SHARE SALE AND PURCHASE AGREEMENT between Golden Ocean Group Limited as Seller and Knightsbridge Tankers Limited as Buyer
Exhibit 4.2
_______________________________________________________________________
_______________________________________________________________________
between
Golden Ocean Group Limited
and
as Buyer
regarding the shares in Golden Future Inc.
This share sale and purchase agreement (the "Agreement") is entered into on 14 June 2010 between:
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(1)
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Knightsbridge Tankers Limited, a company established in Bermuda with registration no. EC 22353 (the "Buyer"); and
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(2)
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Golden Ocean Group Limited, a company established in Bermuda with registration no. 36066 (the "Seller"); and
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1.
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BACKGROUND
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1.1
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The Seller owns 100 per cent of the issued share capital of Golden Future Inc. (the "Company"), consisting of 500 shares, without par value (the "Shares");
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1.2
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The Company is a corporation established in Liberia with registration number C-109757, its only business is to own and operate the vessel "Golden Future" (the "Vessel");
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1.3
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The Vessel's details are:
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Classification Society/Class
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ABS
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Flag: Hong Kong
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Place of Registration: Hong Kong
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Built in 2010 by Jinhaiwan
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IMO Number: 0000000
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Call sign: VRGC2
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Grt/Nrt: 91,971/59,546
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1.4
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The Buyer is listed on the NASDAQ Stock Exchange.
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1.5
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The Buyer wishes to purchase the Vessel and the Parties have agreed that the Buyer will acquire the Shares, thereby indirectly obtaining ownership of the Vessel.
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1.6
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The purpose of this Agreement is to set out the terms and conditions upon and subject to which the Buyer will acquire the Shares from the Seller.
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2.
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CONDITION
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The completion of the sale and purchase of the Shares and the Buyer's acquisition of the Company is conditional on the Buyer (i) refinancing its existing financing for its tanker vessels, and (ii) securing new financing for the purpose of purchasing the Shares and the payment of the cash consideration. If these conditions are not fulfilled by 31 December 2010 this Agreement shall cease to have effect, the sale of the Shares shall not proceed, and neither Party shall have any claim against the other.
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3.
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SALE AND PURCHASE
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3.1
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Sale and Purchase
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Upon the terms and subject to the conditions of this Agreement, the Seller hereby agrees to sell and transfer the Shares to the Buyer, and the Buyer will purchase and acquire all rights and title to the Shares from the Seller. The Shares will be delivered to the Buyer at the Closing (as defined below).
Through the sale and purchase of the Shares, the Buyer will indirectly acquire all of the Company's assets, rights and liabilities in the Vessel.
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3.2
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Purchase Price
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The consideration for the Shares shall be a combination of cash and shares in the Buyer.
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3.2.1
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Cash Consideration
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The cash element of the purchase price is USD 47,000,000 (the "Cash Consideration"), which shall be payable in full by the Buyer at the Closing.
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3.2.2
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Non cash Consideration
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The non cash consideration shall be the issue to the Seller of shares in the Buyer with a value as at the Closing Date of USD 25,000,000 (the "Consideration Shares"). The price per share allotted to the Seller shall be the average closing price paid for shares of the Buyer in the 10 trading days prior to 14 June 2010.
The Consideration Shares may not be traded by the Seller until the date which is 6 months from their issue, or such earlier date as they may be registered.
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3.3
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Closing
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Completion of the sale and purchase of the Shares (the "Closing") shall take place in Oslo at a venue of the Seller's choice on a date to be agreed (the "Closing Date").
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3.4
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The Buyer's Obligations at the Closing
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At the Closing, the Buyer shall:
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(i)
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deliver documentary evidence that the Cash Consideration has been irrevocably transferred to the Seller's nominated bank account;
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(ii)
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deliver all documents and take such actions as are required to be taken by a buyer of shares in a Liberian corporation;
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(iii)
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procure that the Consideration Shares are allotted to the Seller.
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3.5
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The Seller's Obligations at the Closing
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At the Closing, the Seller shall:
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(i)
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deliver all documents and take such actions as are required to be taken by a seller of shares in a Liberian corporation, and procure that the Company also take all required actions to approve the transfer, including but not limited to (i) approval of the transfer by the board of directors of the Company, and (ii) cancellation of Share Certificate No. 1 in the name of the Seller, and the issue of a new share certificate in the name of the Buyer.
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3.6
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Joint obligations at Closing
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At the Closing the Parties will each take such steps as are required of them to procure that the existing board of directors of the Company be replaced with a new board of directors comprising Xxxx Xxxxxxxxxxx, Xxx Xxxxxxxxx, and Xxxxxxxx X. Xxxxx. Xxx Xxxxxxxxx will be President, Xxxx Xxxxxxxxxxx will be Vice President, Xxxxxxxx X. Xxxxx will be Treasurer/Secretary, and an additional officer will be Xxxxxxx X. Xxxxxxx who will be Assistant Secretary.
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4.
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ACTIONS PENDING CLOSING
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4.1
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Conduct of Business of the Company Prior to the Closing Date
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Except as contemplated by this Agreement or with the prior written consent of the Buyer between the date hereof and the Closing Date, the Seller will procure that:
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(i)
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the Company will not amend its organisational documents, or effect any reclassification or other change relating to the Shares;
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(ii)
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the Company will not declare, set aside or pay any dividend or other distribution with respect to the Shares;
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(iii)
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the Company will conduct its business in the ordinary course and consistent with past practice;
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(iv)
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the Company will not change the arrangements with regard to management or operation of the Vessel, nor enter into any new agreements relating to the Vessel;
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(v)
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the Company will not enter into any employment or consultancy agreements; and
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(vi)
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the Company will maintain all current insurance policies in force for it or the Vessel.
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5.
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UNDERTAKING AND WARRANTY OF THE BUYER
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The Buyer undertakes and warrants to the Seller that it will not, prior to 1 August 2010, make a new issue of shares to the public at a price per share which is less than the price per share of the Consideration Shares, without the prior written consent of the Seller, such consent to be given or withheld entirely at the Seller's discretion.
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6.
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REPRESENTATIONS AND WARRANTIES OF THE SELLER
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The Seller represents and warrants to the Buyer as follows, as at the date hereof and repeated as at the Closing Date.
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6.1
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Organisation
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The Company is a corporation duly organised and validly existing under the laws of Liberia.
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6.2
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Authority; No Conflict
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Neither the execution nor delivery of this Agreement nor the consummation or performance of any of the transaction contemplated hereby will conflict with or violate (a) any provision of the organisational documents of the Seller, or (b) any resolution adopted by the board of directors or the shareholder of the Company.
No filing or registration with, no notice to and no permit, consent or approval from any governmental body is necessary for the execution and delivery by the Seller of this Agreement.
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6.3
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Share Capital; Title
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The share capital of the Company is 500 non-assessable shares of the capital stock, without par value. The Shares are owned by the Seller and at the Closing the Seller will transfer the Shares to the Buyer free from encumbrances.
No options, warrants or other rights giving access to the share capital of the Company have been issued or will be issued by the Company up to the Closing Date.
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6.4
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The Vessel
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The Company owns the Vessel, free from encumbrances. The information about the Vessel set out in Clause 1.3 is correct. The Vessel is hired to Cosco Bulk Carrier Co. Ltd. ("Cosco") under a time charter party agreement dated 1 February 2010, a copy of which has been provided to the Buyer.
On the Closing Date the Vessel shall be within IWL trading limits.
On the Closing Date the Vessel will be free from encumbrances, mortgages and maritime liens or any other debts whatsoever, other than the charter in respect of its hire to Cosco.
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6.5
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Accounts
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Since the Company was established on 22 March 2007 it has prepared its accounts accurately and correctly in all material respects, and in accordance with applicable accounting principles.
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6.6
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Taxes
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6.6.1
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The Company has filed all tax returns that are or were required to be filed, and the tax returns are true, correct and complete.
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6.6.2
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All taxes that have become due and payable by the Company have been paid.
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6.7
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Material Agreements
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6.7.1
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The Seller has disclosed to the Buyer all material agreements entered into by the Company. All of the material agreements are in full force and effect, and are listed in Schedule 1. To the extent that they were not originally entered into between the Company and relevant third party (or parties) all rights and obligations in the Material Contracts have been legally transferred to the Company (by novation or as otherwise required).
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6.8
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Subsidiaries and Minority Interest Companies
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6.9
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The company has no subsidiaries or interests in other companies or entities.
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6.10
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Employees
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The Company has no employees.
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6.11
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Litigation
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There is no claim, action, suit or proceeding pending against the Company before any court, arbitrator or any governmental body.
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6.12
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Compliance with Laws
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The Company is, and has at all times been, in all material respects, in compliance with all applicable laws and regulations.
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6.13
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Insurance
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The Company has in place all insurances required by law to be effected by it.
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6.14
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Assets
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Other than the Vessel the Company has no other assets.
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6.15
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Environmental Matters
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6.16
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The Company holds and fully complies with all requisite environmental permits for its business. The Vessel holds and has fully complied with all environmental permits for its operation. The Vessel has not disposed of, discharged, released, placed, dumped or emitted any hazardous substances. The Seller has not received any communication indicating it or the Vessel is or may be in violation of any environmental laws or environmental permits.
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7.
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COMPENSATION
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7.1
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Compensation by the Seller
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7.1.1
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Subject to the Buyer's duty to mitigate its loss the Seller agrees to compensate the Buyer:
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(i)
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for any direct loss which the Buyer suffers or incurs due to any breach by the Seller of any of the warranties set out in Clause 5 of this Agreement; and
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(ii)
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for any direct loss relating to the operation of the Vessel (including but not limited to oil spills) in the period up to the Closing Date.
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No claim shall be made by the Buyer against the Seller, and the Seller shall have no liability in respect of any loss which arises as a result of an act of or omission by the Buyer or the Company after the Closing Date.
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8.
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TERMINATION
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If the Closing has not taken place by 31 December 2010 either Party may terminate this Agreement by notice to the other, and neither Party shall have any claim against the other.
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9.
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NOTICES
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Any notice required to be given under this Agreement by either Party shall be in writing and shall be deemed to have been given if mailed by prepaid registered mail, sent by facsimile or e-mail or delivered to the address of the other Party as set out below:
If to the Seller to:
c/o Golden Ocean Management AS
X.X.Xxx 0000 Xxxx
0000 Xxxx
Xxxxxx
Phone: x00 00 00 00 00
Fax: x00 00 00 00 00
Email : xxxxxxxxxx@xxxxxxxxxxx.xx
Attention: Xxx Xxxxxxx
If to the Buyer, to:
c/o Frontline Management AS
Finance department
X.X.Xxx 0000 Xxxx
0000 Xxxx
Xxxxxx
Phone: x00 00 00 00 00
Fax: x00 00 00 00 00
Email : xxxx.xxxxxx@xxxxxxxx.xx
Attention: Xxxx Xxxxxx
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10.
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ASSIGNMENTS
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No Party may assign any of its rights under this Agreement without the prior written consent of the other Party.
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11.
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AMENDMENTS
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The Agreement constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the Seller and the Buyer with respect to the company and the Vessel.
This Agreement may only be amended by a written instrument signed by the duly authorised representative of each Party hereto.
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12.
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GOVERNING LAW
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This Agreement shall be governed by and construed in accordance with the laws of Norway.
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13.
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ARBITRATION
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The Parties shall seek to solve through negotiations any dispute arising out of or relating to this Agreement, or the breach, termination or invalidity hereof.
If the Parties fail to solve any such dispute by written agreement within 20 Business Days after the Sellers or the Buyer has requested such negotiations by notice to the other Party or Parties, such dispute shall be finally settled by arbitration in Oslo in accordance with the Norwegian Arbitration Act dated 14 May 2004, No. 25 as amended or replaced from time to time.
The arbitration shall be conducted in English unless the Parties agree otherwise.
The arbitration and the arbitration award shall be kept confidential.
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For and on behalf of the Seller
Signature:__________________________
Name in block letters:
Title:
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For and on behalf of the Buyer
Signature:__________________________
Name in block letters:
Title:
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SK 01655 0002 1177738
