Tanker Size Classes
Chart 7.1: Bahri Group Structure
14. LEGAL INFORMATION 1 Summary of Material Agreements
14. LEGAL INFORMATION
or derivative other than Crude Oil and the servicing of vessels. In addition, neither any Vela Group company nor any joint venture in which any Vela Group company has an interest, is precluded from undertaking a Competing Business which was undertaken by such Vela Group company or joint venture prior to the Execution Date. Further, no Vela Group company is precluded from (i) undertaking a Competing Business whose annual revenues comprise 15 per cent. or less of the total annual revenue of such Vela Group company (as appropriate) which is undertaking such business or (ii) the acquisition of a target where the Competing Business comprises 15 per cent.
or less of its annual revenues. However, if a Vela Group company undertook a Competing Business with associated annual revenues which are more than 15 per cent. of the total annual revenues of such Vela Group company, or if a Vela Group company proposed to acquire all of or a controlling interest in a Competing Business with associated annual revenues which are more than 15 per cent. of the total annual revenues of the business being acquired, the relevant Vela Group company shall notify the Company, and shall offer the Company a right of first refusal to acquire or participate in such Competing Business on terms to be agreed between the relevant Vela Group company and the Company.
Saudi Aramco has also given a similar undertaking not to compete with the Bahri Group, under the Relationship Agreement. For further details, see Section 14.1.1.2 "Summary of the principal terms of the Relationship Agreement".
Vela has also undertaken not to, and procured that any company over which Vela has board or voting control (or has equivalent rights in a contractual joint venture) will not, approach or solicit any employees transferred to the Bahri Group pursuant to the Services Agreement for a period of two years from the date of transfer of any such employee to the Bahri Group.
14.1.1.2 Summary of the principal terms of the Relationship Agreement
Saudi Aramco and the Company entered into the Relationship Agreement, dated 19/12/1433H (corresponding to 4/11/2012G), which governs the relationship and mutual rights and obligations between the Company and Saudi Aramco. The Relationship Agreement includes an undertaking by Saudi Aramco which provides the Company with exclusivity in relation to the carriage of VLCC-sized Crude Oil cargoes (as described further below).
In addition, the Relationship Agreement also imposes a non-compete obligation on members of the Saudi Aramco Group as further described below.
Exclusivity
The Relationship Agreement provides that the Company will, in accordance with the terms of the Contract of Affreightment, become the exclusive provider of VLCC shipping services to Saudi Aramco for all VLCC-sized Crude Oil cargoes that are sold by Saudi Aramco or its representatives that are to be shipped from terminals in the Kingdom, Sidi Kerir (an offshore location, off the coast of Egypt, that links to the Sumed oil pipeline) (in certain circumstances) and certain storage locations, provided that Saudi Aramco and/or its nominee are able to nominate the relevant vessel.
Non-Compete obligation of the Saudi Aramco Group
Under the Relationship Agreement, Saudi Aramco undertakes to the Company that, save in the case of national emergency, from First Completion until the termination of the Contract of Affreightment, Saudi Aramco and companies over which Saudi Aramco exercises voting or board control (including any contractual joint ventures over which it exercises such control) will not compete with the Bahri Group in the business of owning, operating and/or chartering VLCCs for the carriage of Crude Oil produced in the Kingdom.
However, there are certain limited circumstances (in addition to the occurrence of a national emergency), where a Saudi Aramco Group company may engage in a Competing Business, such as the entry into mergers, acquisitions and joint ventures subject to the satisfaction of certain procedures, the chartering of VLCCs for carrying fuel oil cargoes, the carriage of any hydrocarbon product or derivative other than Crude Oil and the servicing of vessels. In addition, neither any Saudi Aramco Group company, nor any joint venture in which any Saudi Aramco Group company has an interest, is precluded from undertaking a Competing Business which was undertaken by such Saudi Aramco Group company or joint venture prior to the Execution Date. Further, no Saudi Aramco Group company is precluded from (i) undertaking a Competing Business whose annual revenues comprise 15 per cent. or less of the total annual revenue of the relevant Saudi Aramco Group company or the joint venture which is controlled by the relevant Saudi Aramco Group company which is undertaking such business or (ii) the acquisition of a target where the Competing Business comprises 15 per cent. or less of the relevant Saudi Aramco Group company's annual revenues. However, if a Saudi Aramco Group company undertook a Competing Business with associated annual revenues which are more than 15 per cent. of the total annual revenues of such Saudi Aramco Group company, or if a Saudi Aramco Group company proposed to acquire all of or a controlling interest in a Competing Business with associated annual revenues which are more than 15 per cent. of the total annual revenues of the business being acquired, the relevant Saudi Aramco Group company shall notify the Company, and shall offer the Company a right of first refusal to acquire or participate in such Competing Business on terms to be agreed between the relevant Saudi Aramco Group company and the Company.
Supply of bunker fuels
From the First Completion Date and for so long as the Contract of Affreightment remains in force, Saudi Aramco undertakes to use commercially reasonable efforts to supply bunker fuels, to any vessel that is wholly owned by or bareboat-chartered by the Bahri Group at a port or terminal to be reasonably determined by Saudi Aramco, in priority over other commercial shipping vessel operators. However, no Saudi Aramco Group company shall be under any obligations to offer bunker fuels to a Bahri Group company if such action would result in such Saudi Aramco Group company not being able to satisfy its commitments to, and the needs of, any other Saudi Aramco Group company, or such action would result in Saudi Aramco or the relevant Saudi Aramco Group company being in breach of any pre-existing contractual arrangement with a third party, or any applicable law.
There is no obligation on Saudi Aramco to guarantee the availability of bunker fuels to any Bahri Group company, or bunker fuels at a specific price or of any specific quality.