Shipping Limited (a subsidiary of
Teekay Corporation that is resident and based in Bermuda) will
contract for assistance in the delivery of such services with
Canadian service providers, as discussed below.
35
Under the Canada Tax Act, our election to be treated as a
corporation for U.S. tax purposes has no effect. Therefore,
we will continue to be treated as a partnership for Canadian tax
purposes. Under the Canada Tax Act, a resident of Canada (which
may include a foreign corporation the central management and
control of which is in Canada) is subject to Canadian tax on its
world-wide income, subject to any relief that may be provided by
any relevant tax treaty. A non-resident corporation or
individual that carries on a business in Canada directly or
through a partnership, including through a partnership that owns
an interest in another partnership, is subject to tax in Canada
on income attributable to its business (or that of the
partnership or the partnerships interest in another
partnership, as the case may be) carried on in Canada. The
taxation under the Canada Tax Act is subject to the provisions
of any relevant tax treaty.
The Canada Tax Act contains special rules that provide assurance
to qualifying international shipping corporations that they will
not be considered resident in Canada even if they are, in whole
or in part, managed from Canada. Further, the Canada Tax Act and
many of the tax treaties to which Canada is a party also contain
special exemptions for profits derived from international
shipping operations.
We and OPCO have entered and may in the future enter into
agreements with Teekay Shipping Limited for the provision of
administrative services. Certain of OPCOs operating
subsidiaries have entered and may in the future enter into
agreements with:
|
|
|
|
|
Teekay Shipping Limited for the provision of advisory,
technical, ship management and administrative services; and
|
|
|
|
Teekay Shipping Canada Ltd., a Canadian subsidiary of Teekay
Corporation, for the provision of strategic advisory and
consulting services.
|
Certain of the services that Teekay Shipping Limited provides to
us, to OPCO and to OPCOs operating subsidiaries under the
services agreements are and may in the future be obtained by
Teekay Shipping Limited through subcontracts with a Canadian
subsidiary of Teekay Corporation. The special rules in the
Canada Tax Act and various relevant tax treaties relating to
qualifying international shipping corporations and income from
international shipping operations may provide relief to
OPCOs operating subsidiaries to the extent that the
services provided to them by Canadian entities would otherwise
result in such operating subsidiaries being considered to be
resident in Canada or to be taxable in Canada on certain income
from such operations by virtue of carrying on business in
Canada. However, such rules would not apply to us or OPCO, as
holding limited partnerships, or to our general partner or
unitholders. While we do not believe it to be the case, if the
arrangements described herein result in our being considered to
carry on business in Canada for purposes of the Canada Tax Act,
our unitholders would be considered to be carrying on business
in Canada and may be required to file Canadian tax returns and,
subject to any relief provided in any relevant treaty
(including, in the case of U.S. Resident Holders, the
Canada-U.S. Treaty), would be subject to taxation in Canada
on any income that is considered to be attributable to the
business carried on by us in Canada.
On September 21, 2007, Canada and the United States signed
the fifth protocol (or the Fifth Protocol) to the
Canada-U.S. Treaty. The Fifth Protocol has been ratified in
Canada, but must still be ratified in the United States prior to
entering into force. The Fifth Protocol contains new
Article IV(7)(a), a treaty benefit denial rule, which may
have the effect of denying relief from Canadian taxation to
U.S. Resident Holders under the Canada-U.S. Treaty in
respect of any income attributable to a business carried on by
us in Canada and any other Canadian source income earned by us.
Article IV(7)(a) will not come into force until the first
day of the third calendar year that ends after the Fifth
Protocol enters into force.
We believe that we and OPCO can each conduct our respective
activities and affairs in a manner so that our unitholders
should not be considered to be carrying on business in Canada
solely as a consequence of the acquisition, holding, disposition
or redemption of our common units. Consequently, we believe our
unitholders should not be subject to tax filing or other tax
obligations in Canada under the Canada Tax Act. However,
although we do not intend to do so, there can be no assurance
that the manner in which we and OPCO carry on our respective
activities will not change from time to time as circumstances
dictate or warrant in a manner that may cause our unitholders to
be carrying on business in Canada for purposes of the Canada Tax
Act.
36
Further, the relevant Canadian federal income tax law may change
by legislation or judicial interpretation and the Canadian
taxing authorities may take a different view than we have of the
current law.
It is the responsibility of each unitholder to investigate the
legal and tax consequences, under the laws of pertinent
jurisdictions, including Canada, of its investment in us.
Accordingly, each prospective unitholder is urged to consult,
and depend upon, its tax counsel or other advisor with regard to
those matters. Further, it is the responsibility of each
unitholder to file all state, local and
non-U.S., as
well as U.S. federal, tax returns that may be required of
him.
37
PLAN OF
DISTRIBUTION
We may sell the securities offered by this prospectus and
applicable prospectus supplements:
|
|
|
|
|
through underwriters or dealers;
|
|
|
|
through agents;
|
|
|
|
directly to purchasers; or
|
|
|
|
through a combination of any such methods of sale.
|
If underwriters are used to sell securities, we will enter into
an underwriting agreement or similar agreement with them at the
time of the sale to them. In that connection, underwriters may
receive compensation from us in the form of underwriting
discounts or commissions and may also receive commissions from
purchasers of the securities for whom they may act as agent. Any
such underwriter, dealer or agent may be deemed to be an
underwriter within the meaning of the U.S. Securities Act
of 1933.
The applicable prospectus supplement relating to the securities
will set forth, among other things:
|
|
|
|
|
the offering terms, including the name or names of any
underwriters, dealers or agents;
|
|
|
|
the purchase price of the securities and the proceeds to us from
such sale;
|
|
|
|
any underwriting discounts, concessions, commissions and other
items constituting compensation to underwriters, dealers or
agents;
|
|
|
|
any initial public offering price;
|
|
|
|
any discounts or concessions allowed or reallowed or paid by
underwriters or dealers to other dealers; and
|
|
|
|
any securities exchanges on which the securities may be listed.
|
If underwriters or dealers are used in the sale, the securities
will be acquired by the underwriters or dealers for their own
account and may be resold from time to time in one or more
transactions in accordance with the rules of the New York Stock
Exchange:
|
|
|
|
|
at a fixed price or prices that may be changed;
|
|
|
|
at market prices prevailing at the time of sale;
|
|
|
|
at prices related to such prevailing market prices; or
|
|
|
|
at negotiated prices.
|
The securities may be offered to the public either through
underwriting syndicates represented by one or more managing
underwriters or directly by one or more of such firms. Unless
otherwise set forth in an applicable prospectus supplement, the
obligations of underwriters or dealers to purchase the
securities will be subject to certain conditions precedent and
the underwriters or dealers will be obligated to purchase all
the securities if any are purchased. Any public offering price
and any discounts or concessions allowed or reallowed or paid by
underwriters or dealers to other dealers may be changed from
time to time.
Securities may be sold directly by us or through agents
designated by us from time to time. Any agent involved in the
offer or sale of the securities in respect of which this
prospectus and a prospectus supplement is delivered will be
named, and any commissions payable by us to such agent will be
set forth, in the prospectus supplement. Unless otherwise
indicated in the prospectus supplement, any such agent will be
acting on a best efforts basis for the period of its appointment.
If so indicated in the prospectus supplement, we will authorize
underwriters, dealers or agents to solicit offers from certain
specified institutions to purchase securities from us at the
public offering price set forth in the prospectus supplement
pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will
be subject to any conditions set forth in the prospectus
38
supplement and the prospectus supplement will set forth the
commissions payable for solicitation of such contracts. The
underwriters and other persons soliciting such contracts will
have no responsibility for the validity or performance of any
such contracts.
Underwriters, dealers and agents may be entitled under
agreements entered into with us to be indemnified by us against
certain civil liabilities, including liabilities under the
U.S. Securities Act of 1933, or to contribution by us to
payments which they may be required to make. The terms and
conditions of such indemnification will be described in an
applicable prospectus supplement.
Underwriters, dealers and agents may be customers of, engage in
transactions with, or perform services for us in the ordinary
course of business.
Any underwriters to whom securities are sold by us for public
offering and sale may make a market in such securities, but such
underwriters will not be obligated to do so and may discontinue
any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for any
securities.
Certain persons participating in any offering of securities may
engage in transactions that stabilize, maintain or otherwise
affect the price of the securities offered. In connection with
any such offering, the underwriters or agents, as the case may
be, may purchase and sell securities in the open market. These
transactions may include over-allotment and stabilizing
transactions and purchases to cover syndicate short positions
created in connection with the offering. Stabilizing
transactions consist of certain bids or purchases for the
purpose of preventing or retarding a decline in the market price
of the securities and syndicate short positions involve the sale
by the underwriters or agents, as the case may be, of a greater
number of securities than they are required to purchase from us
in the offering. The underwriters may also impose a penalty bid,
whereby selling concessions allowed to syndicate members or
other broker-dealers for the securities sold for their account
may be reclaimed by the syndicate if such securities are
repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or
otherwise affect the market price of the securities, which may
be higher than the price that might otherwise prevail in the
open market, and if commenced, may be discontinued at any time.
These transactions may be effected on the New York Stock
Exchange, in the
over-the-counter
market or otherwise. These activities will be described in more
detail in the applicable prospectus supplement.
Pursuant to a requirement by the Financial Industry Regulatory
Authority (or FINRA), the maximum commission or discount
to be received by any NASD member or independent broker/dealer
may not be greater than 8% of the gross proceeds received by us
for the sale of any securities being registered pursuant to SEC
Rule 415 under the Securities Act.
In the event that more than 10% of the net proceeds of any
offering of securities made under this prospectus will be
received by NASD members participating in the offering or
affiliates or associated persons of such NASD members, the
offering will be conducted in accordance with FINRA
Rule 2710(h).
39
SERVICE
OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES
Teekay Offshore Partners L.P. is organized under the laws of the
Republic of The Marshall Islands as a limited partnership. Our
general partner is organized under the laws of the Republic of
The Marshall Islands as a limited liability company. The
Republic of The Marshall Islands has a less developed body of
securities laws as compared to the United States and provides
protections for investors to a significantly lesser extent.
Most of the directors and officers of our general partner and
those of our controlled affiliates are residents of countries
other than the United States. Substantially all of our and our
controlled affiliates assets and a substantial portion of
the assets of the directors and officers of our general partner
are located outside the United States. As a result, it may be
difficult or impossible for United States investors to effect
service of process within the United States upon us, our general
partner, our controlled affiliates or the directors and officers
of our general partner or to realize against us or them
judgments obtained in United States courts, including judgments
predicated upon the civil liability provisions of the securities
laws of the United States or any state in the United States.
However, we have expressly submitted to the jurisdiction of the
U.S. federal and New York state courts sitting in the City
of New York for the purpose of any suit, action or proceeding
arising under the securities laws of the United States or any
state in the United States, and we have appointed Watson,
Farley & Williams (New York) LLP to accept service of
process on our behalf in any such action.
Watson, Farley & Williams (New York) LLP, our counsel
as to Marshall Islands law, has advised us that there is
uncertainty as to whether the courts of the Republic of The
Marshall Islands would (1) recognize or enforce against us,
our general partner or our general partners directors or
officers judgments of courts of the United States based on civil
liability provisions of applicable U.S. federal and state
securities laws or (2) impose liabilities against us, our
general partner or our general partners directors and
officers in original actions brought in the Republic of The
Marshall Islands, based on these laws.
LEGAL
MATTERS
Unless otherwise stated in the applicable prospectus supplement,
the validity of the securities and certain other legal matters
with respect to the laws of the Republic of The Marshall Islands
will be passed upon for us by our counsel as to Marshall Islands
law, Watson, Farley & Williams (New York) LLP. Certain
other legal matters may be passed upon for us by Perkins Coie
LLP, Portland, Oregon, who may rely upon the opinion of Watson,
Farley & Williams (New York) LLP, for all matters of
Marshall Islands law. Any underwriter will be advised about
other issues relating to any offering by its own legal counsel.
EXPERTS
The consolidated financial statements of Teekay Offshore
Partners L.P. included in its Annual Report on
Form 20-F
for the year ended December 31, 2007, and the effectiveness
of Teekay Offshore Partners L.P.s internal control over
financial reporting as of December 31, 2007, and the
consolidated balance sheet of Teekay Offshore GP L.L.C. as at
December 31, 2007, filed as Exhibit 15.2 to Teekay
Offshore Partners L.P.s Annual Report on
Form 20-F
for the year ended December 31, 2007, have been audited by
Ernst & Young LLP, an independent registered public
accounting firm, as set forth in their reports thereon included
therein, and incorporated herein by reference. Such financial
statements are, and audited financial statements to be included
in subsequently filed documents will be, incorporated herein in
reliance upon the reports of Ernst & Young LLP
pertaining to such financial statements (to the extent covered
by consents filed with the U.S. Securities and Exchange
Commission) given on the authority of such firm as experts in
accounting and auditing.
40
EXPENSES
The following table sets forth costs and expenses, other than
any underwriting discounts and commissions, we expect to incur
in connection with the issuance and distribution of the common
units covered by this prospectus. All amounts are estimated
except the SEC registration and FINRA fees.
|
|
|
|
|
U.S. Securities and Exchange Commission registration fee
|
|
$
|
29,475
|
|
FINRA filing fee
|
|
$
|
75,500
|
|
Legal fees and expenses
|
|
|
*
|
|
Accounting fees and expenses
|
|
|
*
|
|
Printing costs
|
|
|
*
|
|
Transfer agent fees
|
|
|
*
|
|
Miscellaneous
|
|
|
*
|
|
|
|
|
|
|
Total
|
|
$
|
*
|
|
|
|
|
|
|
|
|
* |
To be provided in a prospectus supplement or in a Report on
Form 6-K
subsequently incorporated by reference into this prospectus.
|
41
PART II
INFORMATION
NOT REQUIRED IN PROSPECTUS
|
|
ITEM 8.
|
Indemnification
of Directors and Officers
|
Under its partnership agreement, in most circumstances, Teekay
Offshore Partners L.P. will indemnify the following persons, to
the fullest extent permitted by law, from and against all
losses, claims, damages or similar events:
(1) its general partner;
(2) any departing general partner;
(3) any person who is or was an affiliate of the general
partner or any departing general partner;
(4) any person who is or was an officer, director, member
or partner of any entity described in (1), (2) or
(3) above;
(5) any person who is or was serving as a director,
officer, member, partner, fiduciary or trustee of another person
at the request of the general partner or any departing general
partner; or
(6) any person designated by the general partner.
Any indemnification under these provisions will only be out of
the assets of Teekay Offshore Partners L.P. Unless it otherwise
agrees, Teekay Offshore Partners L.P.s general partner
will not be personally liable for, or have any obligation to
contribute or lend funds or assets to Teekay Offshore Partners
L.P. to enable it to effectuate, indemnification. Teekay
Offshore Partners L.P. may purchase insurance against
liabilities asserted against and expenses incurred by persons
for its activities, regardless of whether Teekay Offshore
Partners L.P. would have the power to indemnify the person
against liabilities under the partnership agreement.
Teekay Offshore Partners L.P. is authorized to purchase (or to
reimburse its general partners for the costs of) insurance
against liabilities asserted against and expenses incurred by
its general partner, its affiliates and such other persons as
the general partner may determine and described in the paragraph
above, whether or not it would have the power to indemnify such
person against such liabilities under the provisions described
in the paragraphs above. The general partner has purchased
insurance covering its officers and directors against
liabilities asserted and expenses incurred in connection with
their activities as officers and directors of the general
partner or any of its direct or indirect subsidiaries.
|
|
ITEM 9.
|
Exhibits
and Financial Statement Schedules
|
|
|
|
|
|
Exhibit
|
|
|
Number
|
|
Description
|
|
|
1
|
.1
|
|
Form of Underwriting Agreement*
|
|
4
|
.1
|
|
First Amended and Restated Agreement of Limited Partnership of
Teekay Offshore Partners L.P. (incorporated by reference to
Appendix A to the Prospectus contained within the
Registrants Registration Statement on
Form F-1,
declared effective by the Securities and Exchange Commission on
December 13, 2006, File
No. 333-139116)
|
|
5
|
.1
|
|
Opinion of Watson, Farley & Williams (New York) LLP,
relating to the legality of the securities being registered**
|
|
8
|
.1
|
|
Opinion of Perkins Coie LLP, relating to tax matters**
|
|
8
|
.2
|
|
Opinion of Watson, Farley & Williams (New York) LLP,
relating to tax matters**
|
|
23
|
.1
|
|
Consent of Ernst & Young LLP**
|
|
23
|
.2
|
|
Consent of Watson, Farley & Williams (New York) LLP
(contained in Exhibit 5.1)
|
|
23
|
.3
|
|
Consent of Perkins Coie LLP (contained in Exhibit 8.1)
|
|
24
|
.1
|
|
Powers of Attorney**
|
|
|
*
|
To be filed by amendment or as an exhibit to a Report on
Form 6-K
of the Registrant that is subsequently incorporated by reference
into this registration statement.
|
|
**
|
Previously filed.
|
II-1
|
|
(b)
|
Financial
Statement Schedules.
|
All supplemental schedules are omitted because of the absence of
conditions under which they are required or because the
information is shown in the financial statements or notes
thereto.
|
|
(c)
|
Reports,
Opinions, and Appraisals
|
The following reports, opinions, and appraisals are included
herein: None.
The Registrant hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
a. To include any prospectus required by
section 10(a)(3) of the Securities Act;
b. To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum
aggregate offering price set forth in the Calculation of
Registration Fee table in the effective registration
statement;
c. To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs 1(a), 1(b) and
1(c) of this section do not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in reports filed with or furnished to the Commission
by the Registrant pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement, or is contained in a
form of prospectus filed pursuant to Rule 424(b) that is
part of the registration statement.
2. That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
4. To file a post-effective amendment to the registration
statement to include any financial statements required by
Item 8.A. of
Form 20-F
at the start of any delayed offering or throughout a continuous
offering. Financial statements and information otherwise
required by section 10(a)(3) of the Securities Act need not
be furnished, provided that the registrant includes in
the prospectus, by means of a post-effective amendment,
financial statements required pursuant to this paragraph 4
and other information necessary to ensure that all other
information in the prospectus is at least as current as the date
of those financial statements. Notwithstanding the foregoing,
with respect to registration statements on
Form F-3,
a post-effective amendment need not be filed to include
financial statements and information required by
section 10(a)(3) of the Securities Act or
§ 210.3-19 of this chapter if such financial
statements and information are contained in periodic reports
filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the
Form F-3.
II-2
5. That, for the purpose of determining liability under the
Securities Act of 1933 to any purchaser:
a. Each prospectus filed by the registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of the
registration statement as of the date the filed prospectus was
deemed part of and included in the registration
statement; and
b. Each prospectus required to be filed pursuant to
Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration
statement in reliance on Rule 430B relating to an offering
made pursuant to Rule 415(a)(1)(i), (vii), or (x) for
the purpose of providing the information required by
Section 10(a) of the Securities Act shall be deemed to be
part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As
provided in Rule 430B, for liability purposes of the issuer
and any person that is at that date an underwriter, such date
shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof. Provided, however, that no
statement made in a registration statement or prospectus that is
part of the registration statement or made in a document
incorporated or deemed incorporated by reference into the
registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or
made in any such document immediately prior to such effective
date.
6. That, for the purpose of determining liability of the
registrant under the Securities Act to any purchaser in the
initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities
of the undersigned registrant pursuant to this registration
statement, regardless of the underwriting method used to sell
the securities to the purchaser, if the securities are offered
or sold to such purchaser by means of any of the following
communications, the undersigned registrant will be a seller to
the purchaser and will be considered to offer or sell such
securities to such purchaser:
a. Any preliminary prospectus or prospectus of the
Registrant relating to the offering required to be filed
pursuant to Rule 424;
b. Any free writing prospectus relating to the offering
prepared by or on behalf of the Registrant or used or referred
to by the Registrant;
c. The portion of any other free writing prospectus
relating to the offering containing material information about
the Registrant or its securities provided by or on behalf of the
Registrant; and
d. Any other communication that is an offer in the offering
made by the Registrant to the purchaser.
The Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing
of the Registrants annual report pursuant to
section 13(a) or section 15(d) of the Securities
Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that
in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on
Form F-3
and has duly caused this Amendment No. 1 to the
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of
Southport, State of Connecticut, United States of America, on
May 16, 2008.
TEEKAY OFFSHORE PARTNERS L.P.
By: Teekay Offshore GP LLC, its General Partner
Name: Peter Evensen
|
|
|
|
Title:
|
Chief Executive Officer and
Chief Financial Officer
|
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment No. 1 to the Registration Statement has
been signed on May 16, 2008 by or on behalf of the
following persons in the following capacities.
|
|
|
|
|
Signature
|
|
Title
|
|
|
|
|
/s/ Peter
Evensen
Peter
Evensen
|
|
Chief Executive Officer and Chief Financial Officer (Principal
Executive, Financial and Accounting Officer) and Director of
Teekay Offshore GP L.L.C. and Authorized Representative in the
United States
|
|
|
|
*
C.
Sean Day
|
|
Chairman of Teekay Offshore GP L.L.C.
|
|
|
|
*
Bjorn
Moller
|
|
Vice Chairman of Teekay Offshore GP L.L.C.
|
|
|
|
*
David
L. Lemmon
|
|
Director of Teekay Offshore GP L.L.C.
|
|
|
|
*
Carl
Mikael L.L. von Mentzer
|
|
Director of Teekay Offshore GP L.L.C.
|
|
|
|
*
John
J. Peacock
|
|
Director of Teekay Offshore GP L.L.C.
|
|
|
|
|
|
*By:
|
|
/s/ Peter
Evensen
Peter
Evensen, Attorney-in-Fact
|
|
|
II-4
INDEX TO
EXHIBITS
|
|
|
|
|
|
|
Exhibit
|
|
|
|
|
Number
|
|
Description
|
|
|
|
|
1
|
.1
|
|
Form of Underwriting Agreement*
|
|
|
|
4
|
.1
|
|
First Amended and Restated Agreement of Limited Partnership of
Teekay Offshore Partners L.P. (incorporated by reference to
Appendix A to the Prospectus contained within the
Registrants
Form F-1,
declared effective by the Securities and Exchange Commission on
December 13, 2006, File
No. 333-139116)
|
|
|
|
5
|
.1
|
|
Opinion of Watson, Farley & Williams (New York) LLP,
relating to the legality of the securities being registered**
|
|
|
|
8
|
.1
|
|
Opinion of Perkins Coie LLP, relating to tax matters**
|
|
|
|
8
|
.2
|
|
Opinion of Watson, Farley & Williams (New York) LLP,
relating to tax matters**
|
|
|
|
23
|
.1
|
|
Consent of Ernst & Young LLP**
|
|
|
|
23
|
.2
|
|
Consent of Watson, Farley & Williams (New York) LLP
(contained in Exhibit 5.1)
|
|
|
|
23
|
.3
|
|
Consent of Perkins Coie LLP (contained in Exhibit 8.1)
|
|
|
|
24
|
.1
|
|
Powers of Attorney**
|
|
|
|
|
*
|
To be filed by amendment or as an exhibit to a Report on
Form 6-K
of the Registrant that is subsequently incorporated by reference
into this registration statement.
|
|
**
|
Previously filed.
|
II-5