VESSEL PURCHASE OPTION AGREEMENT
This agreement (the "Agreement") is made between Big Hook, L.L.C., a
Washington limited liability company (the "Seller") and Horizon Vessels,
Inc., a Delaware corporation and a wholly owned subsidiary of Horizon
Offshore, Inc. (the "Buyer"), with reference to the following facts:
Seller is the owner of the Xxxxxxx Barge VALHALLA, official number
652734. Said vessel, including its machinery, cranes, equipment, spare
parts, tools, gear, fuel and consumable stores and other inventory items,
apparel, appurtenances, and all other items belonging thereto as of the
date hereof, whether or not now on board, is collectively referred to
hereafter as the "Vessel."
The parties hereby desire to provide for the terms and conditions of
an agreement whereby the Seller sells the Vessel to the Buyer.
NOW THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS OF THE PARTIES
HEREIN, AND OTHER GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND
SUFFICIENCY ARE HEREBY ACKNOWLEDGED, IT IS AGREED AS FOLLOWS:
1. PURCHASE PRICE: TERMS OF PAYMENT.
1.1 PRICE. Subject to the terms and conditions hereof, at the
Closing, Seller agrees to sell, and Buyer agrees to purchase the Vessel,
for a total purchase price of US$13,240,000, free and clear of all liens
and encumbrances and exclusive of all charter hire payments.
1.2 TERMS OF PAYMENT. The purchase price shall be paid in cash at
the Closing.
1.3 PURCHASE OPTION SECURITY. Prior to May 29, 1998, Buyer shall
provide to Seller option security, which shall be returned to Buyer at the
time of payment in full of the purchase price at Closing unless earlier
returned to Buyer upon the termination of this Agreement as provided in
Section 6., below. The purchase option security shall be $5,000,000 in the
form of a bond or letter of credit in a form satisfactory to Seller. In
the event the conditions precedent to Closing are satisfied and Buyer fails
or refused to complete the sale on or before the Closing date, then the
option security shall be forfeited by Buyer and paid to Seller as
liquidated damages in lieu of all other damages, whether direct, indirect,
incidental, or consequential, to Seller caused by Buyer's failure or
refusal to complete the sale as aforesaid, neither party having any further
liability or obligation to the other party as regards the purchase of the
Vessel.
2. REPRESENTATIONS AND WARRANTIES.
2.1. BY SELLER. Seller represents and warrants as of the date hereof,
and at the Closing, as follows:
(a) Seller is the owner of the Vessel, and the Seller now has
and will have at Closing good and marketable title to the Vessel without
the consent or approval of any other person or entity, and no other person
or entity has any right, title or claim to the Vessel, or to lease or
otherwise use the Vessel, and there are no options outstanding to purchase,
lease, or otherwise use the Vessel.
(b) Except for that certain Preferred Ship Mortgage (the
"Mortgage") granted to Nationsbanc Leasing Corporation ("Mortgagee"), as
previously provided to Buyer, the Vessel is free and clear of all liens,
claims, debts, and encumbrances and all other claims for possession or
otherwise, including but not limited to all maritime liens and all security
interests whatsoever, (collectively "Liens") and is charter and contract
free, and no equipment of any kind on the Vessel is leased.
(c) There are no suits, actions, proceedings, arbitrations,
claims or investigations pending or threatened against, that would affect
the title of the Vessel or which could give rise to a Lien, attachment,
seizure, forfeiture or other claim against the Vessel, or which otherwise
materially affect the Vessel.
(d) There are no facts or circumstances, past or present, that
would prevent the Vessel from operating legally under applicable federal
law and regulations of the United States of America.
(e) The Vessel has not been involved, in any way, in the
violation of the laws of the United States of America or the laws of any
other country in a manner which could result in the penalty of forfeiture
being invoked against the Vessel, or otherwise hinder Buyer from operation
of the Vessel.
(f) In addition to the foregoing representations and warranties,
Seller represents and warrants as follows:
1) Seller is a limited liability company duly organized,
validly existing, and in good standing under the laws of Washington.
2)
(i) Seller has all company power and authority
necessary to sell the Vessel pursuant to this
Agreement and to otherwise consummate the
transactions contemplated herein;
(ii) The officer or attorney-in-fact executing this
Agreement on behalf of Seller has been duly
authorized by the Members and Managers of Seller
to execute and deliver this Agreement and the
other documents called for herein to be executed
and delivered at or prior to Closing and to
otherwise consummate the transactions contemplated
hereby;
(iii) All company action necessary for this Agreement
to constitute the valid, binding, and legal
obligation of Seller, enforceable in accordance
with its terms, has been taken.
2.2. SELLER'S DISCLAIMER. EXCEPT AS STATED ABOVE, THE VESSEL SHALL BE
CONVEYED "AS IS, WHERE IS." SELLER DISCLAIMS AND MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY,
SEAWORTHINESS, FITNESS, OR SUITABILITY OF THE VESSEL FOR ANY PURPOSE
INTENDED BY BUYER. The parties acknowledged that the foregoing disclaimer
has been the subject of negotiations between the parties and has been taken
into consideration in establishing the purchase price of the Vessel.
2.3. BY BUYER. Buyer represents and warrants that it is a citizen of
the United States, and as of the date of this Agreement and as of Closing,
that he and his assigns shall continue to be citizens of the United States
of America.
3. ADDITIONAL COVENANTS.
3.1. Seller unconditionally and without limitation agrees to
indemnify, defend and hold harmless the Buyer, and/or its successors and
assigns and each of them, from and against and in respect of any and all
claims, demands, losses, costs, expenses, obligations, liabilities,
damages, recoveries and deficiencies (including interest, penalties and
actual attorneys' fees incurred and the costs of litigation) that the Buyer
shall incur or suffer as a result of (i) any representation, beach of
warranty or nonfulfillment of any agreement, representation, warranty or
covenant on the part of the Seller hereunder, or (ii) any claim, demand,
Lien, judgment, fine, penalty or obligation which arise out of, result from
or relate to the Vessel. In the event that the Vessel is arrested, seized,
or attached, or any arrest, seizure, or attachment is threatened, as a
result of any claim of Lien or other adverse claim of any person or entity
to any right, title, or interest in the Vessel, Seller will promptly bond
the claim thereby securing its release or otherwise discharge the claim, or
if so bonded or discharged by Buyer or its successors or assigns then
Seller shall pay to same upon demand all costs, expenses, and attorneys
fees incurred thereby together with interest thereon at the rate of 12% per
annum from demand until paid. Buyer shall have the right to set off and
deduct from any amounts owing to Seller under this Agreement amounts due
Buyer from Seller under the terms of this Agreement including without
limitation this Section 3.1.
3.2. Seller covenants and agrees that it shall not at any time incur
Liens or additional mortgages on the Vessel or increase the amount of the
Mortgage to more than $13,000,000.00 or cross-collateralize or cross-
default the Vessel with any other indebtedness. Seller covenants and
agrees that it shall not sell or otherwise dispose of the Vessel or any
interest therein. Seller covenants and agrees that it shall not at any
time from the date hereof through the time of Closing disturb the quiet
enjoyment of Buyer to the Vessel.
3.3. Concurrently with the execution and delivery of this Agreement,
Seller shall deliver to Buyer a secretary certified copy of resolutions of
the Members and Managers of Seller authorizing this transaction and the
execution and delivery of this Agreement and all documents contemplated
herein which are to be executed by Seller, which resolutions shall be
specific as to the Managers of Seller who are authorized to execute and
deliver all such documents and this Agreement on behalf of Seller.
3.4. Concurrently with the execution and delivery of this Agreement,
Buyer shall deliver to Seller a secretary certified copy of resolutions of
the Board of Directors of Buyer authorizing this transaction and the
execution and delivery of this Agreement and all documents contemplated
herein which are to be executed by Buyer, which resolutions shall be
specific as to the Officer or Officers of Buyer who are authorized to
execute and deliver all such documents and this Agreement on behalf of
Buyer.
3.5 Seller shall execute and deliver to Buyer on the date
of execution of this Agreeement and again at Closing an officer's
certificate in the form attached hereto as Exhibit "A".
4. BUYER'S CONDITIONS PRECEDENT. The obligation of Buyer to
purchase the Vessel at Closing is subject to the following conditions
precedent, which must be satisfied and/or waived by the Buyer, on or before
the date of Closing:
4.1. All the representations and warranties of Seller are true and
correct on the date given and also as of the date of Closing, and Seller
has performed all covenants and obligations required hereunder.
4.2. Buyer had the opportunity to inspect the Vessel and the results
of said inspections are satisfactory to Buyer.
4.3. Buyer has received a certificate of ownership from the United
States Coast Guard, which verifies the warranties of Seller herein with
respect to the Vessel's ownership, and outstanding liens and encumbrances
pertaining thereto.
4.4. Seller has delivered into the closing escrow all documents
contemplated herein.
5. CLOSING AND DELIVERY.
5.1. TIME AND PLACE. The conveyance of the Vessel to the Buyer (the
"Closing") shall be no later than November 30, 1999, and shall take place
at the offices of Xxx Marine Documentation, Inc. in Seattle, Washington, or
as otherwise agreed between the parties. At the Closing, Seller shall
deliver or cause to be delivered (i) duplicate originals of a properly
notarized Xxxx of Sale in the usual United States Coast Guard form
conveying the Vessel to Buyer, (ii) the Certificate of Documentation for
the Vessel if in the possession of Seller, (iii) duplicate originals of a
properly notarized satisfaction of the Mortgage in a form recordable with
the United States Coast Guard, (iv) a Protocol of Acceptance and Delivery,
(v) the officer's certificate referred to in Section 3.5 above, and (vi)
such other documents of transfer, manufacturer warranties, vessel
documents, and other records as Buyer shall reasonably require. Should the
Closing not occur due to failure of Seller to close or comply with its
obligations hereunder, Buyer may elect to terminate this Agreement without
prejudice to any and rights and remedies against Seller at law, in equity
or in admiralty, including the right of specific performance, and the
option security referred to in Section 1.3 above shall be promptly returned
to Buyer.
5.2. SATISFACTION OF KNOWN LIENS. Any unsatisfied Liens and
encumbrances, including without limitation the Mortgage, known to the
parties at the time of Closing shall be satisfied from the proceeds of
sale, deposited in escrow with Xxx Marine Documentation, Inc.
5.3. COMMISSIONS AND BROKERAGE FEES. Buyer shall be obligated to pay
any and all commissions and brokerage fees due by reason of the sale of the
Vessel. No brokers have been engaged in connection with this Agreement,
except X.X. XxXxxxxx. Buyer agrees to pay X.X. XxXxxxxx or his designated
company such commission as shall be agreed between Buyer and X.X. XxXxxxxx,
which commission shall be in addition to the purchase price. Seller shall
have no responsibility to X.X. XxXxxxxx or to any other broker.
The parties shall each pay one-half of the fee charged by Xxx
Marine Documentation, Inc. not to exceed $2,000.00 each; provided, each of
the parties shall pay and be responsible for their own attorneys' and
accountant's fees incurred in connection with this transaction.
5.4. DELIVERY OF THE VESSEL. On the Closing date Buyer shall cause
the Vessel to be delivered in international waters outside of the
territorial limits of any state of the United States. Irrespective of the
actual date and time closing documents are signed or exchanged, delivery of
the Vessel shall be deemed to have occurred when Buyer notifies Seller that
the Vessel has reached the required location. All sales or other taxes
(other than income taxes) and fees, if any, due as a result of the sale
shall be paid by Buyer who shall indemnify and hold harmless Seller with
respect thereof.
6. LOSS OF VESSEL.
6.1 In the event of an actual, constructive, or
compromise total loss of the Vessel, then upon payment to Seller (or to
Mortgagee if the Mortgage is then not satisfied of record) of Seller's
insurable interest in the proceeds of the hull and machinery insurance on
the Vessel, this Agreement shall be automatically be deemed terminated with
no further liability of either party to the other and the option security
referred to in Section 1.3 above shall be promptly returned to Buyer.
7. MISCELLANEOUS.
7.1. The representations, warranties, agreements, covenants and
conditions set forth in this Agreement shall survive Closing and shall not
be merged upon delivery of the Xxxx of Sale from Seller to Buyer nor upon
payment of the purchase price to the Seller.
7.2. This Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, successors and assigns;
however, Buyer shall not have the right to assign its interest in this
Agreement without the prior written consent of Seller, which consent shall
not be unreasonably withheld.
7.3. This Agreement supersedes all prior agreements and undertakings,
oral and written with respect to the subject matter hereof. This Agreement
may only be amended in writing, signed by both parties.
7.4. In the event of a dispute between the parties regarding the terms
of this Agreement, or in the event either party commences suit for the
enforcement of the terms and conditions hereof, then the prevailing party
shall be entitled to a reasonable Attorney's fees and costs pertaining to
such proceedings, and the venue thereof may be laid in the federal courts
sitting in King County, Washington. The parties agree that in the event of
pending or threatened breach of the terms and conditions of this charter,
the other party will suffer irreparable injury for which an award of money
damages will not be adequate. Accordingly, notwithstanding any procedural
or substantive law or rule to the contrary, all of which are hereby waived,
both parties agree to the granting of injunctive relief, including
mandatory injunction.
7.5 All notices hereunder shall be in writing and delivered by
certified mail, return receipt requested, or by telefax confirmed by mail
to the addresses set forth below the signatures of the parties below.
Notices shall be effective on receipt.
7.6 Seller shall execute and deliver to Buyer such other and
further documents and instruments as Buyer may reasonably require to more
fully effectuate the terms and conditions of this Agreement and the sale
and purchase of the Vessel.
7.7 If any provision of this Agreement is held to be invalid or
unenforceable, such unenforceability shall not effect or impair the
validity or enforceability of the remaining provisions of this Agreement.
7.8 Headings used in this Agreement are for convenience of reference
only, and are not intended, to any extent or for any purpose, to limit or
define the text of any provision hereof. This Agreement may be executed in
several counterparts all of which shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement this 15th
day of May, 1998.
OWNER: CHARTERER:
BIG HOOK, L.L.C. HORIZON VESSELS, INC.
By: /s/Xxxx X. Xxxxxxx By: /s/ Xxxx Xxx
Its: MEMBER Its: PRESIDENT
Address: Address:
0000 Xxxx Xxxxxxxx Xxx S. 0000 Xxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000 Xxxxx 0000
X.X. Xxx 00000 Xxxxxxx, Xxxxx 77042
Xxxxxxx, Xxxxxxxxxx 00000-0000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
